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Google To Collect Even More User Information

by AP on January 24, 2012

Huffington Post…

LOS ANGELES — Google is overhauling the way it treats user data, linking information across its array of email, video and social-networking services so that information gathered in one place can be used in another. For example, if you spent the last hour logged into Google to search the Web for skateboards, the next time you log into YouTube, there’s a good chance you’ll get recommendations for videos featuring Tony Hawk. The changes take effect March 1 and remove some of the legal hurdles that Google faced by having more than 70 different privacy policies across various services. But the changes could irk privacy critics for the sheer volume of information collected. Google Inc. hopes to improve the user experience across its different services and give advertisers a better way to find customers.

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Google To Collect Even More User Information

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Alex Nowrasteh: Immigrants Help Fuel Tech Growth

by Alex Nowrasteh on January 19, 2012

Huffington Post…

People are the most valuable resource. We see this most clearly among entrepreneurs, scientists, engineers, and innovators. Creating wealth and new ways of doing things drive economic growth. This is especially true in the technology sector. Encouraged by free markets, individual liberty, and the right incentives, innovators can achieve technological wonders. But unfortunately, our immigration system limits their number. Nowhere is the positive impact of immigrants more noticeable than in high tech startups. According to a survey by the National Foundation for American Policy, immigrants have started nearly half of the top 50 venture-funded companies . Software, semiconductors, and biotechnology are the most common venture-backed startup firms started by immigrants. According to another report by Vivek Wadhwa, roughly 25 percent of all engineering firms founded between 1995 and 2005 were founded by immigrants. A report from the Kauffman Foundation shows that immigrants are more than twice as likely as native-born Americans to start firms. Thanks to America’s entrepreneurial culture, stories like those of the Hungarian-born Andy Grove , who founded Intel, and the Soviet-born Sergey Brin , who founded Google, are common. There are many thousands more who create successful but smaller companies. Entrepreneur Andres Ruzo , who describes himself as “Peruvian by birth, Texan by choice,” started the telecommunications firm Link America in 1994. He is also working on ITS Infocom, which manages communication networks for large companies. His firms also expanded into Latin America by trying to, in Ruzo’s own words, “Americanize South and Central America: to bring the culture of performance and results and speed and punctuality and quality and reliability to Latin America.” With rare exceptions, immigrant entrepreneurs face immigration problems. Employment-based green cards , capped at 140,000 a year, are issued to some kinds of skilled workers and investors, under strict country of origin quotas and burdensome requirements. The H-1B visa is capped at 85,000 per year for temporary workers employed by American firms. Many times H-1B workers are issued a green card after several years. All the while, the worker has to be an employee, not an entrepreneur. Roughly a quarter of master’s students and a third of Ph.D. students in science and engineering at U.S. universities are foreign-born. Yet the amount of paperwork, bureaucracy, and requirements they face to stay in the U.S. after graduation throw up serious roadblocks to innovation and entrepreneurship. Innovators and entrepreneurs should spend their time starting new businesses, not navigating a byzantine and outdated immigration system. America is uniquely meritocratic. We attract the best and the brightest from around the world, but our immigration system gets in the way. The government expects a potential entrepreneur to prove that he or she is an entrepreneur before he or she can start a business. There is no stamp or marking that shows who will be a successful entrepreneur ex ante. Only experience, not government fiat, can determine that. Our immigration rules need to allow for those experiences. Many immigrant workers innovate within American firms, filling niche specialty roles. Many are graduates of the best universities and technical schools in the world. Jim Clark , the American founder of Healtheon (now WebMD ), Netscape (now part of AOL), and Silicon Graphic affectionately calls his Indian engineers “the most talented engineers in the Valley… and they work their butts off.” American-educated Indian engineer Srikanth Nadhamuni and others produced some of the most innovative websites and medical cost saving tools yet developed. His story is multiplied thousands of times over, but for every success that is realized, our immigration laws impede another through arduous bureaucratic barriers. Chia-Pin Chang , a Taiwanese native and Ph.D. in computer engineering from George Washington University, co-founded the medical device firm OptoBioSense. In addition to the burdensome government regulations on medical devices, Chang faces yet another obstacle: He has to close his business in February and move back to Taiwan if he cannot secure an employer-sponsored green card. Iranian-born Esmaeil-Hooman Banaei created an electricity generating fabric while getting his Ph.D. from the University of Central Florida. Now he is waiting for a green card and a legal chance to pursue the American dream while developing new technology. His invention may flop or it may produce benefits, profits, revenues, and opportunities for Americans. But we’ll never know if he doesn’t get a green card. Immigration links together the world’s most valuable resources, allowing immigrant and Americans to work together. The immigrants then become Americans and the process continues, replenishing America’s talent pool. The government cannot choose who will become an innovator or entrepreneur before they get an opportunity to do so. Immigration regulatory limbo ties the hands of hundreds of thousands of potential entrepreneurs and innovators. Those knots should be undone. Immigrants and Americans working together have produced enormous wealth and opportunities for everybody in the United States. Governments just needs to let them.

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Alex Nowrasteh: Immigrants Help Fuel Tech Growth

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Could Your Next Lover Be Your Phone?

January 15, 2012

A friend’s father recently traded in his prehistoric Motorola flip phone for Apple’s iPhone 4S. In no time, his family was forced to open its arms to a new member of the family: Siri, the iPhone 4S’s voice-controlled personal assistant She was an active participant in conversations. She cracked jokes, offered suggestions for things to do, settled arguments, and entertained an eight-year-old during a quiet afternoon. The spouse of the proud new iPhone owner realized she now had to compete for her husband’s attentions. “He talks to Siri now more than to me,” she said wryly. Siri is merely a crude harbinger of what’s to come: the phone as friend. Gadget makers, from car manufacturers to smartphone sellers, are at the beginning of a race to develop devices that satisfy a desire even more primal than the need for convenience, communication and constant connectedness: the desire to feel loved. They are harnessing new technology, such as voice recognition, to create more personable gadgets that we can relate to and we feel relate to us. We are being asked, and shown how, to fall in love with these devices because they can talk to us, care for us, and anticipate our needs — even more effectively, in some cases, than a close friend. Siri can already be sarcastic, unpredictable and even flirtatious, giving the impression that our phone is not merely a phone, but a companion. As specs, those unwieldy, acronym-laden descriptors of a device’s speed and storage capabilities hold less sway over our choice of phone or PC, and companies are seeking out new ways to distinguish their products from the competition. In recent years, hardware-peddlers such as Apple and Amazon have succeeded by marketing devices that tap into an ecosystem of apps, music, movies and other content, understanding that much of the appeal of the device resides in what you can do on it. The products on display at this year’s Consumer Electronics Show, the world’s largest consumer tech expo , suggest that the next competitive advantage lies in developing the gadget that doubles as a companion. The device with impressive specs is being supplanted by the gadget that can sympathize. We’ll love our phone not because it has a great camera or terrific processing speeds, but because that Siri is just so darn fun to be around and boy, she really gets me. And it’s not just about the gadgets that fit in the palms of our hands. As I previously reported , Ford’s global manager of health and wellness research, Gary Strumolo, stated in explicit terms his hope that drivers will feel they have a relationship with a vehicle that looks after their well-being and takes care of them by tracking their health. “The more that you talk to a car that understands you, understands your needs, and maybe even anticipates your needs, the more you’ll have an emotional bond with the car,” Strumolo said during a keynote at the Consumer Electronics Show. “You’ll think, ‘This car is really concerned with my well-being. I feel it understands me, it’s helping me.’ It’s essentially a personal assistant.” Gadget-makers are exploring a litany of ways to seduce us into sensing an emotional relationship with our devices. For example, equipped with the right kind of software, our gadgetry could use our personal information, as well as data about our past behavior, to anticipate our needs and offer the kind of considerate suggestions we’d expect from a spouse. Our tablet would not only be the tool that helps us accomplish an activity, but also the playmate that suggests what to do in the first place. When I sit down in front of my TV, the set will recognize me and remember that I’ve watched three seasons of “Law and Order” and every hour of the “Sopranos,” but I couldn’t get past the first episode of “Community.” “Bianca,” the television might say, “maybe you’d be in the mood for ‘CSI’? I’m pretty sure I saw the first season on Netflix.” With information from Facebook, which is also being integrated into TV sets and smartphones, our devices could reference our network of family and friends, giving the impression that they’re just one of the gang. “Matt and Jesse have been raving about ‘Boardwalk Empire’ in their status updates,” the set top box would tell me. “And Mallory, Eric and Andrew all ‘liked’ it. That could be a good one for tonight.” Our homes are not so far away from this omniscient reality. Later this year, Samsung will release TVs outfitted with facial recognition systems that enable the set to scan the viewer’s face and display customized entertainment options depending on who sits down in front of the boob tube. Google executive chairman Eric Schmidt also envisioned a household of inter-connected gadgets , all powered by Google’s Android software, that would recognize and react when you entered the room, displaying, say, your text messages on a TV screen. Companies like Amazon and Foursquare already propose recommendations based on the books or venues we’ve enjoyed in the past. Given that computers can process more data and recognize patterns more efficiently than us mere mortals, our smartphones, tablets and TVs might even be able to predict a friend’s needs better than we can. I thought my cousin would go wild over the Don DeLillo book I gave him for his birthday. Amazon, on the other hand, knows he’s already bought it. What will make these personalized suggestions so powerful is the fact that they’re being coupled with new hardware that allows gadgets to respond in more human ways. Machines are making an effort to connect with us in the same way we connect with each other. We can now talk to our TVs or carry on conversations with our smartphones. Microsoft’s Kinect, coupled with its Xbox gaming system, can pick up on our body language and respond to our voice. You can flip through movies just as you’d brush aside the offer of tea from a host, or issue it commands as you might speak to a young child. Other companies like SoftKinetic and PrimeSense are also working on gesture recognition technology that requires waving at TV as you might an old friend and they aim to embed their sensors into everything from PCs to smartphones. I’m not predicting a world in which humans are made obsolete by more caring, altruistic cyborgs. But it does portend a changing relationship with our devices, one that stands to see us forge more intimate bonds with our electronics and rely on them even more than we do now. Gadgets have always been a means of connecting to someone personable. But what happens if the means become personable themselves? Siri?

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Spending At Mobile Companies Grinds Down

January 13, 2012

By Leila Abboud and Tarmo Virki PARIS/HELSINKI (Reuters) – Telecom operators globally are expected to cut spending on their networks this year, hitting equipment makers that were only just beginning to recover from intense price wars and the last economic downturn. European operators are likely to be more cautious as recession looms and consumers are less willing to splash out on high-end smartphones, while carriers in China and the United States slow their frenetic pace of mobile investments. The shift will pressure long-struggling mid-sized gear makers like Alcatel-Lucent SA and Nokia Siemens Networks, which are more vulnerable than market leader Ericsson or low-cost Chinese player Huawei. Some smaller equipment vendors such as Juniper Networks Inc and Acme Packet Inc have already issued profit warnings in recent weeks, blaming slower spending at big U.S. carriers like Verizon Communications Inc and AT&T. Alcatel-Lucent also had to scale back its margin and cash flow targets for 2011, and Nokia Siemens Networks announced mass layoffs and restructuring. Behind the warnings is a economic slowdown that began in the second half of last year and has already begun weighing on telecom gear makers’ shares. “While it won’t be as bad as 2009 when operators drastically cut their spending, we expect only very weak growth this year and continued pressure on prices,” said Cedric Pointier, a portfolio manager at Natixis Asset Management, which holds Alcatel-Lucent, Nokia and Ericsson shares in its funds. “In tough economic times, telecom operators choose between seeking growth and protecting cash flows, and they usually just adjust their capital expenditures to maintain cash flow.” Telecom network investments tend to follow economic cycles, as operators hold back spending when their customers become more price conscious. HEAVY INVESTMENT In recent years, however, underlying demand for new equipment has grown as networks strain under a rising data load brought on by Internet-connected smartphones and tablets. Operators especially in the United States have invested heavily in mobile networks to keep up, increasing spending BYaround 10 percent last year, but this year analysts expect many to be more prudent. Even optimistic observers see only slight growth of between 3 and 4 percent in the market for telecom network equipment overall, and most expect a steep fall in mobile investments. “Wireless is very weak and will be for the first half,” said Earl Lum, chief of research firm EJL Wireless. Investment bank Nomura predicts that operators’ capital expenditures on mobile networks will shrink 1 percent this year, while fixed drops 5 percent. This is a marked slowdown from last year when operators, led by the United States and Asia, upped their capex on mobile by 7 percent and on fixed by 4 percent, according to Nomura. Credit Suisse expects wireless network investments to grow only 1 percent in 2012, following 10 percent growth in 2011. “Although we retain our view that capacity utilization on mobile networks continues to remain high, which will drive long-term revenue growth, any potential recovery is unlikely before 2013,” wrote Credit Suisse analysts. PRICE BATTLE Some analysts say the slowdown, especially in China, could spark another price battle globally, hurting margins at Alcatel-Lucent, Nokia Siemens and Ericsson. “I expect to see aggressive pricing by the Chinese firms to make up the shortfall in their home market,” said EJL’s Lum. From 2007 to 2009, the industry was gripped by a price war as China’s Huawei and ZTE slashed prices to gain a foothold in overseas markets, just as Alcatel-Lucent and NSN were distracted by complicated mergers and rivals capitalized to take share. Analysts will be watching to see how the Chinese position themselves in bidding for modernization projects at European carriers. In such projects, operators rip out old wireless gear and replace it with new kit. Nokia Siemens could be particularly vulnerable to such projects since its large footprint in European 3G networks could be attacked by Chinese players or even Ericsson. Investors will get a sense of what’s ahead in late January, when major operators and gear makers give 2012 forecasts. Verizon and Ericsson report earnings on January 25, followed by AT&T and Nokia Siemens the next day. Ericsson is expected to report fourth-quarter sales up 7 percent to 67.2 billion crowns ($9.7 billion), while gross margin is seen slipping to 34.1 percent from 34.7 percent a year earlier, according to Thomson Reuters I/B/E/S. Ericsson benefits from its larger scale and geographical reach, strong balance sheet and leadership in the United States, where margins are fatter because of the absence of Chinese vendors. On February 10, Alcatel-Lucent, which is struggling to complete a painful turnaround, is expected to report fourth-quarter sales down 11 percent to 4.3 billion euros ($5.5 billion), the data showed. ($1 = 6.9311 Swedish crowns) ($1 = 0.7814 euros) (Additional reporting by Simon Johnson in Stockholm) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Where In The World Is It Easiest To Start A Business?

January 10, 2012

International entrepreneurs can quickly get discouraged once they encounter the mess of deregulation, red tape and lack of infrastructure that often comes with developing to middle-class world economies. Certainly, some countries are easier to do business in than others, though the World Bank’s Doing Business 2012 report shows a mounting number of encouraging changes to the business environment in over 170 global economies. Each year, the Doing Business report measures the regulation reforms of 173 global economies based on 10 factors: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. Between 2010 and 2011, 53 economies made it easier to start a business, 44 streamlined the process of getting credit, 29 made reforms to resolve insolvency, and 18 improved regulations for trading across borders. Notably, 78 percent of the economies in Sub-Saharan Africa made regulatory improvements that would make it easier for local entrepreneurs to start businesses. This year’s top 10 countries provided the greatest ease of doing business. Here’s why they made World Bank’s ranking:

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Will This Windows Phone Reclaim Mojo for Microsoft, Nokia?

