Weekly Digest
Weekly Digest Issue No. 455
05-03-2009
by Deirdre McArdle
R&D investment brings hope | Rocky road ahead for Eircom? | Yahoo and Sony 'do the shuffle' | MySpace trio jump ship | Smartphone sales on the up
R&D investment brings hope
ENN suggested a couple of weeks ago that things could begin to brighten up on the jobs front and that foreign direct investment would again flow into Ireland. While we're not suggesting that the turnaround has come already, last week a major announcement from Intel indicated that things may just start going in that direction. The chip giant announced its plans to plough EUR50 million into a major expansion of its research and development facility in the Shannon Free Zone in County Clare. The firm also announced that the creation of 134 new jobs at the facility is also on the cards, bringing the total Intel workforce in the region to around 300. The investment will focus on two separate R&D projects: a hardware project that will deliver a new chip with a significantly improved design for embedded applications, and a software project aimed at extending Intel QuickAssist Technology. It is these types of investments and jobs that the Government is so keen to encourage as Ireland takes steps to transform itself into a so-called "smart economy", according to Tanaiste Mary Coughlan, who was commenting on a new Business Expenditure on Research and Development (BERD) report, which highlighted an increase in R&D spending by companies in Ireland over the past two years. The report revealed that R&D spend reached EUR1.60 billion in 2007 and an estimated EUR1.68 billion in 2008, and that just shy of 14,000 people were employed in R&D roles across the business sector in 2007.
Rocky road ahead for Eircom?
It's been a real mixed bag of a week for Eircom, which saw its Australian owner Babcock & Brown Capital (BCM) cut the value of its investment in the Irish telecoms firm by more than EUR700 million, acknowledging that it overpaid for Eircom when it shelled out EUR2.36 billion for the operator less than three years ago. On Friday, the Irish firm announced its financial results for the six months to end of 2008, which indicated that Eircom is holding steady in the current turbulent market. Earnings dipped slightly by 4 percent year-on-year to EUR333 million, while revenue stayed at around the EUR1 billion mark for the period. While fixed line phone customers appear to be leaving the Irish telco in their droves -- 41,000 during the latter half of 2008 -- Eircom is continuing to add broadband customers to its fold: some 46,000 signed up during the six-month period. Meanwhile, the firm's mobile subsidiary Meteor is motoring ahead, clocking up a 7 percent rise in revenue and a 6 percent jump in earnings. Also on Friday, Eircom announced that it has appointed an interim CEO while it continues to look for a permanent replacement for departed head Rex Comb. Cathal Magee, managing director of Eircom Retail, has assumed the role of Acting CEO. Magee joined Eircom in 1995 after being headhunted by the firm and has been head of Retail since 2002. As it drives through an increasingly rough landscape, for Eircom's part it must be comforting to know there are experienced hands on the wheel.
Yahoo and Sony 'do the shuffle'
It's that time of the year when a bit of spring cleaning is in order. Two high-profile CEOs certainly grasped the duster with a firm hand this week and got rid of the cobwebs. Carol Bartz, Yahoo's new CEO, unveiled a major management re-organisation as she tries to streamline the structure of the firm. Bartz has split Yahoo into two regions -- North America, led by former US chief Hilary Schneider, and International, whose chief has yet to be named. As she tries to simplify things at Yahoo, Bartz announced that the firm's various technology and product groups will be combined into one entity led by Chief Technology Officer Ari Balogh. Yahoo's business and advertising efforts for mobile will be led by David Ko, while Elisa Steele, formerly of NetApp Inc, will be chief marketing officer. Meanwhile, consumer electronics giant Sony also donned its rubber gloves this week. Chief Executive Sir Howard Stringer is to take on the additional post of president and assume responsibility for Sony's key electronics division, while Ryoji Chubachi, currently president and head of the consumer electronics business, will become vice-chairman in charge of safety, quality and environmental issues. Kazuo Hirai, currently president and chief executive of Sony Computer Entertainment, will head a new network products and services group, while a new consumer products group will bring together the home audio, video and other consumer electronics units, as well as devices and components. Sony has struggled in recent quarters and is moving things around in order to try and better integrate its hardware and software operations.
MySpace trio jump ship
Social networking site MySpace could be set for some major changes in the coming months, following the news that three of its top executives are leaving the firm to start up their own new venture (nothing is yet known about the nature of the new start-up) Amit Kapur, who had been promoted to chief operating officer at the social network last year, is to step down, along with Jim Benedetto, senior vice president of engineering, and Steve Pearman, senior vice president of product strategy. Kapur has been widely credited with helping to develop and oversee the MySpace Music and MySpace Mobile services. A replacement for Kapur has yet to be officially named. Industry commentators are now pondering whether the trio's departure is reflective of MySpace's somewhat relegated position in the social networking world, as Facebook continues to steal its thunder, or simply a case of start-up fever. Add to their departure the speculation that MySpace will struggle to hold onto co-founders Chris De Wolfe and Tom Anderson when their contracts expire in October, and the social networking site could be facing a challenging future. Not too long ago it was surpassed by Facebook in the popularity stakes: Mark Zuckerberg's site has around 150 million users, while MySpace, at last count, had 130 million. As well as that, the typical Facebook user tends to be in their thirties, while MySpace attracts a younger - - some may say more fickle -- demographic. It'll be interesting to see how MySpace attacks the coming months and whether it can regain some of that lost ground. Who knows, maybe a change of management could be just what it needs.
Smartphone sales on the up
While global mobile phone shipments took a dip in the fourth quarter of 2008, down 5 percent from the year-ago quarter, with no sign of the market stabilising this year, according to Gartner, sales of smartphones have gone from strength to strength. Research from IDC reveals that 9.3 million smartphones were shipped in Western Europe in the final quarter of last year, an impressive rise of 25.9 percent from the same period in 2007. For the full year of 2008, some 32 million smartphones were shipped, representing growth of 36.1 percent over 2007. Nokia is the market leader in Western Europe, according to IDC, with BlackBerry maker Research in Motion in second place, followed by Apple. Despite its third place in the Western European smartphone market though, the iPhone got a boost this week with the news that it is the world's most popular mobile web browser. That's according to Irish firm StatCounter, which revealed that the iPhone browser accounts for 24 percent of the mobile browser market, stepping over Opera, which holds 22 percent, and Nokia with its 18 percent. Calling it a "global phenomenon", Aodhan Cullen, CEO and founder of StatCounter, said the iPhone has been consistently leading the field since mid-February.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 