Weekly Digest
Weekly Digest Issue No. 475
23-07-2009
by Deirdre McArdle
BT and Voda in customer transfer deal | Apple serves up tasty results
Government gets 'smart'...
The Government took a giant leap into the 'smart economy' on Tuesday as it outlined its 'digital and clean technology' strategy. In a report entitled "Technology Actions to Support the Smart Economy", the Government identified six new initiatives that it hopes will boost Ireland's global standing in the hi-tech/clean-tech sectors. Overall, the plan aims to create as many as 30,000 jobs, both direct and indirect, in the next 10 years. The grand plan includes the building of an Exemplar Smart Network, the contract for which was won by Irish firm Intune. The firm's programmable fibre optic platform will form the foundation for creating a next generation, smart and green communications infrastructure for Ireland. Some 350 jobs will be created by Intune as a result of the contract win, with 50 being created immediately and 300 coming on board over the next three years. Also on the cards is the positioning of Ireland as a centre for energy efficient data centres. By prioritising the development of green data centres, the Government aims to create up to 10,000 high-value jobs over the next decade. Keeping with the green theme, the strategy also includes the rollout of a smart electricity network that allows for a two-way flow of electricity, which will facilitate micro-generators, smart meters and other energy efficiency measures. In 2010 the Government also plans to pilot WorkFlow, a concept that uses web-enabled mobile traffic sensors and communication tools to reduce congestion and lower carbon emissions. The system aims to help commuters identify the best times to travel to work. In the mould of the International Financial Services Centre (IFSC), the Government aims to create the International Content Services Centre, which will focus on digital creative arts and next-generation communications technology as well as legal and other professional services. Finally, a Marine Research, Test and Demonstration Platform is to be established in Galway Bay. It will link surface and underwater sensors and networks to enable environmental research. While outlining the six-pronged plan Communications Minister Eamon Ryan proclaimed: "The series of innovations in Government policy today will make the smart economy a reality."
...But job losses dim the hype
While the Government was trumpeting the prospect of these new high-tech jobs, chip giant Intel was making an announcement of its own. The firm, which employs 4,500 people in Leixlip, Kildare, announced on Tuesday it would be shutting down its Fab-14 with the loss of 294 jobs. Intel blamed the decision on a slowing off in demand for the 'older' products that are produced in the facility, but reassured workers that jobs in its newer Fab-24 units would not be affected. The losses come on the back of 200 voluntary redundancies at Intel earlier this year. Over the coming weeks, the firm will engage in a consultation process with staff to decide which workers will be let go. Intel confirmed that these employees would receive the same severance package that was on offer to those who chose voluntary redundancy earlier this year. Just last week Intel posted better-than-expected second quarter results. Elsewhere, on Wednesday, 'supermaterials' manufacturing firm Element 6 announced it was to close its manufacturing and distribution activities at its Shannon operations with the loss of around 370 jobs. The firm produces synthetic diamond, which has applications in areas such as consumer electronics, sensors, thermal management and acoustics. The Element 6 decision is a further blow to the mid-west region, where approximately 2,000 manufacturing jobs were lost at Dell earlier this year.
BT and Voda in customer transfer deal
Two of the biggest movers in Ireland's communications market struck an interesting deal this week with the news that BT Ireland is to transfer its consumer and small business customers to Vodafone, and will also provide wholesale network services to underpin Vodafone's business over a seven-year period. In all, 84,000 of BT Ireland's domestic customers and 3,000 of its small business clients will now receive their fixed-line services from Vodafone. The deal means Vodafone will have a total of 170,000 fixed-line customers and a 15 percent market share, positioning it as Ireland's second largest fixed-line broadband provider, after Eircom, as well as being the country's largest mobile operator. So, what's in it for BT? The telco says it now plans to focus all its attention on providing networked IT and telecoms services to large businesses and the public sector. It's had some success in the area, recently winning the contract to provide the emergency call answering service in Ireland. BT says it will also plough significant funds into building an "advanced network infrastructure" in Ireland, boosting broadband speeds. The telco said it will develop a platform for the delivery of broadband speeds up to 24Mbps to approximately two-thirds of Ireland's available broadband lines. It will do this by unbundling up to 58 additional exchanges. To date, it has unbundled 22 exchanges throughout the country. BT Ireland CEO Chris Clark said of the deal: "This is a very positive chapter in Ireland's telecoms history and will open up the market to greater competition and choice." According to a joint statement, the gross value of the assets being transferred from BT to Vodafone is EUR4.8 million. The deal is subject to approval from the Competition Authority.
Apple serves up tasty results
iPhone maker Apple posted an impressive set of financial results this week, easing past analysts' estimates to report fiscal third quarter profits of USD1.23 billion, or USD1.35 a share, compared with USD1.07 billion, or USD1.19, last year. Revenue grew to USD8.34 billion, up from USD7.46 billion in the year-ago quarter. iPhone sales of 5.2 million during the quarter, representing 626 percent growth from the year-ago period, was a key factor in the firm's stellar performance. Apple unveiled its latest incarnation of the widely popular iPhone on 19 June; over 1 million iPhone 3G S handsets were sold in the three days following the launch. Also during the quarter, Apple sold 2.6 million Macs, 4 percent up on last year's tally; in June, the firm cut Mac prices, a move commentators believe had a positive effect on sales. Despite shipping a massive 10.2 million iPods during the three-month period, the figure was down 7 percent from 2008. Looking ahead to the next quarter, Apple projected earnings per share of between USD1.18 to USD1.23 on revenue of USD8.7 billion to USD8.9 billion, although analysts highlighted that Apple is notoriously conservative with its forward projections. Wall Street reacted positively to Apple's figures, with shares in the firm jumping 4.5 percent in Wednesday trading.
Yahoo aims to boost brand image
As talk of a search and advertising link-up with Microsoft gathers renewed momentum, Yahoo posted second quarter results that were broadly in line with analyst expectations. While revenue for the quarter dropped 13 percent year-on-year to USD1.57 billion, thanks mainly to the fall-off in online advertising revenues, profits jumped 8 percent to USD141 million, or USD0.10 per share, meeting Wall Street estimates. Yahoo's third-quarter revenue projections of between USD1.45 billion and USD1.55 billion were below some analysts' expectations, which has prompted concerns about the expense of trying to revive the flagging Yahoo brand. The first step in revitalising the brand was made on Tuesday when Yahoo unveiled a revamped homepage layout. The new-look homepage, which is available only in the US for now, includes a customisable section called 'My Favourites', and allows users to link to popular sites such as Facebook, Twitter and eBay. Yahoo already offers a certain level of customisation with its MyYahoo page, which is similar to Google's iGoogle effort. This latest move takes customisation a step further, and CEO Carol Bartz calls the redesign the "most significant change in our home page since the company's inception"; however, industry commentators have not been blown away by the revamp, saying it lacks the full personalisation they were hoping for.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 