January 10, 2012

LAS VEGAS — Apple has its iPhone, Android has its Galaxy Nexus, and now, Windows Phone has the Nokia Lumia 900. Nokia CEO Stephen Elop took the stage at the Consumer Electronics Show here Monday and unveiled the Lumia 900, the premier smartphone running Microsoft’s Windows Phone mobile operating system and perhaps the greatest hope of redemption for Microsoft’s struggling mobile software. Badly trailing Apple’s iOS, Google’s Android and BlackBerry in the U.S., Windows Phone 7 was released in 2010 and has not yet been a hit with American consumers, despite glowing reviews from critics . When handset giant Nokia announced that it would begin manufacturing phones running Microsoft’s mobile OS , it was widely viewed as an excellent chance for Windows Phone to become a meaningful player in the U.S. and for Nokia to reassert its former dominance of the mobile marketplace. And so here is the Nokia Lumia 900, the top-of-the-line Windows Phone from Nokia that arrives almost a year after Microsoft and Nokia first teamed up. The Lumia 900 will go on sale “in the coming months,” according to a press release, and will be available exclusively on AT&T to begin. Elop emphasized the Lumia 900′s 4.3-inch AMOLED display screen, an 8 megapixel rear-facing camera with Carl Zeiss optics and a front-facing 1MP camera with built-in video calling capability. The Lumia 900 will ship with ESPN, CNN and Nokia Drive apps and features a built-in GPS that can be used for navigation without a SIM card. Along with the announcement and a press release, Nokia made available a YouTube video showcasing the newest member of the Nokia Windows Phone family: The Lumia 900 is not the first Nokia device to run the Windows Phone OS. Previously, Nokia outed the Lumia 710, an entry-level, $50 device that will be available on T-Mobile and AT&T, and the Lumia 800, a premium device not yet available in America (It’s coming soon, according to Nokia representatives). The Lumia 900 is, however, the first Nokia Windows Phone with 4G LTE, the faster mobile network that American carriers are racing to build. “The introduction of the Nokia Lumia 900 with AT&T is another significant milestone in the ongoing rollout of Nokia’s global smartphone strategy,” said Chris Weber, president of Nokia Americas, in a statement. “The Nokia Lumia 900 is designed specifically with the U.S. in mind and the announcement of this collaboration with AT&T, in addition to other recent announcements, signifies a new dawn for Nokia in the U.S.” Neither a price nor a release date were announced. Though the Lumia 900 represents to AT&T a powerful bit of ammunition for its budding 4G LTE campaign, the stakes may be much higher for Microsoft and Nokia. Microsoft is pledging hundreds of millions of dollars in advertising for its flagging Windows Phone OS, which currently sits at under 5 percent adoption in the U.S., trailing Android devices, the iPhone and BlackBerry handsets by wide margins. Nokia, meanwhile, announced in February 2011 its intentions to drop the Symbian and Meego operating systems from its phones in favor of an exclusive multi-billion dollar partnership with Microsoft. The Lumia 900 is the first real jewel of that partnership, a blue-ribbon smartphone tasked with competing with the likes of the iPhone 4S and the Samsung Galaxy Nexus in a crowded, well-entrenched smartphone market. If Nokia is to regain the massive market share it enjoyed in America in the early-2000s, or if Microsoft is to grab the mobile market share it currently enjoys in the PC business, then Nokia’s newest batch of Windows Phones handsets will have to catch the attention (and wallets) of Americans in a way that previous attempts have not. The Nokia Lumia 900 is perhaps the most significant attempt yet at gaining (or regaining) those crowns. Though the Lumia 900 will not be the final shot at denting the market, it will certainly be one of the loudest. For full product specifications for the Nokia Lumia 900, see the official Nokia website .

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What Can You Learn From The Worst Product Launches Ever?

January 6, 2012

We all (hopefully) learn from our mistakes. Entrepreneurs, especially, are bound to make them — and it’s those early stumbles that can make (or break) them. Of course, it’s always better to learn from other people’s mistakes. The business world is full of blunders, and watching them can be great sport. As 2011 drew to a close, we saw obituaries for ill-conceived gadgets like the TouchPad , HP’s attempted iPad killer. And who can forget Qwikster, Netflix’s brief, doomed spinoff DVD service? Looking ahead to the coming year, here’s our prediction — products will flop, mergers will fail and ad campaigns will fizzle. We’ve seen it all before. With that in mind, we decided to take a look at some of the worst product launches ever — and pull out the lessons that entrepreneurs of all kinds can learn. 1) The Hula Burger The idea: Back in the 1960s, McDonald’s owner Ray Kroc recognized he wasn’t selling as many burgers on Fridays during Lent. It’s part of McDonald’s lore that the Filet-O-Fish was created as something Catholics could eat, but what’s often forgotten is Kroc’s other idea: the Hula Burger. It was a slice of pineapple between two slices of cheese on a bun. While the Filet-O-Fish is with us to this day, good luck trying to find a Hula Burger. The lesson: Don’t trick your customers. Until the end of his days, Kroc talked about the merits of the Hula Burger, and while it may have been delicious, even he admitted in his memoir that perhaps it should have been called something else — say, the Hula Sandwich? Customers, Kroc reported in his memoir, would say, “I love the hula, but where’s the burger?” 2) Celery Jell-O The idea: Back in the 1960s, someone decided the world was clamoring for celery-flavored Jell-O. Actually, it was part of a line of Jell-O flavors for salads. Apparently, you’d eat the Jell-O on your salad — not only could you get celery Jell-O, but also an Italian Salad flavor, Mixed Vegetable Jell-O and Seasoned Tomato . Yum. The lesson: Know your customers. There was no harm done in giving it a shot, but the misfire might have killed a smaller, less durable company. Jell-O may be universal, but it’s primarily beloved by children and families, and with other flavors available like cherry and grape, what kid in his right mind is going to clamor for flavors like Mixed Vegetable and Celery? 3) Windows Vista The idea: Vista was designed to replace Windows XP and, of course, make scads of money for Microsoft — and it did. But the operating system was clunky and full of bugs and was greeted almost immediately with negative buzz. Vista was released on January 30, 2007, but by April, Microsoft essentially waved the white flag, allowing Dell to keep offering XP on new computers. Meanwhile, not coincidentally, Microsoft sped up the development of its next, much more well-received, offering: Windows 7. The lesson: Customers will buy your product based on your reputation, but they won’t love it solely because of it. Quality counts. 4) Gerber Singles The idea: Gerber had conquered the baby market. Next, it wanted to go after the parents. So in 1974, it came out with these meals in a jar, aimed at college students and single adults living alone. But with the name Gerber attached to these jars, consumers felt they were being asked to essentially buy baby food packaged for grownups. The lesson: Sometimes your brand is so successful, you’re stereotyped and locked into a certain persona. Hey, there are worse fates. 5) Clairol’s “Touch of Yogurt” shampoo The idea: Yogurt has a lot of vitamins and minerals, and yogurt-based shampoos are now actually on the market. However, when this came out in 1979, it thrived in the test marketing phase , but actual consumers weren’t so interested in putting yogurt on their scalp. The lesson: If you’re going to challenge a conception that, say, yogurt is a food and not something you put in your hair, you need to invest a lot into educating the public first. 6) Pepsi A.M. The idea: In the fall of 1989, Pepsi evidently felt it could boost its sales if it served up a reason for drinking soda in the morning. At the time, it was estimated that sodas were only consumed at breakfast in 2 percent of the households across the United States . Pepsi A.M. would try to improve upon that. The breakfast soda would have 28 percent more caffeine per ounce than a regular Pepsi, but it would be 77 percent less per ounce than coffee or tea. In any case, by August 1990, Pepsi began quietly killing this beverage. The lesson: It’s awfully difficult to change a nation’s habits and lifestyle. 7) Spray-on condoms The idea: The reason for creating spray-on condoms is sound. They were invented by German entrepreneur Jan Vinzenz Krause of the Institute for Condom Consultancy. Typical condoms can be difficult to put on. In this case, the male consumer was expected to spray paint on a fast-drying latex liquid. But it took a few minutes for the latex to dry , dampening the moment, and it cost twice as much as a traditional condom. The product never quite made it out of the testing phase. The lesson: As with Pepsi A.M., it’s awfully difficult to change a nation’s habits and lifestyle, and if sex is involved, all bets are off.

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Verizon Scraps Fee After Customer Uproar

December 30, 2011

Well, isn’t that convenient! After public outcry, Verizon has decided that it will not instate a $2 “convenience fee” for customers paying monthly bills with a credit or debit card via the Internet or telephone. A press release on the Verizon website announced the carrier’s change of heart and credited “customer feedback about the plan” for its decision: Verizon Wireless has decided it will not institute the fee for online or telephone single payments that was announced earlier this week. The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions. The company continues to encourage customers to take advantage of the numerous simple and convenient payment methods it provides. It’s a quick turnaround for Verizon, which just announced the $2 “convenience fee” on its website on December 29; within 24 hours, online petitions had begun to circulate , commenters condemning Verizon’s corporate greed had made their voice heard on websites and message boards across the Internet, and even the FCC announced plans to investigate the charge. A day after introducing the so-called convenience fee, Verizon caved to public and governmental pressure and scrapped the charge. The $2 fee, which was scheduled to go into effect in the middle of January 2012, would have applied to all customers paying by credit or debit card on a per-statement basis, and would have helped to defray the cost that credit card companies charged Verizon to process its customers’ payments. Though the carrier offered seven payment alternatives to avoid the fee , including enrolling in an AutoPay program or paying via check or gift card or in person at Verizon stores, consumer outrage and mockery was so swift and vocal that Verizon appears to have been left no choice but to change its plans. “At Verizon,” said Verizon President and CEO Dan Mead as part of the press release announcing the fee cancellation, “we take great care to listen to our customers. Based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time.” Can’t get enough of these embarrassing tech fails? Check out our slideshow of the 13 biggest technology oopsies of the year.

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Phone Activations Were Up 350 Percent On Christmas

December 27, 2011

‪ ‬ By Tricia Duryee, A Gift to Developers: A Quarter of a Billion Apps Downloaded on Christmas via All Things D A record-number of new devices activated on Christmas morning is leading to a tidal wave of new mobile application downloads. Apple’s App Store is on pace to exceed 10 billion downloads this year alone, which is twice the number it recorded over the three previous years combined. The Android Market is also setting records. Over the past seven months, it has achieved more than 7 billion downloads, which more than triples its life-to-date downloads of 3 billion reached in May 2011. At those rates, both operating systems are generating roughly one billion downloads a month, or the equivalent of 33 million a day. The data was reported by Flurry Analytics, which creates tools that thousands of developers use to track usage of their mobile applications. Christmas Day was one of the big catalysts for achieving huge end-of-the-year records. Flurry found that application downloads more than doubled on Christmas compared to the average number of downloads occurring during the first 20 days of December. On Dec. 25, it registered 242 million app downloads, jumping more than 125 percent over an average day. In addition, because of its insight into application usage, Flurry is also able to see the number of new devices activated. Phones and tablets are always a hot Christmas item and this year was no exception. On the average day in December, 1.5 million phones were activated, but on Christmas, 6.8 million were activated, representing a 353 percent spike. Last year, Christmas held the previous single-day record with 2.8 million device activations. A Gift to Developers: A Quarter of a Billion Apps Downloaded on Christmas via All Things D Also on All Things D: EA Star Wars Game Off to Forceful Start in Quest to Catch World of Warcraft Supply Chain Chatter Has Two Apple TVs Targeted for Midyear Launch Jildy, Whose Patents Google Owns and Facebook Licenses, Launches Its First App

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U.S. Government Warns Conglomerate To Fix Security Flaws

December 22, 2011

* Researchers say flaws make systems vulnerable to attack by hackers * Siemens says first fixes will be released in January (Adds comments from Department of Homeland Security) By Jim Finkle BOSTON, Dec 22 (Reuters) – Siemens said it is working to fix security flaws in industrial controls products that the U.S. government warned could make public utilities, hospitals and other critical parts of the country’s infrastructure vulnerable to attack by hackers. The German conglomerate, whose industrial control systems are widely used around the world, said on Thursday in a posting on its website that it had learned of the vulnerabilities in May and December of this year from security researchers Terry McCorkle and Billy Rios. The U.S. Department of Homeland Security issued an advisory that warned of the vulnerability, urging Siemens customers to minimize exposure of industrial control systems to the Internet to make them less vulnerable to attack. “Successful exploitation of these vulnerabilities could allow a hacker to log into a vulnerable system as a user or administrator,” the agency’s Industrial Control Systems Cyber Emergency Response Team said in the advisory. Rios told Reuters that one of the most serious of the vulnerabilities, known as an “authentication bypass,” allows hackers to get around password protections on Web interfaces, which Siemens customers use to access industrial control systems. Siemens industrial controls systems are used to run an assortment of facilities from power generators, chemical plants and water systems to breweries, pharmaceutical factories and even uranium enrichment facilities. “People with low skills will be able to use this authentication bypass,” said Rios, who described the problems on his blog, www.xs-sniper.com. Siemens said it had addressed some of the security vulnerabilities and that it would release its first security update to fix them next month. The company does not know of any cases in which hackers had exploited the vulnerabilities to attack its customers, spokesman Alexander Machowetz said. Some Siemens software is designed to automatically install services that make control systems accessible via the Internet, Rios said. They are installed with a default password, “100,” which is published in user manuals that are available on the public Siemens website, he added. “People set up control systems, and they don’t realize that they are on the Internet, waiting for people to connect to them,” Rios said. Siemens industrial control systems have been scrutinized by security researchers over the past few years. The notorious Stuxnet virus, which crippled Iran’s nuclear program, was first identified by researchers in June 2010. It targeted Siemens software used to control gas centrifuges that enriched uranium at a facility in Natanz, Iran. Last May, the U.S. government warned U.S. water districts, power companies and other Siemens customers of another security flaw uncovered by researcher Dillon Beresford that made systems vulnerable to attack. In August, Beresford disclosed at the Black Hat hacking conference in Las Vegas that he had found further vulnerabilities in Siemens products, including a “back door that could allow hackers to wreak havoc on critical infrastructure.” (Reporting By Jim Finkle; Editing by Lisa Von Ahn)

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Xerox Lab Founder Dies At 90

December 22, 2011

Jacob E. Goldman, a physicist who as Xerox’s chief scientist founded the company’s vaunted Palo Alto Research Center, which invented the modern personal computer, died on Tuesday in Westport, Conn. He was 90.

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Apple Poised For Loss In Claim Against iPad Competitor

December 22, 2011

DUESSELDORF, Germany (Reuters) – A German court rejected Apple’s claims that Samsung Electronics’ reworked tablet PC still looks like a copycat version of the iPad, in a preliminary assessment. Apple is fighting several rival makers of smartphones and tablet PCs in courts worldwide over intellectual property. Its battle with Samsung, which is Apple’s supplier as well as a competitor, has been especially bitter, with some 30 legal cases in 10 countries. “According to the court’s assessment, the defendant has moved away sufficiently from the legally protected design,” Judge Johanna Brueckner-Hofmann said in court on Thursday. Brueckner-Hofmann added that a ruling was slated for February 9. In response to an earlier court ruling in Apple’s favour, Samsung had redesigned its Galaxy Tab 10.1 for the German market only and named it Galaxy Tab 10.1N. But Apple challenged the reworked version as well, seeking an injunction that would ban Samsung from marketing the product in Europe’s largest consumer market. Samsung, for its part, earlier this week filed new claims in a separate dispute related to telecommunications standard technology with Apple for alleged patent infringements in Germany. (Reporting by Matthias Inverardi; Writing by Ludwig Burger; Editing by Helen Massy-Beresford)

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Apple Wins Legal Battle Against iPhone Competitor

December 19, 2011

‪ ‬ By Ina Fried, Trade Body Says HTC Is Violating Apple Patent, Bans Some Imports via All Things D In a closely watched case, the U.S. International Trade Commission on Monday ruled that Taiwanese cell phone maker HTC is violating an Apple patent and ordered an import ban on some of the company products. The organization found that HTC devices infringed on two claims related to an Apple patent. However, the ban will not take effect until April, the ITC said in a ruling, giving time for carriers to make transition plans and for HTC to demonstrate ways it has avoided infringement (by working around the patent, dropping infringing features or other means). “Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in this investigation and has issued a limited exclusion order prohibiting importation of infringing personal data and mobile communications devices and related software,” the agency said. “The Commission has determined that exclusion of articles subject to this order shall commence on April 19, 2012.” HTC will be able to import some refurbished products to satisfy repair claims on already sold products, but will not be able to bring new products into the country after April 19, unless the ruling is reversed or it can show its products no longer infringe the patent in question. The ruling had been delayed several times. HTC said in a statement it was pleased the commission reversed a ruling that HTC infringed on another of Apple’s patents and that it narrowed the ruling on the patent in which it did find infringement. “While disappointed that a finding of violation was still found on two claims of the ’647 patent, we are well prepared for this decision, and our designers have created alternate solutions for the Œ647 patent,” HTC said in a statement. See the ruling here. Trade Body Says HTC Is Violating Apple Patent, Bans Some Imports via All Things D More From All Things D: AT&T Dropping Its T-Mobile Bid, Owes Billions to Deutsche Telekom Beyond Tablets: The Next Five Computing Form Factors IBM Predicts Home Electricity From Your Bike, Mind-Reading Computers Facebook’s Social Ad Strategy Suffers Legal Blow

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Man Who Hung Jury In $1 Billion Microsoft Case At Peace With Decision

