Weekly Digest
Weekly Digest Issue No. 494
03-12-2009
by Deirdre McArdle
Newspaper industry makes the headlines | Chip sales show signs of recovery
Ireland to play key role in European R&D
The Government’s 'Smart Economy' dreams got a significant boost this week with the news that Ireland's Maire Geoghegan Quinn has secured the Research and Innovation portfolio in EU President Jose Manuel Barroso's incoming cabinet. Barroso has described the Research and Innovation portfolio as central in his efforts to revive the European economy. According to the Taoiseach Brian Cowen, Barroso stressed at a recent meeting that as we move towards a more competitive and sustainable economy "a top priority would be new sources of growth based on the famous knowledge triangle of research, education and innovation". Geoghegan Quinn’s appointment means Ireland will have a crucial role to play in the future growth of Europe, according to IBEC Director of International Affairs Brendan Butler. He said it will ensure that Ireland will be central in influencing "both current and future research priorities and funding for the EU". The Research and Innovation portfolio includes the European Union's important Research Framework Programme, which has a budget of around EUR50 billion over seven years (2007 – 2013). It will also cover the main EU research institutes and structures, including The Joint Research Centre (JRC), The European Research Council (ERC), The Research Executive Agency (REA) and The European Research Council Executive Agency (ERCEA). Europe's focus on research mirrors the Government’s drive to build a Smart Economy here and it's broadly accepted that science and technology will be "key drivers" for job creation in Ireland, according to Microsoft Ireland MD Paul Rellis, who said Geoghegan Quinn's appointment was welcome news from Ireland's perspective. Industry and politicians were united in their positive reactions to the appointment, with Chambers Ireland, Science Foundation Ireland, the National Digital Research Centre and Opposition parties all voicing their approval of the news.
Mobile market poised for recovery in 2010
It looks like it could be an interesting year ahead for the mobile market, which has over the past year felt the effects of the cut-back in consumer spending. Nokia has forecast that global sales of mobile phones will grow by about 10 percent in volume next year, a dramatic improvement on the expected decline in shipment volume of 7 percent this year. Analysts' estimates are markedly lower than Nokia's forecast at 8.6 percent growth. The Finnish firm has said its share of the global market will remain flat in 2010. Nokia ended the third quarter with market share of 37.3 percent, its lowest rate since the first quarter of 2007. Meanwhile, closest rival Samsung, which is nipping at its heels with 20.7 percent market share, said this week that it's on target to beat its 2009 sales forecast of shipping 200 million handsets. Samsung's confidence stems from a strong performance from its touchscreen handsets; so far this year it's shipped 50 million touchscreen phones, compared to this stage last year when it had sold only 10 million such devices. And it looks like the mobile phone market could get even more competitive next year, with Chinese PC maker Lenovo poised to make a re-entry. The PC giant is to buy back the mobile handset maker it founded back in 2002, Lenovo Mobile Communication Technology. Lenovo CEO Yang Yuanqing said the company plans to launch mobile handsets under the Lenovo brand soon.
Nokia accuses LCD makers of price-fixing
In other news of Nokia, the Finnish mobile giant has filed a complaint against a number of Asian manufacturers of LCD (liquid crystal display) screens, saying they colluded in fixing prices on displays. Nokia alleges that the "illegal conspiracy raised the price of LCDs above the price that would have prevailed in a competitive market". Samsung Electronics, LG Display, Sharp, Hitachi Displays and Chunghwa Picture Tubes were among the defendants named in the suit, which was filed in the US. The company also filed a similar complaint in the UK. According to Nokia, the suits follow government investigations in the US and Europe. A spokesman for the Finnish firm declined to say how much Nokia was seeking in damages, but industry analysts are suggesting that the amount could be substantial given that the price-fixing is alleged to have gone on for around ten years, between January 1996 and December 2006. Nokia purchased LCDs from the companies and then incorporated them into its mobile handsets. In a statement, Nokia said it has filed suits to "recover overcharges it paid as a result of cartel activities", which are currently under governmental investigation. "When certain companies and management employees have already admitted participating in or are indicted for global price-fixing cartels involving components that Nokia has purchased, it is reasonable for Nokia to seek redress," the company said. Last year, LG Display, Chunghwa Picture Tubes and Sharp all agreed to plead guilty to price-fixing in the US, paying a combined USD585 million in fines, while Hitachi also pleaded guilty in the case earlier this year. None of the companies named in the suit have commented on the charges brought by Nokia.
Newspaper industry makes the headlines
The future of the newspaper industry was a hot topic at a US Federal Trade Commission meeting this week. The agency said it was going to investigate whether it should step in and help out news organisations who may be struggling as more and more consumers turn to the internet for news, and the corresponding drop in advertising revenues continues to take its toll. The FTC said a number of options are being assessed, including introducing changes to the way the industry is regulated, making news-gathering companies exempt from antitrust laws, granting them special tax treatment, and making changes to copyright laws. Speaking at the event News Corp chairman Rupert Murdoch suggested that the newspaper industry itself needs to be more proactive in convincing consumers that good quality journalism is worth paying for. Murdoch has been outspoken about sites such as Google News and last month hinted that News Corp may block Google from searching its news sites. In response to increasing criticism from news organisations, who say that aggregators like Google News are generating ad revenue on the back of their news, Google this week said it will be introducing some changes. It announced that it will allow publishers to set a daily limit on the number of articles readers can view for free through its search engine. Google has also made it easier for news organisations to remove their content from Google News but keep it accessible through Google.com. News organisations will be able to add a piece of code to their website to automatically block their content from Google News, instead of filling out an online form. Meanwhile, on the other side of the Atlantic, Johnston Press, which owns more than 300 local newspapers in Britain, has begun charging for some of its online content. The publisher has put paywalls around the websites of six of its titles, making it the first regional publisher to charge for online news. The move is part of a three-month trial to see if users are willing to pay for online content. Look out for more on this topic in our Year in Review articles over the Christmas period.
Chip sales show signs of recovery
In a welcome sign of recovery in the tech sector, global chip sales increased sequentially by 5.1 percent in October, signalling the eighth month of gains in a row. Worldwide sales of semiconductors rose to USD21.7 billion in October, up from September when sales were USD20.6 billion. The October 2009 figure is 3.5 percent down on last year when sales were USD22.5 billion; however, it is the smallest year-on-year decline of 2009. Breaking the figures down regionally, Europe had the best sequential growth rate, with sales increasing by 7.5 percent since September to USD2.81 billion. The US saw growth jumping 5.9 percent while the Asia Pacific region grew by 4.9 percent and Japan by 3.3 percent. Over the year, the figures tell a different story: chip sales in Europe fell by 17.8 percent, while Japan too saw a significant drop of 11.6 percent. Asia Pacific had a better performance with sales over the 12 months to October 2009 dipping by just 1.3 percent. The US was the star performer over the year, however, recording growth of 14.1 percent over the year. The Semiconductor Industry Association, which compiled the figures, welcomed the results, with president George Scalise suggesting they reflect "the improved economic conditions in our world market."
Caped Koala Studios has built a virtual world for kids, combining education and social networking 