December 19, 2011

SALT LAKE CITY — The lone holdout juror who prevented a Utah company from getting as much as $1.2 billion from one-time rival Microsoft Corp. for alleged antitrust violations says he’s at peace with his decision. Novell sued Microsoft in 2004, claiming the software giant duped it into developing the once-popular WordPerfect writing program for Windows 95 only to pull the plug so Microsoft could gain market share with its own product. Novell says it was later forced to sell WordPerfect for a $1.2 billion loss. “I walk away feeling honestly myself, and I can’t speak for the other jurors, that I made the right decision even if it resulted in a hung jury,” Alvey said Saturday. “There were so many inferences that needed to be drawn that I felt that it was unfair to Microsoft to go out on a limb and say, `yes.’” Alvey described the three days of jury deliberations as stressful. The 11 other jurors sided with Novell. “Obviously, I wanted to convince them to agree with me and they wanted to convince me to agree with them,” he told KSL. Bill Gates testified last month that he had no idea his decision to drop a tool for outside developers would sidetrack Novell. Gates said he was acting to protect Windows 95 and future versions from crashing. Novell argued that Gates ordered Microsoft engineers to reject WordPerfect as a Windows 95 word processing application because he feared it was too good. Alvey said the jury agreed on the technical aspects of the case but disagreed on what Novell could have accomplished “but for” Gates’ decision. “There was a lot of speculation in this `but for’ world,” he said. As for Gates’ testimony, Alvey said, “The man was a little sarcastic at times. If anything, it provided a little break from the monotonous questions and answers … I think from his testimony, what I heard, and what I saw in the emails, Bill Gates was a man who took every threat extremely seriously.” Jury foreman Carl Banks said he tried hard to get a verdict. “It was a tough case. It was long and it was hard and it was grueling,” he said. “We gave it our best shot.” Novell attorneys have said they would seek to retry the case with a new jury. Microsoft said it would file a motion asking the judge to dismiss Novell’s complaint for good and avoid a second trial. ___

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FBI Director Can’t Rule Out Data Obtained by Carrier IQ

December 14, 2011

FBI Director Robert Mueller on Wednesday denied the bureau had ever sought information from the mobile-software company Carrier IQ, but said he could not rule out the possibility it obtained data collected by the controversial software through requests from wireless carriers. At a hearing before the Senate Judiciary Committee, Mueller said the FBI had “neither sought nor obtained any information from Carrier IQ in any one of our investigations.” But when pressed by Sen. Al Franken (D-Minn.) about whether the FBI acquired information from wireless carriers that use Carrier IQ to collect customer data, Mueller said it was possible. “I do not know in the information we seek from wireless carriers or what have you – and I’m not talking about Carrier IQ, I’m talking about wireless carriers – we may obtain information that in some way Carrier IQ may have been involved with,” Mueller said. Last month, security researcher Trevor Eckhart sparked controversy over the potential privacy risks of Carrier IQ by posting a video claiming the software logs every text message, Google search and phone number typed on a wide variety of smartphones and reports them to the mobile phone carrier. Carrier IQ is installed on about 150 million smartphones. Mueller’s comments came two days after Michael Morisy, a blogger for MuckRock News, posted an FBI response to his Freedom of Information Act request for “manuals, documents or other written guidance used to access or analyze data gathered by programs developed or deployed by Carrier IQ.” The FBI’s response suggested it had documents on the software, but that they were exempt from disclosure. “What is still unclear is whether the FBI used Carrier IQ’s software in its own investigations, whether it is currently investigating Carrier IQ, or whether it is some combination of both – not unlikely given the recent uproar over the practice coupled with the U.S. intelligence communities reliance on third-party vendors,” Morisy wrote. “The response would seem to indicate at least the former, since the request was specifically for documents related directly to accessing and analyzing Carrier IQ data.” On Wednesday, Mueller told lawmakers there was “some confusion” over the meaning behind the FBI’s FOIA response. In a statement to reporters on Tuesday, Carrier IQ denied having given data to the FBI. “Carrier IQ has never provided any data to the FBI,” the statement said. “If approached by a law enforcement agency, we would refer them to the network operators because the diagnostic data collected belongs to them and not Carrier IQ.” Mueller told lawmakers Wednesday that the FBI seeks customer data from wireless carriers through Title III of the Foreign Intelligence Surveillance Act. This week, Carrier IQ CEO Larry Lenhart and VP of Marketing Andrew Coward met with members of Franken’s staff. Franken sent a letter to the company asking for an explanation of what the software records, whether it transmits data to a third party, and whether the data presents any security or privacy risks. Franken has said the software’s capabilities may violate federal laws. In a 19-page statement released Monday , Carrier IQ acknowledged its software contained “an unintended bug” that “unintentionally” captured and transmitted encoded SMS messages to its carrier customers, including wireless companies — Sprint, T-Mobile and AT&T. The company said the bug occurred only in “unique circumstances,” like when a user receives a text message during a call, though the messages are “not human readable.” The company denied that its software captures or forwards to wireless carriers the content of multi-media messages (MMS), emails, photos, web pages, audio or video.’ To see which mobile carriers and manufacturers have claimed or denied affiliation with Carrier IQ, take a look at our slideshow (below), which includes statements from Apple, Google, Microsoft, Verizon, AT&T, HTC, Nokia, RIM and others. UPDATE: 3:56pm –Carrier IQ officials met this week with federal regulators to discuss the company’s software, according to a company spokeswoman. CEO Larry Lenhart and VP of Marketing Andrew Coward met with members of the Federal Trade Commission and Federal Communications Commission. “We sought the meetings with FCC and FTC in the interest of transparency and full disclosure, and to answer their questions,” Carrier IQ spokeswoman Mira Woods said.

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Eli Pariser: Best of TEDTalks 2011, #9: Beware Online ‘Filter Bubbles’

December 14, 2011

There’s a shift in how information is flowing online — and it’s invisible. But if we don’t pay attention to it, it could become a real problem.

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Eli Pariser On ‘Filter Bubbles’

December 14, 2011

In this special year-end collaboration, TED and The Huffington Post are excited to count down 18 great ideas of 2011, featuring the full TEDTalk with original blog posts that we think will shape 2012. Watch, engage and share these groundbreaking ideas as they are unveiled one-by-one, including never-seen-before TEDTalk premieres. Standby, the countdown is underway! Watch author Eli Pariser discuss secret censorship on the Internet, and read is accompanying blog post below following up on his talk. People love sharing lists — the list is one of the formats that fare well in a Filter Bubble world. So here’s a list of five of the most interesting ideas I’ve come across since I gave my presentation at TED and published The Filter Bubble: What The Internet is Hiding from You . 1. Who owns the right to infer things about you? According to Marissa Meyer at Google, some credit card companies can now use your purchasing decisions to predict whether you’re going to get a divorce with 95% accuracy — two years out. This raises some interesting ethical questions: do companies have an obligation to reveal to us the inferences they make about us? Should you be able to gain access to the fact that your credit card company is betting against your relationship? What about in the health sphere — if Acxiom infers that you’re at high risk of suicide, based on your purchases, does it have an obligation to let you or someone else know? I haven’t found any satisfying answers to these questions — but we ought to start thinking about them more seriously. 2. Transparency’s moving in the wrong direction. Imagine a company where every communication is transparently available to every employee. While corruption at the top is harder, overall, the effect would be to empower the bigwigs — because the kind of private coordination that people use to organize and aggregate power would be impossible. Speak ill of the boss, and you get laid off — that’s how power works. In an ideal world, I’d argue, transparency would vary with power — the more powerful you are, the brighter the spotlight on your activities. But what we’re seeing now is the opposite: the details of most folks’ lives have never been more available to more corporate, governmental or even private citizens. But thanks to the Citizens United Supreme Court decision, the wealthy and powerful are able to cloak their political activities, and there are a variety of services available to scrub private information from the web for a price. We have transparency for the 99%, but not the 1%. 3. Robot journalism. Mostly, I’ve been focused on the impact of code-based editors on how we consume news. But it’s worth noting that drone-like mini-robots are beginning to do some real news gathering as well. Check out this footage from a tiny helicopter piloted by folks at The Daily , or this stunning video from a protest in Poland . It won’t be long before every news bureau — and more than a few amateurs — are using these things to push past military lines, look in celebrities’ windows and generally change all of our assumptions about how video news is gathered — for better or worse. 4. The difference between curiosity and value. Recently, The Huffington Post tweeted about an article with the headline to the effect of “Guess Which Celebrity Got Into a Horrible Accident Today?” I’ll cop to clicking — HuffPost did an excellent job piquing my interest. But I couldn’t tell you which celebrity it was, because I’ve forgotten — there was very little lasting value in that article. These kinds of curiosity-driven clicks are one of the primary signals that sites use to personalize content. But unless they’re paired with something that measures the amount of value we take away from a media experience, they’re only so useful. And they lead toward a world with curiosity-baiting headlines and no payoff. What if, in addition to click signals, personalizing websites also sent folks a list of the 50 articles they’d recently visited and asked them to mark the three that gave them some lasting value? A personalized feed that took into consideration not just what we click on but what we take away from it could help us build information diets that are both delicious and substantive. 5. Seven Things Algorithms Do That Humans Don’t. As we move toward an algorithmically-edited world, there are still a bunch of things that human editors do better. This Harvard Business Review piece has a bit more detail, but here’s the short list: Anticipating what people will be interested in, taking risks in recommendations, giving folks a sense of the whole picture, pairing stories together in a way that adds value, highlighting stories of social importance, valuing content that blows folks’ minds and building the kind of trust that leads audiences to topics beyond their core zone of interest. Oh, and one more thing: As I’ve been discussing The Filter Bubble , the aspect of the problem I’ve become most focused on is the Information Junk Food problem. In many ways, the important question isn’t just whether you see a diverse set of political viewpoints, but whether most people see anything from the political or civic realm at all. I’m working on a new media project aimed at getting ideas that matter in front of millions of people — if that sounds like fun to you, maybe you should come work with us.

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Hints Europe’s Crisis May Already Be Taking Toll On Corporate America

December 10, 2011

NEW YORK (Caroline Valetkevitch) – On top of euro zone debt troubles, Wall Street now has to worry about sagging sales from Europe as a recession in the region seems more likely. Warnings from companies such as chemical maker DuPont (DD.N) and chip maker Texas Instruments (TXN.N) suggest the crisis may already be taking its toll on corporate America. While holiday shopping has started on an upbeat note, the corporate warnings could sour the cheer for some investors. “We are now beginning to see the collateral damage of the events in Europe with the earnings guidance cuts,” wrote Peter Boockvar, equity strategist at Miller Tabak & Co. in New York. Fourth – and first-quarter earnings growth estimates for Standard & Poor’s 500 companies have come down sharply since July, underscoring worries about the outlook for companies. Earnings are now expected to increase 10.1 percent for the fourth quarter, down from a growth estimate of 15 percent at the start of October and from an estimate of 17.6 percent in July, according to Thomson Reuters data. The data also showed that negative preannouncements by companies are outpacing positive ones by the biggest ratio since the second quarter of 2001. Late Thursday, Texas Instruments cut its revenue outlook for the current quarter, citing lower demand, while DuPont on Friday lowered its full-year profit forecast. Overseas, German specialty chemicals group Wacker Chemie (WCHG.DE) also cut its outlook, with the industry worried about slower global growth. Among others in technology, Lattice Semiconductor Corp (LSCC.O) cut its fourth-quarter revenue outlook on Friday. Stocks mostly brushed off the bearish news on earnings, focusing instead on Europe after nearly all European Union leaders agreed to build a closer fiscal union to battle the sovereign debt crisis. But the market for months has struggled with the news from Europe, which featured the lack of resolution to the debt crisis, causing high uncertainty for investors. “Today was a positive move forward. Unfortunately European austerity will impact global corporate earnings going into the next year,” said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey. “European policymakers’ inability to placate investor fears has business decision-makers hesitant to give positive light to the coming months,” he said. Stocks ended with gains for a second straight week, and the profit warnings came on the heels of what has been considered a fairly robust third-quarter reporting period. For the week, the Dow rose 1.4 percent, the S&P gained 0.9 percent and the Nasdaq was up 0.8 percent. Earnings increased 17.9 percent for the third quarter, according to Thomson Reuters data, up from a forecast for 13.1 percent growth in early October. Prospects for profit and revenue growth have been among the chief reasons why a good number of analysts remain optimistic about stocks heading into 2012. Kenneth Fisher, a billionaire investor and author whose money management firm oversees $40 billion in assets, said 2012 “will be a very nice year” for the United States. “Revenue growth, as a function of the economy, is pretty damn gangbusters,” he said at the Reuters 2012 Investment Outlook Summit this week. FORECASTS HIT Still, the aggregate change in consensus earnings estimates has been coming down even over the past month, according to Thomson Reuters StarMine data. All but two S&P 500 sectors — healthcare and consumer staples — show negative earnings revisions to estimates over the past 30 days, the data showed. Materials and financials are among sectors showing the biggest drops in estimates. For the fourth quarter, earnings for the materials sector are now expected to have decreased 1.4 percent from a year ago, while in October earnings were expected to have risen 25.6 percent. Financials, seen as the sector most sensitive to euro zone problems, also have taken a hit. Sector earnings are expected to have increased 18.3 percent for the fourth quarter, down from an October 3 forecast for growth of 26.6 percent. S&P 500 revenue is expected to have increased 6.6 percent in the fourth quarter compared with revenue growth of 11.1 percent in the third quarter, Thomson Reuters data showed. “A lot of companies are talking about Europe,” and its effect going forward, said Greg Harrison, Thomson Reuters earnings research analyst. Also, lackluster trading volumes are going to affect financials here in the United States, he said. Companies seemed more optimistic heading into 2011. Consumer confidence was higher, and the crisis in Europe seemed more contained. Among companies with disappointing outlooks a year ago were Xilinx (XLNX.O) and Jo-Ann Stores, which forecast a weak 2011 profit on Dec 1, 2010 but was bought by a private equity firm in January. (Reporting by Caroline Valetkevitch; Additional reporting by Ernest Scheyder and Nicola Leske; Editing by Kenneth Barry) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Apple’s Deal With The Devil

December 10, 2011

Over the last two years, Apple has been engaged in vicious legal battles over smartphone patents, many of which are aimed at squelching (or squeezing money out of) manufacturers of devices running Android. And now, for some reason, it has given valuable patents to a patent troll — which is using them to sue many of the top technology companies in the world.

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U.S. Trade Gap Narrowest In Months, As Imports From China Hit Record High

December 9, 2011

The U.S. trade deficit narrowed in October to its lowest in 10 months, but imports from China hit a record high, a government report showed on Friday. The trade gap totaled $43.5 billion, in line with a consensus estimate from analysts before the report. However, the Commerce Department revised its estimate of the September trade deficit to $44.2 billion from $43.1 billion. As a result, the October trade gap narrowed 1.6 percent from September, instead of widening, as most analysts expected. Both U.S. imports and exports declined in October, in a possible sign of weakening demand in the United States and abroad. However, a smaller trade deficit is positive for fourth-quarter economic growth, since it suggests more domestic demand is being met by U.S. production. Also, both imports and exports of capital goods set records in October, suggesting businesses are gearing up operations. U.S. stock index futures rose on Friday after European Union leaders agreed on measures that partially addresses the region’s crippling sovereign debt crisis. The euro rose against the dollar, while U.S. government debt yields rose. U.S. exports to the 27-nation EU rose 1.0 percent in October to $23.4 billion, while imports from the community increased 6.3 percent to $31.4 billion. “Exports to Europe are bound to weaken substantially, while imports will pick up steam as U.S. companies rebuild inventory after the unexpected decline in the third quarter,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics, Valhalla, New York. Overall U.S. imports fell 1.0 percent to $222.6 billion, led by a $3.6 billion drop in industrial supplies and materials. The average price for imported oil fell for a fifth consecutive month to $98.84 per barrel, from its May peak of $108.70. The drop in the overall trade deficit “will prove temporary, because oil prices have risen significantly since October,” Shepherdson said. Despite the overall import decline, imports of capital goods and food, feeds and beverages increased to records in October. Imports from China rose to a record $37.8 billion and imports from Japan increased to $12.3 billion, the highest since April 2008. U.S. exports fell 0.8 percent to $179.2 billion, led by a $1.3 billion drop in industrial supplies and materials. The biggest monthly decline in that category was for non-monetary gold, which tumbled 25 percent to $3.5 billion. However, for the first 10 months of 2011, non-monetary gold exports totaled $27.8 billion, compared to $14.8 billion in the same period last year. U.S. exports to China increased to $9.7 billion, the highest since December. The U.S. trade gap with China was unchanged in October at $28.1 billion, but remained on track to surpass the annual record of about $272 billion set in 2010. (Editing by Neil Stempleman) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Online Shopping Sales Continue To Surge

December 5, 2011

NEW YORK — U.S. shoppers are still spending heavily online after a record-busting “Cyber Monday,” research firm comScore Inc. said Sunday. The firm, which tracks Web use, found shoppers spent nearly $6 billion online on Monday through Friday last week, a record. On Cyber Monday itself, sales reached $1.25 billion, the biggest online shopping day in history. Online sales on Tuesday and Wednesday also broke $1 billion. Cyber Monday sales topped $1 billion for the first time last year. ComScore says online sales are up 15 percent to $18.7 billion in November and the first two days of December, compared with the same period last year. The holiday shopping season can make up to 40 percent of retailers’ annual revenue. This year’s holiday shopping has risen with help from discounting and promotions. Free shipping also appears to be a big draw, applying to 63 percent of sales, up from 52 percent a year ago. “Consumers have come to expect free shipping during the holiday promotion periods, and retailers, in turn, have realized that they must offer this incentive,” said comScore chairman Gian Fulgoni in a statement. Online shopping accounts for between 8 and 10 percent of overall holiday spending, by various estimates. ComScore’s spending figures exclude travel, auctions and large corporate purchases. Spending on items including clothing, general merchandise, toys and electronics and in department stores, rose 4.7 percent to $125 billion in the Oct. 30 to Nov. 26 period, according to MasterCard Advisor’s SpendingPulse. That includes online buying and spending in physical stores.

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SAP To Make $3.4 Billion Buy

December 4, 2011

SAN FRANCISCO — SAP said Saturday it is paying $3.4 billion to acquire SuccessFactors, a software company specializing in human resources tasks. It is the latest move in the escalating rivalry between SAP and Oracle Corp., and underscores the increased interest in technology companies that deliver software over the Internet, or in the so-called “cloud.” The deal calls for subsidiary SAP America Inc. to pay $40 per share in cash for SuccessFactors. That is a 52 percent premium over SuccessFactors’ closing stock price of $26.25 on Friday. The deal is expected to close in the first quarter of 2012. SAP AG is one of the world’s biggest business software makers. The German company’s specialty is business applications, such as those used for payroll and managing relationships with customers and suppliers. SuccessFactors, based in San Mateo, Calif., is a big maker of cloud-based human resources applications. The company focuses on applications for managing relationships with employees, such as organizing and developing performance reviews and bonuses. The company says it has more than 3,500 customers. It lost $12.5 million on $205.9 million in revenue last year. “The cloud is a core of SAP’s future growth, and the combination of SuccessFactors’ leadership team and technology with SAP will create a cloud powerhouse,” Bill McDermott, an SAP co-CEO, said in a statement. The deal is part of the growing rivalry between SAP and Oracle. Oracle’s push into SAP’s turf of business applications has been a multibillion-dollar affair. Oracle’s boisterous CEO Larry Ellison has pursued big-ticket acquisitions that have made his database software company a major player, behind SAP, in many different realms of the business software world. SAP is the dominant maker of business applications. The feud has gotten personal. Oracle won a $1.3 billion jury verdict against SAP last year over the widespread theft by a now-shuttered SAP subsidiary of documents from password-protected Oracle customer websites. Oracle alleged the information was used to steal business. A judge threw out the award, calling it “grossly excessive” and setting the stage for a retrial. Oracle landed a publicity jackpot from the trial. Ellison used it to repeatedly shame SAP publicly. SAP admitted the theft and agreed to pay $20 million to settle criminal charges filed by the Department of Justice over the former subsidiary’s practices.

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Leo W. Gerard: The 1 Percent Indifferent to Their Indebtedness

November 28, 2011

Most Americans, the 99 percent, feel the pressure of indebtedness. When they owe a friend a buck, their conscience bothers them until they’re square. They pay their bills, working second jobs if necessary. They meet mortgage obligations even when underwater. That’s why there was a deficit Super Committee. Americans don’t like debt, including bills owed by their government. It weighs on them, even when it’s borrowing by Washington to create jobs and speed recovery. But for the majority of millionaires — the 1 percent — incurring debt does not evoke anxiety. They’re numb to the feeling of responsibility that indebtedness induces in the 99 percent. They believe they owe nothing to their country or society despite all they’ve gained. They feel no duty to repay America for creating the environment that enabled them to amass all that wealth. Thus the Super Committee failed. The committee was searching for $1.2 trillion over 10 years. The Bush tax cuts, which disproportionately benefitted the rich, cost $2.8 trillion over the past decade. But the 1 percent obstructed a return to the pre-Bush-balanced-budget-era tax rates and would sneer at the mere suggestion that they pay the much higher marginal rates the wealthy accepted after World War II to settle those government debts. In fact, Republicans on the Super Committee actually proposed additional tax cuts for the rich. More breaks for the wealthy would require slashing social safety net programs for the 99 percent — Social Security, Medicare, Medicaid, Head Start, child nutrition. It would mean no funds to create jobs and boost the economy. The result would be less money to build highways, refurbish bridges and renovate schools. That’s okay with the 1 percent because they feel no obligation for those social responsibilities. Elizabeth Warren, the former Harvard Law Professor and Special Advisor for the U. S Consumer Financial Protection Bureau, tried to explain debt to the super-rich: “There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea — God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.” In addition to paying forward, the 1 percent also is obliged to pay back. That’s because the tax break Bush handed them contributed significantly to the national debt that the Super Committee failed to resolve. The rich didn’t create the entire federal deficit. And the 99 percent are ready to pay their part, just like they feel compelled to meet their personal debts. The behavior of the 99 percent during the mortgage crisis best illustrates their morality on the issue of repayment generally. In the midst of the recession near the end of 2009, as home values relentlessly declined, more than third of all mortgage holders found themselves underwater — meaning that they owed more on their houses than they were worth. Although financial advisors told mortgage holders who were underwater by hundreds of thousands of dollars that they should walk away from their houses in their own economic self-interest, only a tiny number, estimated at less than 5 percent , chose to deliberately default and dump the loss on the bank. University of Arizona law professor Brent T. White, writing about this phenomena, said the high moral standard of the average American mortgage holder is key to this. In a law review article, he cited a study that found more than 80 percent of homeowners regard the act of strategically walking away from a mortgage contract as unprincipled. White contrasted the values of individual homeowners with those of the big banks: “Unlike lenders who seek to maximize profits irrespective of concerns about morality or social responsibility, individual homeowners are encouraged to behave in accordance with social and moral norms that require individuals keep promises and honor financial obligations.” Political, social, media and financial institutions all convey a clear message to home owners, White said, that it is a borrower’s moral responsibility to pay his debts. That message is not, however, as clearly directed to the 1 percent. Some of them have gotten it. The 200 who signed on as Patriotic Millionaires for Fiscal Strength and who asked Congress and the Super Committee to increase their taxes understand they have a debt to America and seek to honor it. The debt-shirking remainder, though, and the purchased politicians who support them, are as unseemly, unethical and dishonorable as deadbeat parents. Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama appointed him to the President’s Advisory Committee on Trade Policy and Negotiations. He serves as co-chairman of the BlueGreen Alliance and on the boards of Campaign for America’s Future and the Economic Policy Institute. He is a member of the IMF and ICEM global labor federations and was instrumental in creating Workers Uniting, the first global union. Follow @USWBlogger

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Black Friday Online Sales Make Big Jump

November 27, 2011

By Alistair Barr (Reuters) – Online retail sales in the United States on the post-Thanksgiving shopping day known as “Black Friday” jumped 26 percent this year, led by Amazon.com Inc , ComScore said on Sunday. Black Friday online sales reached $816 million, making it the heaviest spending day on the Internet so far in 2011, according to ComScore, a closely watched tracker of Internet activity. Year-over-year growth on Black Friday in 2010 was 9 percent, so this year’s 26 percent sales increase online was much stronger, the firm also noted. Bricks-and-mortar retailers offered big Black Friday discounts much earlier this year and some companies opened stores late on Thanksgiving for the first time, hoping to grab more of the action on what is a crucial shopping day for the industry. That sparked some speculation that online retailers may lose some sales, but ComScore said that did not happen. “With brick-and-mortar retail also reporting strong gains on Black Friday, it’s clear that the heavy promotional activity had a positive impact on both channels,” ComScore Chairman Gian Fulgoni said. Fifty million Americans visited online retail sites on Black Friday, representing an increase of 35 percent versus a year ago, ComScore data showed. Each of the top five retail websites saw double-digit gains in visitors versus last year, led by Amazon.com. Wal-Mart ranked second, followed by Best Buy , Target and Apple , ComScore said. “Amazon.com once again led the pack, with 50 percent more visitors than any other retailer, while also showing the highest growth rate versus last year,” Fulgoni said. Fulgoni forecast another record for online sales on Cyber Monday, which is traditionally the first day after Thanksgiving when employees return to offices and purchase items with their work computers. Last year, Cyber Monday sales topped $1 billion, making it the heaviest day of online spending ever, according to ComScore. (Reporting by Alistair Barr; Editing by Dale Hudson) Copyright 2011 Thomson Reuters. Click for Restrictions .

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AT&T Prepares For Deal Collapse

November 24, 2011

By Harro Ten Wolde and Georgina Prodhan FRANKFURT/LONDON (Reuters) – AT&T said it would take a $4 billion charge in case its takeover of T-Mobile USA fails, reflecting the dwindling chances for the deal seen as job-destroying by powerful political opponents. The U.S. telecoms group and T-Mobile owner Deutsche Telekom, said they would continue to pursue anti-trust approval for the $39 billion takeover from the U.S. Department of Justice but withdrew for now applications to the industry regulator. “AT&T Inc and Deutsche Telekom AG are continuing to pursue the sale of Deutsche Telekom’s U.S. wireless assets to AT&T,” they said in a statement on Thursday, the Thanksgiving holiday in the United States. Both the DOJ and telecoms watchdog the Federal Communications Commission oppose the deal, which would reduce the number of national mobile carriers to three while consumers are struggling to make ends meet and unemployment rises. FCC approval would be meaningless if the DOJ blocked the deal, and AT&T and Deutsche Telekom said they would return to the FCC process if they secured approval from the DOJ. Analysts said the merger, badly needed by sub-scale T-Mobile USA — the smallest of the four U.S. national mobile operators — looked less likely than ever to succeed. Espirito Santo analysts said AT&T’s decision to take the $4 billion charge this quarter showed the company’s own assessment of the chances of success had fallen, causing its auditors to force the company to take the hit now. “It tells us something about timing too — suggesting that AT&T may decide to walk away at the first opportunity (March 20 2012) rather than waiting for the ultimate September 20 2012 deadline,” they wrote in a note to clients. Deutsche Telekom shares were up 0.2 percent to 8.76 euros by 1315 GMT (8:15 a.m. ET), broadly in line with the European telecoms index, which was up 0.5 percent. JOB SITUATION Today’s decision follows a blow earlier this week when the FCC said it would try to send the deal to an administrative law judge for review. The FCC says the merger would result in a massive loss of U.S. jobs and investment, and significantly diminish competition, while the DOJ says it would lead to higher wireless prices for consumers and businesses. The DOJ has gone to court to block the deal, and a trial in that case is due to begin on February 13. Any administrative hearing at the FCC, which is charged with evaluating the public-interest merits of the deal, would begin after the anti-trust trial. U.S. consumer spending growth slowed last month and business capital investment plans were weak, although first-time claims for jobless benefits remained in a range that hinted at improving labor-market conditions. AT&T has 260,000 employees, most in the United States. Deutsche Telekom employs 36,000 at its U.S. unit. AT&T argues that the T-Mobile merger could actually create tens of thousands of jobs during integration and network upgrades, and has pledged to bring back 5,000 jobs that it has moved overseas — but many observers are skeptical. “I don’t believe there’s any politician in America who’s interested in being associated with something that has a negative impact on the job situation in America,” Denmark-based telecoms consultant John Strand of Strand Consult told Reuters. NO PLAN B Acquiring T-Mobile would have vaulted number two-ranked AT&T into the leading position in the U.S. wireless market, overtaking Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc. It would also have solved a years-long problem for Deutsche Telekom, whose U.S. unit has long ceased to be a source of growth and is in urgent need of investment. Credit rating agency Moody’s said it believed Deutsche Telekom would rather exit the U.S. market than go it alone. “The options open to Deutsche Telekom if it were to stay in the US market are much less palatable than if it were to exit,” wrote Carlos Winzer, senior vice president at Moody’s. However, the rating agency believes that Deutsche Telekom will fight aggressively alongside AT&T to salvage the sale process in order to improve its weak position in the US. A failure would throw Deutsche Telekom Chief Executive Rene Obermann’s strategy into disarray and may force him to throw money at a business he thought he was rid of. Company officials have said there is no “Plan B.” The company faces a long delay at best and may be driven back into the arms of number three U.S. carrier Sprint Nextel — a less suitable partner for whom T-Mobile USA would not be worth nearly as much now as it was to AT&T in March. A break-up fee of up to $6 billion, including some spectrum and roaming access, would provide some consolation and could allow Deutsche Telekom to sell the U.S. unit at a discount, Strand said. Telecoms consultant Fred Huet of Greenwich Consulting said T-Mobile USA would immediately need to find ways of cutting costs. “They need to find some way of sharing cost across operators,” he told Reuters. “They need to have a better cost base, otherwise they’re going to be in real trouble soon.” (Additional reporting by Chris Steitz and Maria Sheahan in Frankfurt and Georgina Prodhan in London; Editing by Chris Wickham) Copyright 2011 Thomson Reuters. Click for Restrictions .

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This Is One Of The Most Coveted Gifts In The U.S.

November 23, 2011

SAN FRANCISCO — `Tis the season of the tablet. Despite the gloomy economy, shoppers are expected to shell out for tablet computers this December, making them about as popular as candy canes and twinkling lights. The glossy-screened gadgets are the most-desired electronic devices this holiday season. And, of all the gifts people are craving, tablets are second only to clothing, according to the Consumer Electronics Association. The industry group expects U.S. consumers to spend an average of $246 on electronic gifts. With help from his three siblings, Bob Cardina, 26, plans to purchase an iPad for his parents for Christmas. Cardina and his sister live in Washington. His parents live in Tampa, Florida. So he’s excited to be able to video chat with his parents – them on the new iPad, him on his iPhone. To be sure, tablets were on some wish lists last year, but they were mostly prized by gadget geeks. In the past year, they have become more mainstream. Consumers have become comfortable using touch screens, especially as smartphones continue to proliferate. Tablets are popping up in unexpected places, too. Apple Inc.’s iPad in particular is being used as a learning tool in schools, a digital cash register in shops and a menu at restaurants. In 2010, people were “trying to figure out what the whole tablet thing was about,” says Gartner analyst Carolina Milanesi. “Now, people know what to do with a tablet.” For some people, the device has become indispensable for playing and working. While you can surf the Web, send emails and watch movies on a laptop or smartphone, consumers are gravitating to tablets because they can be more convenient. The iPad is still expected to far outsell other tablets this year. So far, in fact, Apple has captured about 75 to 85 percent of the U.S. market, according to technology analyst Rob Enderle. But while many think of the iPad as synonymous with the word “tablet,” plenty of shoppers will be looking for a more affordable tablet to give this year. Two of the most promising competitors come from online retailer Amazon.com Inc. and book seller Barnes & Noble Inc. The companies, major players in the e-reader market, recently released tablets of their own that undercut the iPad’s $499 base price: Amazon’s Kindle Fire, which costs $199, and Barnes & Noble’s Nook Tablet, which costs $249. The Fire, which uses a heavily modified version of Google Inc.’s Android tablet software, is expected to be particularly popular with gift givers in part because of its low price. “When you get below $200, sales go up dramatically,” says Enderle. Enderle thinks the Fire will be a popular gift, especially for kids. To him, it seems sturdier than the iPad with a display built from scratch- and crack-resistant Gorilla Glass, and it’s cheap enough that parents won’t be upset if a child manages to break it. Tom Mainelli, an analyst at research group IDC, expects the Fire and Nook Tablet to take the second- and third-place spots, respectively, behind the iPad during the last three months of the year. Rather than hurting Apple, he believes the success of newer tablets will help grow the entire tablet market. “I don’t think Apple loses just because Amazon wins,” he says. One of these Kindle Fire buyers is 24-year-old Ximena Beltran Quan Kiu, who purchased the device for her mother as a Christmas gift. Beltran Quan Kiu says her mom bought a Samsung Galaxy Tab for herself about a month ago, but didn’t like it and returned it. She’s hoping her mom warms up to the Fire, though, which she can use for reading, surfing the Web and watching movies. To help make sure her mom likes it, Beltran Quan Kiu is also giving a year’s membership to Amazon’s express shipping program, Amazon Prime, which includes free streaming of more than 10,000 movies and TV shows and the ability to borrow certain books from Amazon’s Kindle Owners’ Lending Library. “It might not be the iPad, but it can hold its own against the iPad,” she says.

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Things Smaller Than Apple: The Retail Meat Industry, 2 Space Programs And More (INFOGRAPHIC)

November 21, 2011

It’s been a boom year for Apple. In August, Apple briefly overtook Exxon as the world’s most valuable company . In October, the tech behemoth flirted with a $370 billion market cap, an estimate of the total value of the company. How big is $370 billion? Visual.ly, a data visualization company, has put together an infographic illustrating Apple’s enormity. According to Visual.ly’s research , things smaller than Apple include the U.S. retail meat industry, the cost of the Apollo and space shuttle programs, and the U.S. pharmaceutical market (Learn more about where Visual.ly’s data come from here ). Though Apple’s market cap has since dropped to around $343 billion, the comparisons are still entertaining and many of them are still valid. For even more comparisons, head on over to the site Things Apple Is Worth More Than where Apple’s enormous valuation has inspired even more surprising comparisons. For example, did you know Apple is worth more than four American civil wars , the economy of Singapore , and “all the illegal drugs in the world?” We didn’t — but we’ll be sure to mention it at our next dinner party.

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Al Checchi: We Have Met the Enemy and He Is Us

October 24, 2011

We hear a lot these days about those evil corporations and their pernicious effect on America. Should we hunt down these malefactors of malice? Perhaps, but on examination, they would be us. Off with our heads? Every one of us who is not employed by the government but engages in some commercial endeavor, be it giving manicures or building bridges, conducts these activities either as a sole proprietorship, partnership, or corporation. The differences: unlike proprietorships and partnerships, corporations are taxed twice, once at the corporate level and again at the individual stockholder level, but their owners (shareholders) are insulated from personal liability. For example if I own a restaurant as an individual proprietor, I can be sued personally by an accident victim. A corporation like McDonald’s may be sued for the same accident but its individual shareholders cannot. Without the protections of limited liability, very few individuals would be willing to invest in any enterprise and subject themselves to defending against potentially unlimited liability. Our very first corporate charters were granted by the states to induce private individuals to join together to build large infrastructure projects like bridges and turnpikes. What do American corporations do today? They do the same thing that any proprietor does, e.g. make and deliver goods and services. They succeed or fail based on the difference in the value that consumers put on their products and the cost of producing them – that ugly thing called “profits”. The formula for running a successful business is quite simple: combine human and material resources as efficiently as possible to create the greatest amount of value for the consumer. Most corporations like Apple, Microsoft, Federal Express, Marriott, and Proctor and Gamble obey the rules and strive and succeed at developing and producing popular products and services that create value (what some call corporate greed). Others like Enron and WorldCom break the rules. Corporations are only as good or bad as the people who run them. Just as most people are honest and do not break the law, most people through their actions as (proprietors, partners, and corporate employees) are honest and conduct themselves within its bounds. Some obviously don’t and they should be removed and punished. Most behave ethically; too many don’t. That is human nature. And as in any endeavor, half the people running business enterprises are below average. Only a minority are exceptional. Corporations are our principal providers of employment but that is decidedly not their objective. Their objective is to maximize profits (more corporate greed). They seek ways to make investments and increase value (provide more goods and services at a profit). To do this generally requires that they employ more people. Employment is the byproduct of investment. Governments have a role in this process too. While they don’t create employment directly, they are a major influence on the ability and willingness to make investments that increase employment. Case in point: As recently reported in the Wall Street Journal, California based CKE which operates 3000 restaurants nationwide is no longer opening restaurants in California but is opening 300 in Texas. One of the reasons: In California the regulatory process can take two years versus only 6 weeks in Texas and as a result, the cost of opening a restaurant in California is $200,000 greater. Similarly, America will import approximately $350 billion of oil this year. While we have many proponents of “green energy”, until we develop viable alternatives to fossil fuel, we must continue to consume oil. We have ample untapped oil reserves of our own to replace all imports. If not restricted by government, we would invest in extracting them. This would create jobs in the oil industry. The $350 billion increase in domestic income and spending would produce more jobs. And the increase in supply and resulting decrease in the cost of oil would allow consumers to spend their savings on other things and increase jobs even more. The lesson, if you want to create jobs, shape public policy to attract private investment. America and indeed the world have no shortage of individuals or enterprises that want to make a buck. Off with their heads?

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Peter Watson: Diversity – will Business Ever Believe in Change?

October 24, 2011

In the 1987 film The Secret of My Success , Michael J Fox’s character endures a string of knockbacks at interview so by the end of a gruelling day and feeling increasingly desperate he begs: “I can be anything, just give me a chance…” “Can you be a minority woman?” the interviewer replies. While amusing for its comedy timing this is a divisive issue which challenges many of us at a personal level by questioning received wisdom about justice and opportunity. Is the employer’s stance correct? Are arbitrary targets to expand minority groups’ representation within an organisation the only certain method of improving diversity? Do we need to improve diversity at all? Almost 25 years on from Brantley Foster’s fictional escapades in New York, here in the UK boardrooms remain staggeringly male dominated with just 12.5% of publicly owned companies appointing women to director-level positions. This topic has gained traction as recently as 11 October with the UK’s Corporate Governance Regulator updating its Combined Code to include a requirement for those companies to report annually on their boardroom diversity policy, including gender. My own industry, legal services, has similar obligations to face up to over the coming years, after regulators declared us a sector too commonly associated with one that favours privilege and upbringing over the promotion of social mobility. The Solicitors Regulation Authority has now made the active promotion of equality and diversity by Law firms a key principle that they should all abide by. This has led to a stampede of conscience amongst the UK’s largest law firms with many big names publishing their own diversity statistics. While being an immensely noble effort these stats tell us a great deal about what we already knew, that the demographic background, ethnic, gender and disability makeup of a law firm will often reflect a customer base whose circumstances tend to mirror its own – it’s good for business. Our firm has also undergone an exercise to promote diversity for the principal reason that while our practice is broad, we represent working people on a daily basis. Our commitment to them and the laws which protect them from exploitation or prejudice has to be reflected in our corporate makeup. So instead of publishing statistics we looked outside for independent verification of what we were doing. Our regulator offers limited guidance on how law firms should consider operating, and there is no universally recognised accreditation akin to Investors in People, so we enlisted an independent group to interpret our policies in relation to equality and corporate social responsibility. For those of you craving a stat, we have 31 partners and 17 of them are women, so with regards to that particular indicator our equality mission is on target. Nevertheless, providing opportunities for people from disadvantaged backgrounds or with disabilities remains a challenge for us as an employer and requires continual self-analysis in order to justify our policies on recruitment, our ties with educational establishments and myriad other considerations. Received wisdom, and the established way of doing business, are in the context of promoting diversity in the workplace just another definition for prejudice. It doesn’t surprise me that fewer than 15% of FTSE 250 directors are women, nor that 97% of law firm partners are classed as white; what continues to shock me is that so few of us genuinely believe that this will ever change.

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Steve Jobs Biography Hints At What’s To Come From Apple

October 22, 2011

While at the helm of Apple, Steve Jobs shrouded the company’s plans in secrecy. He even lied regularly, assuring the world Apple had no plans for a certain product, just months before he’d release precisely such a device. Yet Walter Isaacson’s biography of Jobs , which was based on more than forty interviews with the Apple co-founder, lets slip several hints at what may be to come from the company and pulls back the curtain on the balance of power among the executives Jobs installed at Apple. Jobs had ambitions to reinvent television and textbooks, according to Isaacson’s biography . “I’d like to create an integrated television set that is completely easy to use,” Jobs said. As the Washington Post first noted, Isaacson writes that Jobs “very much wanted to do for television sets what he had done for computers, music players, and phones: make them simple and elegant.” “It would be seamlessly synced with all of your devices and with iCloud,” Jobs told Isaacson. “It will have the simplest user interface you could imagine. I finally cracked it.” Apple currently offers a set-top box, Apple TV, that allows users to play content from iTunes and other media providers on their television sets. Yet rumors have circulated for years that an Apple-branded television with more robust integration is in the works. The company has repeatedly dismissed the product as a mere “hobby.” Citing unnamed sources “familiar with the matter,” the Wall Street Journal reported earlier this year that Apple was at work on “new technology to deliver video to televisions and has been discussing whether to try to launch a subscription TV service.” Piper Jaffray’s Apple analyst Gene Munster also predicted that a number of signs, such as the launch of Apple’s iCloud service, Apple’s registration of TV-related patents, and new deals Apple has struck with suppliers, point to the release of an Apple television set by late 2012 or early 2013. However, Munster has previously argued that 2011 would be the year of the Apple-branded television — and users are still waiting for the mythical device. In a 2010 interview, Jobs said he was finished working on the TV industry. “Smarter people than us will figure it out,” he said –- a mere three months before unveiling the second generation of the Apple TV. Isaacson’s biography reveals that Jobs also targeted the textbook industry for transformation and met with major textbook publishers to discuss a partnership with Apple. “He believed it was an $8 billion a year industry ripe for digital destruction,” Isaacson writes. “His idea was to hire great textbook writers to create digital versions, and make them a feature of the iPad.” “The process by which states certify textbooks is corrupt,” Jobs told Isaacson. “But if we can make the textbooks free, and they come with the iPad, then they don’t have to be certified. The crappy economy at the state level will last for a decade, and we can give them an opportunity to circumvent that whole process and save money.” It would hardly be the first time Jobs would take on the challenge of revamping education: NeXT, the company he founded in 1985 after his ouster from Apple, also had ambitions of providing new tools for the classroom, though academic institutions balked at the NeXT computer’s $6,500 pricetag. Jobs’ wife Laurene Powell has been actively involved in education reform for more than a decade. In 1997, she co-founded College Track, a non-profit that aims to increase the number of low-income students who graduate from high-school and go on to receive college degrees. Isaacson’s biography also provides a glimpse into Apple’s corporate politics and the executives who now control its fate. Some doubt whether Tim Cook, who took over as CEO of Apple following Jobs’ resignation in August , can emulate Jobs’ vision and question whether a former COO known for streamlining supply chains can pioneer the industry-changing devices expected of Apple. Jobs, who nominated Cook to be his replacement, may have had his own reservations. He admitted to Isaacson, “Tim’s not a product person, per se.” Yet Jobs also had high praise for Cook, saying he could be a better negotiator than Jobs. “[W]e started to work together, and before long I trusted him to know exactly what to do,” Jobs told Isaacson. Isaacson’s biography suggests that it is Jonathan Ive , Apple’s senior vice president of industrial design and the architect of the company’s sleek and iconic devices, who may be left with the most power — which is exactly the way Jobs intended it, according to the book. “If I had a spiritual partner at Apple, it’s Jony,” Jobs said. “He has more operational power than anyone else at Apple, except me. There’s no one who can tell him what to do, or to butt out. That’s the way I set it up.”

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Steve Jobs’ Reading List and Playlist For Life

October 21, 2011

“I like living at the intersection of the humanities and technology,” Steve Jobs said once. LSD, Bauhaus and Zen Buddhism shaped Apple’s pioneering products as much as anything that took place on the assembly lines. They were among Jobs’ greatest influences and they shaped his attitudes toward design, business and innovation. The books Jobs read, particularly as a teen and college student, helped expose him to the ideas and experiences that would serve as Apple’s foundation years later. Walter Isaacson’s 571-page biography of Jobs , a copy of which was purchased by The Huffington Post, provides an unprecedented look at the texts — by writers ranging from William Shakespeare to Paramahansa Yogananda — that influenced Jobs; “required reading” for anyone seeking a deeper understanding of the visionary. Less than a handful of the texts Isaacson mentions directly concern technology: one is Clayton Christensen’s “The Innovator’s Dilemma,” which Isaacson writes , “deeply influenced” Jobs, and the other is Ron Rosenbaum’s 1971 Esquire article “Secrets of the Little Blue Box,” a profile of hackers who could tap into phone networks that later gave rise to Jobs’ first collaboration with Steve Wozniak, who went on to become Apple’s co-founder. Jobs’ interest in literature and the arts burgeoned during his junior and senior years of high school, which coincided with his first drug use. Jobs tried marijuana at 15 and before graduating high school began experimenting with LSD. (He later observed, “Taking LSD was a profound experience, one of the most important things in my life,” he said.) “I started to listen to music a whole lot, and I started to read more outside of just science and technology — Shakespeare, Plato. I loved King Lear ,” Jobs recalled of his teen years. Isaacson notes that “Moby-Dick” and Dylan Thomas’ poetry were among Jobs’ favorite works at this point in his life. During his freshman year at Reed College, Jobs befriended Daniel Kottke, who went on to work at Apple, and together they devoured books such as Shunryu Suzuki’s “Zen Mind, Beginner’s Mind,” Chogyam Trungpa’s “Cutting Through Spiritual Materialism” and Paramahansa Yogananda’s “Autobiography of a Yogi,” a book Jobs read and re-read many times during his life. Isaacson writes, Jobs found himself deeply influenced by a variety of books on spirituality and enlightenment, most notably Be Here Now, a guide to meditation and the wonders of psychedelic drugs by Baba Ram Dass, born Richard Alpert. “It was profound,” Jobs said. “It transformed me and many of my friends.” Throughout his life, Jobs embraced numerous extreme, even obsessive, dietary regimes. He fasted periodically and, at various points, was a vegetarian, vegan and fruitarian, though he made an exception for unagi sushi while in Japan. This attitude toward food began to take shape in college after Jobs read “Diet for a Small Planet” by Frances Moore Lappe in his first year at Reed. “That’s when I swore off meat pretty much for good,” Jobs told Isaacson, who adds Jobs became “even more obsessive” about food after reading Arnold Ehret’s “Mucusless Diet Healing System.” One book in particular stayed with Jobs his entire life, and Isaacson noted that it was the only book Jobs had downloaded on his iPad 2: “Autobiography of a Yogi,” “the guide to medication and spirituality that he had first read as a teenager,” Isaacson writes, “then re-read in India and had read once a year ever since.” Yet no discussion of the artists who influenced Jobs is complete without mentioning the music that made the man. Jobs called Bob Dylan “one of my heroes” and had over a dozen Dylan albums on his iPod, along with songs from seven different Beatles albums, six Rolling Stones albums and four albums by Jobs’ onetime lover Joan Baez. Jobs likened The Beatles’ creative process to Apple’s own. While listening to a bootleg CD from one of the band’s recording sessions, Jobs remarked, “They did a bundle of work between each of these recordings. They kept sending it back to make it closer to perfect … The way we build stuff at Apple is often this way.” He also framed his motivations and the principles that drove him forward in terms of Dylan and The Beatles. “They kept evolving, moving, refining their art,” Jobs said of the artists. “That’s what I’ve always tried to do — keep moving. Otherwise, as Dylan says, if you’re not busy being born, you’re busy dying.”

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The 30 Greenest Tech Companies

October 21, 2011

Newsweek has also compiled a list of the world’s 30 greenest tech companies as part of its 2011 Green Rankings . Some of them you may recognize from the list of the overall 15 greenest U.S. companies . For this list, Newsweek pulled all of the tech companies, including both hardware and software makers, from its 2011 greenest companies in the world list. The magazine partnered with two research firms, Trucost and Sustainalytics , and developed the methodology “in consultation with an advisory panel of corporate sustainability experts.” An unrelated recent study, entitled ” Analysis of Small Business Innovation in Green Technologies ,” by the U.S. Small Business Administration found that small business leads the way in “green technology innovation” in America. According to a press release , small business only accounts for eight percent of U.S. patents, yet they account for 14 percent of green tech patents. More information about Newsweek’s 2011 Green Rankings methodology can be found here . View the 2011 Green Rankings list below courtesy of Newsweek/The Daily Beast . —

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Apple Slams iPhone Rumors

October 19, 2011

By Poornima Gupta and Edwin Chan SAN FRANCISCO (Reuters) – Apple Inc stunned Wall Street by reporting results that missed expectations for the first time in years, blaming rumors of the new iPhone for hurting demand in the September quarter. Shares of Apple fell 7 percent in extended trading on Tuesday, wiping some $27 billion off the value of the world’s largest technology company. It was Apple’s first quarterly earnings under Chief Executive Tim Cook, who took over from Steve Jobs in August at a critical juncture for the company. Apple is battling Google Inc in the mobile arena, as well as other challengers such as Samsung and Amazon.com Inc. “Investors are going to start to speculate that there is change under way now that Jobs is gone, and that there’s trouble ahead. We don’t share that point,” said Channing Smith, co-manager at Capital Advisors Growth Fund, which holds Apple shares. “The iPhone is where the weakness was and it’s an explainable one. The strong demand for the iPhone 4S set up strong demand for the holiday season.” Apple said it sold 17.07 million iPhones in its fiscal fourth quarter ended September 24 — well short of the roughly 20 million forecast by analysts. The iPhone is Apple’s flagship product, yielding some 40 percent of annual sales. Revenue rose 39 percent to $28.27 billion, lower than the average analyst estimate of $29.69 billion, according to Thomson Reuters I/B/E/S. It was the first time Apple missed revenue expectations since the fiscal fourth quarter of 2008. Net profit was $6.62 billion, or $7.05 a share. That fell shy of expectations for earnings of $7.39 per share. The last time Apple missed EPS estimates was in the first quarter of 2001, according to Thomson Reuters I/B/E/S. “Expectations for this company were red-hot, that is why we downgraded it,” said BGC Partners analyst Colin Gillis, who lowered his rating on the shares days before. “The reality is their business is not an annuity. They have to sell their quarter’s worth of revenue every 90 days.” “They had a big upgrade cycle with the iPhone, the numbers came in weak. They need to set records every time they report to keep up the momentum.” Apple executives said consumers had postponed purchase decisions until the crucial holiday quarter because of speculation that a new phone was on the way. Apple unveiled the iPhone 4S in early October, and it hit stores last Friday. Apple — which typically offers projections so conservative they are disregarded — on Tuesday forecast December quarter revenue and earnings above Wall Street’s estimates. “There’s no question this was a transition quarter ahead of the 4S,” said WP Stewart portfolio manager Michael Walker. “With the early pace of iPhone 4S sales, my guess is that disappointment is relatively short-lived.” “I’m not going to call Q3 a throwaway quarter for iPhones, but it was definitely a transition.” A PERIOD OF TRANSITION Cook started his first earnings conference call as CEO by honoring Jobs, who died on October 5 after a years-long battle against pancreatic cancer. He said he was “very confident” of posting record iPhone sales in the current quarter. The company moved 4 million iPhone 4S units — more than double its predecessor — in its first three days, despite lukewarm reviews. Another area for optimism for Apple was iPads. The company moved 11.12 million units during the quarter despite attempts by various manufacturers, including Samsung, to capture a slice of the tablet market. Now Amazon.com has also entered the fray with its Kindle Fire tablet. Acknowledging the competition, Cook said it was “reasonable to say” none of Apple’s rivals have gained any traction, and he expected the tablet market to be bigger than personal computer in the long term. Cook also told analysts that Greater China — mainland China, Hong Kong and Taiwan — was becoming an all-important region for Apple as it has “quickly become No. 2 on our list of top revenue countries very, very quickly.” Revenue from the region increased four-fold to $4.5 billion during the quarter. The new CEO fielded questions on Apple’s cash pile of over $81 billion, saying the money provided flexibility for acquisitions and investing in the supply chain. “That said, I’m not religious about holding cash or not holding it,” he added. “It’s a topic for the board on an ongoing basis.” Apple’s Mac sales saw a large spike during the September quarter but it failed to lift earnings. Apple sold 4.89 million Macs, up 27 percent from a year ago. Gross margin came to 40.3 percent — a tad higher than Wall Street’s forecast of 39.74 percent. International sales accounted for 63 percent of the quarter’s revenue. “We expected iPhone sales to decline in the September quarter from the June quarter as a result of the announcements we made … in June, where we said we would launch iOS 5 and iCloud in fall,” Peter Oppenheimer, Chief Financial Officer, said in an interview with Reuters. “That basically created the rumor of the day across the September quarter, especially at the end.” Apple said it expected December quarter earnings of $9.30 a share on revenue of about $37 billion. Wall Street is projecting $9.01 for the period, but it was unclear if that was comparable. “What is interesting is the guidance is less conservative than usual for their next quarter. It’s a timing issue, where it looks like the business that people thought would be in the September quarter is occurring in the December quarter,” said Sterne Agee analyst Shaw Wu. Apple shares fell to $394.78 in after-hours trading, after closing at $422.24 on the Nasdaq. (Additional reporting by Edwin Chan in Los Angeles, Liana Baker and Jennifer Saba in New York; Editing by Gary Hill, Bernard Orr) Copyright 2011 Thomson Reuters. Click for Restrictions

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TRAGEDY: Brothers Who Work Side-By-Side Die After Plant Accident

October 19, 2011

BAKERSFIELD, Calif. — Kern County coroners say a worker who was left brain dead after an accident at a recycling plant last week was taken off life support and has died. The accident killed his younger brother, 16-year-old Armando Ramirez, on Wednesday. The two were working side-by-side, cleaning out a tunnel at the Community Recycling and Resource Co. in Lamont. Armando was overcome by the gas and Heladio was injured trying to save him from the tunnel. Rescuers had to use breathing equipment to bring the brothers out of the tunnel. State and federal labor officials have opened investigations into the accident. ___

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U.S. judge says Samsung tablets do infringe Apple

October 13, 2011

By Dan Levine SAN JOSE, California (Reuters) – A U.S. judge said Samsung’s Galaxy tablets infringe Apple’s iPad patents, but also that Apple might have a problem establishing the validity of its patents. The comments from U.S. District Judge Lucy Koh came on Thursday in a court hearing on Apple’s request to bar some Galaxy products from being sold in the United States. Apple and Samsung are engaged in a bruising legal battle that includes more than 20 cases in 10 countries as the two jostle for the top spot in the smartphone and tablet markets. Earlier on Thursday, an Australian court slapped a temporary ban on the sale of Samsung’s latest computer tablet in that country. Apple sued Samsung in the United States in April, saying the South Korean company’s Galaxy line of mobile phones and tablets “slavishly” copies the iPhone and iPad. Apple then filed a request in July to bar some Samsung products from U.S. sale, including the Galaxy S 4G smartphone and the Galaxy Tab 10.1 tablet. Mobile providers Verizon Wireless and T-Mobile USA have opposed Apple’s request, arguing that a ban on Galaxy products would cut into holiday sales. Apple must show that Samsung infringed its patents and that its patents are valid under the law. At the hearing on Thursday in a San Jose, California federal court, Koh also said she would deny Apple’s request for an injunction based on one of Apple’s so-called “utility” patents. She did not say whether she would grant the injunction based on three other Apple “design” patents. Koh characterized her thoughts on the utility patent as “tentative” but said she would issue a formal order “fairly promptly. The case in U.S. District Court, Northern District of California is Apple Inc v. Samsung Electronics Co Ltd et al, 11-1846. (Editing by Tim Dobbyn and Steve Orlofsky)

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Judith Samuelson: Steve Jobs Made Sure Apple’s Main Mission Was Satisfied Customers, not Profits

October 11, 2011

Amid the deep affection and accolades pouring out this week to commemorate Steve Jobs, I heard a message that has the power to transform how we talk about business in classrooms and boardrooms alike. The message comes through loud and clear, from both colleagues and competitors. Jobs’ passion — even reverence — for satisfying customers trumped conventional business objectives like making money and “serving the shareholder.” Let’s call it common sense capitalism: focus on quality and excellence in delivering goods and services — and ultimately, you create value for everyone who touches the enterprise — the customers, as well as investors. Indeed, like Apple, you might change the world. The example of Apple and Steve Jobs’ success can recall the best attributes of another era of capitalism, before ideas like “shareholder primacy” and “profit maximization” took hold of the textbooks and became the mantra of the business press. Jobs’ legacy tips the balance in the battle of the heart about the purpose of business — now we need to conquer the easy reliance on bad “theory” and simplistic metrics as we orient the next generation of business minds . At an Aspen Institute roundtable hosted by UCLA School of Law in late September, scholars from leading business and law schools discussed what we teach about the purpose of the firm. I was already convinced that we need a new narrative about the purpose of business, but here is some of what I learned from the exchange. First, boards DO have discretion to make decisions that balance hard numbers with intangibles like quality, and service. So-called “shareholder primacy” measured by share price, is not enshrined in business law. The courts, specifically, the Delaware court where so many public corporations reside, has been clear on this point: the Business Judgment Rule allows boards to put the long-term health of the enterprise before the short-term demands of stock analysts and traders. Two, in the business world, complexity abounds and things are not getting any simpler. Every company manager or board member worth his or her salt must consider multiple objectives in arriving at a decision or investment. It is insulting, and potentially quite damaging to the health of the company, and ultimately, the shareholders, to think otherwise. Only in the dreams of “Chainsaw” Al Dunlap, the infamous executive who seemed to take perverse glee in reducing headcounts, can boards and managers ignore the long-term impacts of business decisions on employee morale, customer loyalty, supplier satisfaction, environmental demands, brand reputation, and so on. Three, the fact that companies have complex objectives and mission statements that speak to things like quality products, customer service, and being a good place to work, does not mean that shareholders are ignored–indeed they are increasingly noisy and influential. But, there is a difference between responding to short-term pressures of some investors and having a legal mandate to do so. Even Milton Friedman was more nuanced than he is given credit for. His contention that “the social responsibility of business is to increase its profits” may have taken on mantra-like status among many executives, researchers and journalists, but he also offered illustrations of when a company would want to invest in the local community, for strategic reasons and when does government need to weigh in. And, Professor Mike Jensen of Harvard Business School, who had a lot to do with the current fixation with paying executives in stock and stock options, to deleterious effects in the last decade, now encourages executives to think differently. According to Jensen , “CEOs and CFOs put themselves in a bind by providing earnings guidance [forecasts] and then making decisions designed to meet Wall Street’s expectations for quarterly earnings.” Finally, it matters a great deal that we get this question of business purpose right. Otherwise, business will fail to step up to the promise of capitalism as a generator of both wealth and societal well-being. There is growing support for Apple’s common sense approach. A new crop of Deans in our best business schools are working to connect business education to the important societal challenges where business capacity and influence matter. Contemporary management thinkers, like Michael Porter and Roger Martin are building on the timeless ideas of a Peter Drucker or a Charles Handy and write about the need for a robust mission that connects the enterprise back to the franchise to operate and to public purpose. Business historians remind us that the privilege of limited liability, which protects business owners and facilitates risk-taking, was first extended to private enterprises to create public goods. The best executives are wise enough to realize that zealous pursuit of profits is not a viable long-term strategy. The founders of Google and Facebook, as well as the leaders of Unilever, PepsiCo, Xerox and Procter and Gamble and a host of other public companies, plus private firms, like Levi Strauss and SC Johnson, are clear about the complex, long-term orientation and mission of their enterprises. Even Jack Welch has weighed in, calling a fixation on shareholder value “the Dumbest Idea in the World.” As a consumer of the iPod or iPad, you don’t need to read any lofty words or CEO’s speeches to get it however. The culture and values at Apple are transcendent. Instead, you get to hold the sublime mission of Steve Jobs in the palm of your hand.

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Occupy Wall Street: Egyptian Activist Goes ‘From Liberation Square To Washington Square’ (VIDEO)

October 8, 2011

Thousands of Occupy Wall Street supporters gathered in Washington Square Park on Saturday afternoon for a General Assembly intended to spread the movement’s message. After several introductory speakers, the crowd lit up when an Egyptian activist named Mohammed Ezzeldin explained what he saw was the connection between Occupy Wall Street and the protests against Hosni Mubarak. “I am coming from there — from the Arab Spring. From the Arab Spring to the fall of Wall Street,” Ezzeldin said, his voice echoed by the crowd of thousands. “From Liberation Square to Washington Square, to the fall of Wall Street and market domination, and capitalist domination.” His passionate speech, which even included a reference to Karl Marx, made a startling comparison between what happened in Egypt earlier this year and what is now happening in the United States. “Many things separate us,” he said. “National borders. Homeland insecurities. Armies, corporations and police. They have their laws. They have their debts. And we have our revolution. We are the 99 percent.” Ezzeldin, a 28-year-old self-described “leftist activist” who is currently living in Jackson Heights and studying at the City University of New York’s Graduate Center, told HuffPost he was camped out in Tahrir Square just a few months ago and is now spending days in Zuccotti Park. “There are some differences,” he said, but he believes “any success for the struggle in the United States is helpful for the rest of the world.” Ezzeldin argued that making the protests more confrontational and bringing in labor unions will be critical for the success of the movement in the United States. “There is an illusion about freedom — about freedom of speech and freedom of organization in this country,” he observed, pointing to New York’s laws against tents and megaphones. “What I thought the image exported to the rest of the world… Well, it’s not completely false but there are many obstacles.” As for the NYPD’s response to demonstrations so far, Ezzeldin was philosophical. “Police is the police, in Egypt, in the United States. Police is the police. There is no good cops and bad cops, they are all cops,” he said. Relations between police and demonstrators at Saturday afternoon’s gathering were cordial .

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GOP Candidate Misfires On Big Issue For Republicans

October 8, 2011

WASHINGTON — Republican presidential candidate Mitt Romney promised in his first major foreign policy speech to reverse “massive defense cuts” that actually have not happened. And he pledged to deploy missiles and ships that already are largely in place. A look at some of his statements at The Citadel military college in South Carolina on Friday and how they compare with the facts: ROMNEY: “As president, on day one, I will focus on rebuilding America’s economy and I will reverse President Obama’s massive defense cuts. Time and again, we have seen that attempts to balance the budget by weakening our military only lead to a far higher price, not only in treasure, but in blood.” Romney also has vowed to increase the size of the military by 100,000 troops, a move he says is needed to reduce the hardship of long and frequent deployments. THE FACTS: There have been no “massive defense cuts” under Obama, although he has slowed the projected rate of increase and in April asked the Pentagon to identify an additional $400 billion in reductions over the next 12 years. When he took office, the defense budget was $513 billion, not counting $153 billion to pay for the wars in Iraq and Afghanistan. For the budget year that ended Sept. 30, the figure was $530 billion, with an additional $159 billion to pay for the wars. For the current fiscal year, Obama requested $553 billion for the defense budget, exclusive of war costs. But in a deal worked out by Congress and the White House as part of a deficit-reduction plan in August, he was forced to come down to $513 billion. As for troop numbers, Obama’s previous defense secretary, Robert Gates, put the Army and Marine Corps on a path to reducing troop numbers to adjust to the winding down of combat in Iraq and plans to reduce troops in Afghanistan. The Army is to drop from its current 569,000 to 547,000 by September 2013, and then to 520,000 by 2015. The Marines are to drop from 202,000 to a figure yet to be specified but in the neighborhood of 186,000 by 2015. Adding 100,000 troops is expensive, and it’s not clear from Romney’s remarks what they would do. The Marine Corps, for example, actually wants to cut its size. It has traditionally numbered about 175,000, and was bumped up to 202,000 temporarily to address its long “Army-like” missions in Iraq and Afghanistan. Once those are over it wants to get back to its core mission, which is not extended land warfare. ___ ROMNEY: In his first 100 days in office, pledges to “reverse the hollowing of our Navy and announce an initiative to increase the shipbuilding rate from nine per year to 15. I will begin reversing Obama-era cuts to national missile defense and prioritize the full deployment of a multilayered national ballistic missile defense system. … I will enhance our deterrent against the Iranian regime by ordering the regular presence of aircraft carrier task forces, one in the Eastern Mediterranean and one in the Persian Gulf region.” THE FACTS: The number of ships in the Navy has been declining steadily since the 1980s. Ten years ago, the fleet numbered 316. Warships have not been a priority for the Pentagon over a decade when the military has been fighting small-scale wars with minimal combat at sea. For the last several years the Navy has said it needs a minimum of 313 ships to perform its missions. It now has 284 ships, up from a low of 278 in 2007. Despite Romney’s implication, there already is a full-time carrier presence in the Persian Gulf and has been for many years. There is no full-time presence in the Mediterranean, although carriers are frequently there for deployments in the Middle East. A national missile defense already is deployed and being expanded. There are 30 ground-based interceptors based in Alaska and California, along with a network of radars and command and control stations to operate it. In addition, there are 24 Navy Aegis ships with a missile defense capability already in service.

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WATCH: #OccupyWallStreet Becomes NYC’s Newest Tourist Attraction

October 8, 2011

Some have come to listen and others simply to watch, but it is clear that many travelers now see the #OccupyWallStreet protest as a New York Destination, at least while it lasts. Eager tourists lugging their Metropolitan Museum of Art shopping bags through Zuccotti Park duck under Che Guevara flags and dodge young protesters shouting anti-bailout slogans. The juxtaposition is odd, but no one seems to mind. The protesters are ready to explain their various causes to those that will listen and the tourists don’t seem to find the stale smell of weed and overused sleeping bags off-putting. When a tour bus stops at the edge of the park, the protesters urge the passengers to disembark. “Come see America,” shouts a young man waving a cardboard sign. “Tomorrow,” a woman shouts back. The bus pulls away toward the World Trade Center. A large number of the tourists in the park are young and Asian. They take pictures and avoid the big television cameras lined up like cannons. When a young girl dances up to a group of them and offers them yellow carnations, they smile and tuck them behind their ears. A Swedish couple on the sidewalk nearby is engaged in a halting conversation about the trade deficit with a sign-wielding college student when a police officer tells them to move along. The NYPD is keeping foot traffic flowing and — even as they give way — tourists take photos of the burly officers, who seem in turns game and annoyed. “Yeah, yeah, yeah,” says one policeman as he disperses a crowd amid flashes. The protesters are excited that they’re attracting a crowd: People are the medium and crowds are the message. Whether they are sympathetic to the politics of the protesters or not, the tourists are swelling their ranks just by entering the park. Numbers mean media attention, which in turn means more numbers: Many tourists say they came by after seeing the protest on CNN. A Swedish couple on the sidewalk nearby is engaged in a halting conversation about the trade deficit with a sign-wielding college student when a police officer tells them to move along. The NYPD keeps people moving along and — even as they give way — tourists take photos of the burly officers. A man approaches a girl holding a sign saying, “We are the 99%,” and takes out his camera. She poses for a picture with her hand rolled cigarette dangling from her mouth. The man looks at his camera display, smiles and says “Thank you.” “No problem,” says the young model. She blows out a long stream of smoke as the man walks away, knowing that eyes are on her. A few blocks away, another pocket of tourists gather behind the metal barricades outside the Stock Exchange, waving at police horses and bouncing off hurried traders. They are here to see the the pumping heart of global capitalism and the sounds of the protests are nothing more than a soft but steady beat.

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Tea Party Leaders Dub Wall Street Movement ‘Human Sea Of Discontent’

October 7, 2011

WASHINGTON — Two Tea Party luminaries have some advice for the Occupy Wall Street crowd: get a message, and clean up your act. Not that Reps. Allen West (R-Fla.) or Steve King (R-Iowa) think OWS has anything legitimate to say, or that they sympathize at all with the anger that has been on display in protests from New York to California. Indeed, the lawmakers see the protests as artificial. “If they knew what their grievance was then maybe one could have some sympathy, but I can’t really identify their grievance,” King told The Huffington Post. West laughed when asked if he could identify at all with the protesters. “No, I don’t,” he said, adding that their movement was not genuine. “I don’t see what the point is, and I think it’s going to backfire because when you peel the onion back, you find out who’s behind it and who’s financing it — it’s not a true grassroots movement. It’s not a true statement.” Critics said the same thing of the Tea Party movement in its earliest days, pointing to funding and organization provided by well-funded groups like FreedomWorks. “FreedomWorks tried to come in then and capitalize on it,” West refuted. “The Tea Party is going to keep on whether FreedomWorks exists or not.” But aside from not being a real movement, and is spite of his charge that the protests are a creation of unions, West said one of the biggest problem of the Wall Street protesters is that they have no message. “I don’t know what these kids want. I mean, if they stand up and say ‘We want the end of capitalism, we hate corporations…,’” West said, trailing off into a chuckle. King also suspected unions are behind the movement, but found it far less amusing than West. “I look at the signs that are there — it’s a human sea of discontent,” King said, adding that he spotted anarchists in the crowds on TV. “This is the Left looking for a cause,” he said. He also added that he’s “seen no evidence” that the movement is organic. He did not buy that they were angered by the the lack of regulation that sparked the ongoing housing crisis. “Aren’t they volunteering to live in the street without housing right now? So it can’t be very important to them, I would think,” he said. King also argued that there is no other comparison to be made to the Tea Party, even though some of them were angry, too. “The anger of the Tea Party was because this government is spending too much money and it’s not operating within the bounds of the Constitution — that’s what ties the Tea Party together,” King said. “The differences we have are that I don’t know of any member of the Tea Party that’s been arrested,” he said. “They are a peaceful group of people that could just as well be the folks at my church picnic. “And they clean up after themselves. Let’s see what kind of mess Wall Street is when they leave,” King continued, before offering a few suggestions. “That’d be my advice to them if they want to be like the Tea Party: Don’t get arrested, and clean up after yourselves,” he said. “And by the way, see if you can find some constitutional underpinnings to support an argument — whatever it may be. I challenge them to do that.”

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Dan Solin: Morningstar Should Be Ashamed of Its 401(k) Plan

October 5, 2011

Morningstar is supposed to know more about mutual funds than anyone else. All the more surprising that it would proudly publicize the criteria it used to select mutual funds in its own 401(k). A recent blog by Russel Kinnel, Morningstar’s director of mutual fund research, noted the committee selecting these funds for the plan tries hard to keep it “in peak form.” The funds are chosen for “strong fundamentals such as cost, management, stewardship, and strategy.” I feel sorry for Morningstar’s employees. The fund selections represent everything that is wrong with 401(k) plans in this country. Here are some suggestions for Morningstar’s committee. They reflect finance 101. It’s sad the committee is so clueless about them: Your Employees Need Portfolios, not funds. Very few employees have the ability to put together a risk-adjusted portfolio from a selection of a large number of fund options. Instead of giving them twenty-three funds to choose from, why not offer globally diversified portfolios of stock and bond funds at different risk levels, ranging from conservative to aggressive? Get rid of all your actively managed mutual funds. How can you possibly justify having twenty-one actively managed funds and only two index funds as investment options in your plan? You create a lot of the mutual fund data, do you simply ignore it when it comes to the welfare of your employees? The likelihood of your actively managed funds outperforming their benchmarks over a ten year period is statistically extremely small. Only about five percent of actively managed funds equal their benchmarks over a decade. It’s hard to believe your committee is using past performance as a benchmark. There is precious little data indicating that stellar performance persists. I assume you are familiar with the SEC mandated caveat that “past performance is no guarantee of future results.” I’m sure your committee believes it’s doing something useful when it engages in the kind of analysis detailed in your article. It really is just wasting time, feeling important and populating your 401(k) plan with expensive funds likely to enrich mutual funds and reduce the returns of participants. Do you pay any attention to academic research? Instead of doing an analysis of historical fund performance which has no predictive value, consider paying attention to the overwhelming research supporting index based investing. The portfolios in your plan should consist solely of low management fee stock and bond index funds. If you are serious about wanting a plan that is in “peak form”, take a look at the SuperSmart Portfolios set forth in my book, The Smartest Portfolio You’ll Ever Own . Those portfolios are based on the extensive research of Professors Fama and French. This research is taught in virtually every business school in this country and is the basis for how over a $1 trillion of really smart money is invested. By tilting portfolios towards small company stocks and value stocks, you could increase the expected returns of your employees for a given level of risk. I’ve done all the work for you. How difficult would it be for you to implement this simple plan? If you need more support, it is exhaustively set forth in my books and in books by John Bogle, Burton Malkiel, Larry Swedroe, Mark Hebner, Jason Zweig, Allan Roth, William Bernstein and many others. This research is endorsed by many Nobel Laureates in Economics. Does your committee have any research justifying its methodology? Are you worried about being sued? If you don’t care about the best interest of your employees, maybe you should be guided by self-interest. Your line-up of primarily actively managed funds makes you a target for a lawsuit from employees alleging that you are breaching your fiduciary duty to them. I don’t know if you use an advisor for your plan. When I see these kinds of investment options, I usually find that the advisor is receiving “revenue sharing” payments from the mutual funds. If your advisor is receiving these funds, he cannot be a 3(38) ERISA fiduciary. If I were you, I would insist that any advisor to my plan be a 3(38) ERISA fiduciary because only these fiduciaries accept 100 percent of the liability for the selection and monitoring of the investment options in the plan. 3(38) ERISA fiduciaries cannot accept revenue sharing payments or have any conflict with the best interest of plan participants. Don’t you want this assurance? In my opinion, your plan is in the best interest of your advisor and the actively managed mutual funds populating your plan. I give you credit for writing about your selection process, but you really should be ashamed to tout this plan as an example for others to follow. Dan Solin is a Senior Vice President of Index Funds Advisors (ifa.com). He is the author of the New York Times best sellers The Smartest Investment Book You’ll Ever Read , The Smartest 401(k) Book You’ll Ever Read , and The Smartest Retirement Book You’ll Ever Read . His new book, The Smartest Portfolio You’ll Ever Own , was released in September, 2011.The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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Sal Candela: Mobile or Mobility

October 4, 2011

Hundreds of speakers. 119 seminars. 20 official venues. Handful of conferences and awards galas. And of course, countless parties and dinners. Bigger and better — Advertising Week is back! Throughout this week we are promised that the Advertising Week panels, conferences, forums, roundtables, and keynotes will address the utmost important questions that the Advertising community is asking. Putting aside the dozens of parties, concerts, and cocktail hours, this week provides us with an opportunity to take a hard look at ourselves and ask ‘What can we improve? What can we do better? How can we solve major issues?’ Amidst the usual slew of topics, “mobile” will be featured in 8 different panels this week. After watching Day 1 unfold, I can point out several panels that didn’t feature mobile but ended by touching upon it in some way. Is this because “mobile” is a hot buzzword OR is it because mobile is impacting every single media channel in some form? I’m here to tell you it’s the latter. Yet anytime I talk with someone — even those in advertising — and I tell them that I’m in mobile, they say ‘Oh yeah? You make ads that run on phones, right?’ Wrong! Mobile marketing cannot be narrowly defined as reaching people on cellular phones. The truth is that when we say mobile we really mean mobility. Mobility is about reaching an audience on-the-go, an audience with a certain mindset, an audience that conducts life on a device that allows for the consumption of all sorts of content in a portable format. We’ve all imagined some scenario where we’d one day be able to target a shopper just as she’s passing by her local grocery store, or delivering an ad to a mom when she’s at the park playing with her children, or reaching a millennial when he is commuting to school and watching videos on YouTube. These imaginative scenarios are now reality. All of this is possible due to a vast amount of content made available for portable consumption, coupled with increasing speeds of connectivity. Another reality — we expect smartphones to be in the hands of 1 in 2 Americans by the end of 2011. Think about it for a minute and tell me that mobility isn’t already impacting every single media channel. TV, Print, Out-of-Home, and Radio are all going through some major transformations where mobility is directly affecting business models for both publishers and also changing consumer habits. Look at TV for instance. Video distribution is challenging the networks and service providers to make some tough decisions on how to deliver their content across increasingly popular devices like smartphones and tablets. And once you say tablets, one can’t help but think about the major changes that we are seeing in Print. Magazines and newspapers are feverishly trying to figure out how to create a long-lasting revenue stream in an effort to monetize the digital versions of their monthly, weekly, or daily content. Out-of-Home already reaches people on-the-go, so it’s only natural that we build advertising programs that encourage people to engage and participate with these digital boards through their mobile devices. After all, a mobile device is basically attached to our hips, making this a perfectly synergistic opportunity to connect the two mediums. And lastly Radio — an industry that continues to adapt. From broadcast radio, to satellite radio, to the most recent ‘personalized digital radio’, consumers are still spending time within radio-like environments and most recently we’re seeing people spend hours in apps like Pandora. What’s interesting is that people are spending more time on Pandora’s mobile app rather than on their desktop website. So starting this week, anytime you hear mobile — think mobility. You can count on me to continue to curate the best in mobile trends, comments, and topics covered this week. I’ll be sure to bring you what you may have missed. Heck, I’ll be there taking notes on my tablet and firing off emails on my iPhone.

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Natalie Pace: The High Price of Gas (in Lives)

September 26, 2011

Business 101 teaches us that failure is valuable to business. The Apple computer and the IBM PC rose out of the ashes of the Osborne computer bankruptcy. The colossal failure of eToys didn’t stop Amazon from becoming the most successful retailer on the planet. Dot Coms collapsed in 2000, but Apple is worth $380 billion today. And even as Solyndra solar failed, Sunpower Solar remains a worldwide leader in power output, with sales that are almost double what they were two years ago. As talking heads kick the Solyndra scandal around to score political goals, as if it’s the only green company worth discussing, there are corporations, countries and individuals that are using green products to increase economic growth, save lives, cut costs, create jobs, increase national security and reduce pollution. Economic Growth Having a leading solar panel manufacturer, like Sunpower and others, at a time when China is investing multi-billions in clean energy could be key to U.S. economic growth. A report by The Pew Charitable Trusts states that China has developed the world’s most aggressive strategic plan for clean energy adoption. China became the worldwide leader in clean energy with $34.6 billion in investments in 2009. China vows to have 500,000 electric, hybrid and fuel-cell vehicles on the road by 2015 and five million by 2020. The government is employing tax incentives, Cash for Clunkers , feed-in tariffs and government spending to promote the adoption of electric vehicles, next generation information technology, energy efficient products and renewable energy. According to Yang Jiechi, the minister of foreign affairs, People’s Republic of China, who spoke at the Clinton Global Initiative ‘s annual meeting on Sept. 21, “It is very important to build environmentally friendly mechanisms. We have spent a lot of capital on hybrid cars and electric cars.” Focusing on fuel efficiency made Toyota Motors the No. 1 automaker in the world. U.S. automakers like Tesla Motors , General Motors and Ford are banking on having a strong EV presence going forward — with the Chinese market directly in their sights. Is this the time to cut funding to The Advanced Technology Vehicles Manufacturing (ATVM) program? Health In cities like Beijing, Los Angeles, New York and even Las Vegas, it’s not just a question of being on the right side of global warming. It’s a question of reducing pollution and cutting down on respiratory illnesses. Saving Lives Oil prices are sky high, but the cost of fuel in lives is even higher. According to Thomas Hicks , the deputy assistant secretary of energy for the U.S. Navy, who spoke to me at CGI , “For every 50 fuel convoys, we have one American killed or wounded. For us, that’s just too high a price to pay for fuel.” Bringing fuel into “the theatre” means sending convoys from Pakistani ports through insurgents and IEDs (Improvised Explosive Devices) to Afghanistan. To reduce the risk and save lives, Ray Mabus, the secretary of the Navy, has outlined five energy goals , including: 1. Incorporating “green” evaluation factors when awarding contracts 2. Sailing the “Great Green Fleet” 3. Reducing petroleum use in non-tactical vehicles 4. Increasing alternative energy ashore 5. Increasing alternative energy use department-wide The Navy will cut their petroleum use in their non-tactical fleet (commercial vehicle fleet) by 50 percent by 2015. By 2020, half of the energy used by the Navy will come from alternative sources and half of the installations will be net zero energy. And to ensure that these goals are met, Mabus just launched a new new dedicated energy masters degree program. “Through the the masters program and the executive energy series, [Naval Postgraduate School] will ensure that energy is fully integrated,” said Mabus. “As a result, NPS students will guide the Navy and the nation toward a better, more secure energy future.” Is alternative energy reliable enough for our national defense? Tom Hicks advised me that the U.S. has a 270 MW geothermal plant in California that we have been operating for 20 some odd years. “Most people don’t know about it,” Hicks told me. “It’s enough power to power the base in China Lake, but also to provide 200 MW of power to the grid,” he said. National Security The spike in oil prices during the Arab Spring sank the average American’s budget, but it had a similar affect on our defense budgets (and any business involved in transportation as well). Based on June oil prices, fuel costs will increase by a billion dollars to the Navy this year, according to Hicks. “That impacts our flying hours, our steaming hours, our ability to sail our ships and to fly our planes,” Hicks warns — making energy independence a national security priority. Creating Jobs One of the most important pieces of going green is energy efficiency — something old buildings are very deficient in. The Better Buildings Initiative , a policy that U.S. Department of Energy Secretary Steven Chu announced at CGI America in June of this year, will upgrade the energy efficiency in up to 300 million square feet of office space — from military housing to college campuses. According to President Obama, who spoke at CGI in New York City on Wednesday, Sept. 21, this will “create jobs, while saving billions for businesses in energy bills, and cut down on our pollution.” It also trains out-of-work constructions workers — who make up one of the largest unemployed industries in the U.S., at 11.3 percent in August of 2011 — to have new skills that are valuable for 21st century construction jobs. Cutting Costs In his speech at CGI, Obama also told the crowd, “The CEO of Southwest Airlines estimates that if we put in the new generation of GPS air traffic control, we would save 15 percent in fuel costs. Think about what that would do overall for the cost of the ticket… Maybe they could start giving out peanuts again.” Indeed the cost of fuel is not peanuts to the airline industry. Fuel costs were over $3.6 billion in 2010 for Southwest Airlines . Energy Independence Companies, countries and individuals alike suffer when the price of energy is the most expensive budget line item — and can be increased significantly at the drop of a hat by countries that are not friendly to American interests. Innovation, research and development and even failures are all part of the solutions needed for the many challenges that America, and the world, face today. With trillions being spent worldwide on solar, wind, geothermal, biofuels, electric vehicles and other clean energy products, continuing the U.S. commitment to R&D, private enterprise, public policy and consumer incentives is an investment in economic growth, national security, the security of our armed forces and a better world. There are many successful clean energy projects and companies that are as news and water-cooler worthy as the one green company that failed. Natalie Pace is the author of “You Vs. Wall Street” and the founder and CEO of the Women’s Investment Network, LLC. She is a blogger on HuffingtonPost.com and a repeat guest on national television and radio shows such as “Good Morning America,” Fox News, CNBC, ABC-TV, Forbes.com, NPR and more. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace . For more information please visit NataliePace.com .

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Has The Netflix Star Faded?

September 20, 2011

NEW YORK — Netflix is trying to boost business by chopping its services into two separate parts. Unfortunately for investors, the company’s stock price is what’s really been cleaved. The company that once seemed like it could do no wrong has seen its stock lose half its value in the last two months. Netflix tumbled another 7.4 percent to $143.75 on Monday, on the same day that chief executive Reed Hastings sent an email to Netflix customers, announcing that the DVD-by-mail business that defined the company for much of its history will become a separate, renamed service called Qwikster. Customers who subscribe to both streaming and DVDs will soon see two separate charges on their credit card statements and have to log on to two different websites. It’s a hard landing for a company that made many investors rich while remaking the way that households watch movies. It was only ten months ago that Netflix’s success prompted Standard and Poor’s to add the company to its S&P 500 index, a broad measure of the stock market that is the basis for most U.S. mutual funds. Since then, Netflix shares have dropped 26 percent. Some analysts now think the stock’s best days are behind it, beset by increased competition and its recent corporate blunders. “Clearly the company is not going to grow at the rate that it has in the past few years,” said Michael Corty, an analyst at Morningstar who covers Netflix. Two years ago, the company traded at around $45 a share. Its subscriber base was swelling at a rate of 25 percent a year as customers were drawn by the value of rental plans that included no late fees for DVDs and unlimited streaming of movies and television shows. The company was so successful at adding new customers that some analysts predicted it wouldn’t be long until consumers cut their cable cords and relied on Netflix alone for content. Rising profits and a booming subscriber base helped lift Netflix’s stock price 219 percent last year to $175.70. As recently as February, investors were willing to pay $93 for $1 in the company’s profits. The broad S&P 500 index, meanwhile, traded at a price to earnings ratio of 16. But the last two months have upended those rosy growth scenarios. Since announcing higher prices on July 12, the company’s stock has plunged 51 percent from a high of $298.73. Netflix announced on September 15 that its subscribers will fall to 24 million U.S. households at the end of the month – only the second time in the company’s history that its subscriber base has dropped from one quarter to the next. And the company faces increased competition from Amazon, Apple and a host of others, which will likely drive its costs higher. “Netflix was basically a monopoly in the streaming business until about six months ago, and the effect was that content providers were underpricing their products,” said Charlie Wolf, an analyst who covers the company at Needham. On February 22nd, Amazon announced that it would stream 5,000 movies and television shows at no additional charge to customers who signed up for a Prime membership, which costs $79 a year. Wolf said that increased competition among streaming companies meant that the balance of power was tipping back to the movie studios and networks that produce entertainment. These companies can now play Netflix and its competitors off of one another, creating higher profits for themselves and forcing streaming companies to raise their prices or cut into their margins. Netflix recently lost its license to stream popular movies from Starz Entertainment over a dispute over fees. Streaming isn’t the only aspect of Netflix’s business that is coming under fire. Its traditional DVD business is also being challenged by Redbox, a division of Coinstar Inc. that rents DVDs at 33,330 kiosks in supermarkets and other retailers. Coinstar’s stock is up 6 percent over the last six months, compared with a 32 percent drop for Netflix. Wolf thinks Netflix shares should trade at a fair value of $130 _a 10 percent drop from Monday’s closing price. Other analysts believe Netflix is bungling Qwikster’s rollout. “Netflix has built such a strong brand name, so to switch the name of the website now doesn’t make a lot of sense to me,” said Corty, the analyst at Morningstar. He said any marketing or executive missteps could come back to hurt the company as its business faces more competition and potentially higher costs. Corty said, the new emphasis on streaming means Netflix will have to constantly renegotiate its licenses to stream movies, giving the companies that produce entertainment more leverage. Corty says that he wouldn’t recommend buying Netflix until its shares fall to $90 _a 37 percent drop from its current price. But even amid the gloom about Netflix’s future direction, there are some investors sitting on gains and holding onto the stock because they assume more are to come. Jeanie Wyatt, the chief investment officer for South Texas Money Management, a firm with $1.9 billion in assets under management, began buying Netflix when it was trading at $120. Her investment was once up 150 percent. Now it’s up just 25 percent. Even so, she attributed the company’s recent tumbles to growing pains. She believes the company will continue to perform better than the overall stock market over the next several years, in part because Qwikster will also rent video games by mail – a first for the company. “I don’t think that this is a growth story that’s broken,” she said.

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Companies With The Most Valuable Brands

September 10, 2011

At the same time the U.S. economy teeters on the edge of recession, public perception of even the most well-known brands is deteriorating. The combined value of the world’s 100 most valuable brands has already fallen by 2.4 percent since January, according to a yearly list made by Brand-Finance plc , a brand valuation consulting firm. Among all brands, it’s the banks that experienced particularly hard hits, especially Bank of America and Wells Fargo, the report finds. Not so for tech companies. Those brands remain strong, and none more than Apple and Google. An August poll by Gallup found that Americans better regard the computer industry than any other sector of the economy. Apple had a particularly strong year, leapfrogging Microsoft in brand value and putting itself within striking distance of Google, whose brand currently has the highest value of any company. And while Google continues to enjoy its status as the U.S. company with the best reputation — that also according to a survey last May by Harris Interactive — Apple is doing just fine for themselves. In August, the company that brought the iPhone to the world became the most valuable U.S. company by market cap. Here are the 10 global companies with the most valuable brands, according to Brand-Finance Global 100:

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HP Exec: PC Unit Spinoff ‘Best Value’

September 5, 2011

By Terril Yue Jones BEIJING (Reuters) – A spin-off of Hewlett-Packard Co’s PC unit would be the best value for shareholders, according to the head of its PC division, who added that tablet computing was “relevant” to the future market for any spinoff. HP stunned markets two weeks ago, when it announced it may shed its PC business — the world’s largest after the $25 billion acquisition of Compaq in 2002 — as part of a wrenching series of moves away from the consumer market. Those included killing off the TouchPad tablet computer in the face of stiff competition from Apple Inc.. Now, the board of the largest U.S. technology company by revenue is expected to decide before the end of the year whether to hive off its PC arm — which began selling the TouchPad in July — into a separate company, considered the best option for shareholders. Personal Systems Group head Todd Bradley told Reuters in an interview he intends to lead any standalone company created, and expects it to be a full-fledged computer maker. Asked if there could be a tablet in the future of the separated company, Bradley responded: “Sure, of course. Tablet computing is a segment of the market that’s relevant, absolutely.” He said a spinoff of the Personal Systems Group will bring the “best value” to HP shareholders for taxation and other reasons. “My intention would be to lead it through this transaction … and if it’s a standalone public company, to lead that.” Selling the PC division to a rival such as Taiwan’s Acer Inc, which acquired computer maker Gateway in 2007, or to China’s Lenovo Group Ltd, which bought IBM’s PC division in 2004, is not a desirable alternative, Bradley said. “I would just say that the numbers don’t support that that strategy works,” he said, citing Acer reporting its first-ever quarterly loss last week. HP has struggled in the PC market — a high-revenue but low-margin business — as popular devices such as Apple’s iPad lure consumers away. Bradley is on a trip to China, Taiwan and South Korea to meet with employees, suppliers, government officials and media to convince them that HP’s PC business will remain robust and committed to Asian markets. “China’s obviously a critically important market for HP as well as PSG,” he said. SUPPLIERS, DON’T FRET Bradley said HP will increase investments in Shanghai, and over the next three years expand its Shanghai manufacturing base, consolidate six employee sites into one campus, and make Shanghai a regional headquarters in China for the PSG. “Regardless of what happens, we’re the largest PC company in the world. We need everybody energized, and while this isn’t business as usual, we need people to go out and sell products every day,” Bradley said. Suppliers to HP PCs will remain largely intact, although the company may renegotiate and redefine the relationships. “Unwinding the integration that’s taken place within HP will be enormous amounts of work and effort, justified by the return we think we’ll be able to provide to our shareholders.” Nevertheless, he said, “we will be one of, if not the largest, customers of all of our major suppliers, be it Samsung to LG to Microsoft to Intel.” The Palo Alto, California-based company is now exploring options for its WebOS software, which it acquired through the acquisition of Palm, of which Bradley is a former chief executive. Bradley has said that a number of companies had expressed interest in possibly using WebOS as an operating system, but he gave no further details on Tuesday, saying that he is not in China to announce or even negotiate anything regarding WebOS. (This August 30 story was corrected to make clear in the headline and text that the HP executive did not say the TouchPad tablet would be resurrected but said a tablet could be an option for a spin-off company) (Editing by Anshuman Daga, Matt Driskill, Edwin Chan and Matthew Lewis) Copyright 2011 Thomson Reuters. Click for Restrictions

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Watch: WikiLeaks Spills Apple’s Plan to Fight Chinese Counterfeits

September 1, 2011

Whistleblowing website Wikileaks has published a classified U.S. diplomatic cable, detailing Apple’s attempts to crack down on Chinese counterfeits of the corporation’s products. The Mac Observer reports that Apple have hired the team who were highly successful in helping pharmaceutical giant Pfizer combat the proliferation of counterfeit Viagra-style drugs. However, according to ZD net, Chinese officials are reluctant to tackle the infringement of the iconic computer company’s products. One highlight [of a report] shows that Beijing “refused to investigate” a manufacturing plant of fake Apple products because it would “threaten local jobs”, adding that any raids on a imitation Apple store could drive away shoppers from a local mall. The memo is of special interest at present because of the recent escalation of bootleg Apple products in China. As HuffPost Tech reported back in July, entire counterfeit Apple stores are springing up in China.

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Apple Accused Of Environmental Violations

August 31, 2011

By Michael Martina BEIJING (Reuters) – Chinese environmental groups accused Apple Inc of turning a blind eye as its suppliers pollute the country, the latest criticism of the technology company’s environmental record. Toxic discharges from “suspected Apple suppliers” have been encroaching on local communities and environments, a coalition of environmental organizations said on Wednesday in a 46-page report alleging efforts to conceal pollution. Widespread environmental degradation has accompanied China’s breakneck economic growth, and the government has been criticized for failing to take steps to curb pollution. “The large volume of discharge in Apple’s supply chain greatly endangers the public’s health and safety,” said the report, issued on the website of the Beijing-based Institute of Public and Environmental Affairs (www.ipe.org.cn). The report alleges that 27 suspected Apple suppliers had severe pollution problems, from toxic gases to heavy metal sludge. In one case, the report said, a nearby village experienced a “phenomenal rise in cases of cancer.” Apple has decided to “take advantage of loopholes” in developing countries’ environmental management systems to “grab super profits,” it said. Apple does not disclose who its suppliers are. The environmental groups said public documents and five months of research and field investigation led to the findings in the report. “A large number of IT supplier violation records have already been publicized; however, Apple chooses not to face such information and continues to use these companies as suppliers. This can only be seen as a deliberate refusal of responsibility,” the report said. This is not the first time Apple has been targeted for environmental infractions and its secretive supply chain management in Chinese factories, where it assembles most of its products. In January, several of the same non-governmental organizations issued a report alleging woeful environmental records for the iPad and iPhone maker’s China-based contract manufacturers. In February, workers at a Taiwanese-owned factory in eastern China making touch screens on contract for Apple aired their grievances over a chemical poisoning after using N-Hexane, a toxic solvent. Apple says it maintains a rigorous auditing regime and all its suppliers are monitored and investigated regularly. “Apple is committed to driving the highest standards of social responsibility throughout our supply base,” Apple spokeswoman Carolyn Wu told Reuters. “We require that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made,” she said. Apple is not alone in drawing criticism from environmental groups. Some of the world’s leading brands rely on Chinese suppliers that pollute the country’s environment with chemicals banned in Europe and elsewhere. Many Western multinationals — including toymaker Mattel Inc, which suffered a toxic lead paint scandal in 2007 — have struggled to regulate product quality across scores of suppliers in knotted Chinese supply chains. Environmental degradation has emerged as one of the most potent fault lines in Chinese society. Beijing has repeatedly promised to clean up its stressed environment. But it often fails to match that rhetoric with the resources and political will to enforce its mandates, as local officials put growth, revenue and jobs ahead of environmental protection. (Reporting by Michael Martina; editing by John Wallace) Copyright 2011 Thomson Reuters. Click for Restrictions

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American Businesses Need More Of Steve Jobs’ Courage

August 31, 2011

Of all that Steve Jobs’ achievement has taught us, the importance of courage is especially relevant now.

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Dan Solin: What Apple and Indonesia Can Teach You About Investing

August 31, 2011

You wouldn’t think Apple and Indonesia have much in common. On the surface, they don’t, but they can still teach you a lot about investing. Let’s start with Apple. Apple made the news recently with two major events. It is locked in a battle with Exxon over which is the most valuable company by market capitalization — a remarkable turnaround. Apple has a market value of over $344 billion. Then Steve Jobs announced his resignation at Chief Operating Officer for health related reasons. According to a thoughtful blog by Weston Wellington of Dimensional Fund Advisors (not available online), it was not so long ago that the financial media was trashing Apple. In February 14, 2005, Robert Barker, in an article in BusinessWeek stated “…Apple doesn’t tempt me…” I wonder what did. Maybe Lehman or Bear Stearns! Steven Gandel weighed in with an article in Money on March 24, 2004. He quoted Transamerica portfolio manager Chris Bonavico who opined that Apple stock is “…crap from an investor standpoint.” Many analysts credit the remarkable sales of its Apples Stores as the key to Apple’s success. In a quote attributed to David Goldstein, Channel Marketing Corp, which appeared in an article in BusinessWeek on May 21, 2001, Mr. Goldstein gave Apple “two years before they’re turning out the lights on a very painful and expensive mistake.” What can you learn from these comments about Apple stock? Read the financial media if you find it entertaining. It’s useless (and potentially harmful) as a source of reliable financial advice. What about Indonesia? The financial media was preoccupied with the downgrade by Standard & Poor’s of the credit rating of the U.S, which lowered its rating from AAA status to AA plus. The new rating places the U.S. below the United Kingdom, Canada and even the Isle of Man. Many investors viewed the lower rating with alarm and considered it a precursor of low stock returns for decades to come. The data tells a much different story, and may indicate there is no better time to invest in U.S. stocks and bonds. In another blog, Wellington notes that Standard & Poor’s rated the credit of Indonesia a “B” in July, 2001, which placed it in the “junk” category. Over the past decade, its credit rating has never risen to investment grade. Investors in the Jakarta Composite have earned a total return of a whopping 29% per year over the last decade, ending June 30, 2011. According to Wellington, “If the Dow Jones Average had kept pace with Indonesian stocks over the past decade, it would be over 104,000 today.” Here’s the lesson to be learned from Indonesia: A low (or reduced) credit rating on sovereign debt does not necessarily correlate to lower stock market returns. This is the opposite of what many investors and financial talking heads believe. Most investors get their financial information from the financial media or brokers. As Dr. Phil would say: How is that working for you? Dan Solin is a Senior Vice President of Index Funds Advisors (ifa.com). He is the author of the New York Times best sellers The Smartest Investment Book You’ll Ever Read , The Smartest 401(k) Book You’ll Ever Read , and The Smartest Retirement Book You’ll Ever Read . His new book, The Smartest Portfolio You’ll Ever Own , will be released in September, 2011. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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