Weekly Digest
Weekly Digest Issue No. 513
29-04-2010
by Deirdre McArdle
Smartphone market heats up | AOL turnaround continues
Tyndall jobs bode well for the future
It's been quite the jobs bonanza this week, particularly in Cork where University College Cork's Tyndall Institute unveiled a series of initiatives that could see over 100 new jobs being created. Last Thursday, the research facility announced it had won EUR8 million in funding in a European funding competition. The funding win will see Tyndall create 20 new high-level jobs.
On Monday it was announced that a new International Energy Research Centre (IERC) was to be established in Tyndall, following a EUR20 million government investment. The new centre will create 50 research jobs and will focus primarily on sustainable energy systems. "The IERC, based in Tyndall, will attract new researchers to Ireland developing new skill sets in integrated energy systems and by building on existing expertise will enable Ireland to develop a leadership position in clean technology research," said Professor Roger Whatmore, CEO, Tyndall.
Also on Monday, United Technologies Corporation became the first company to locate a research facility in Tyndall, as a direct result of the setting up of the IERC. UTC is to base an energy and security research centre in Tyndall, creating 37 new jobs through a EUR15 million investment.
In non-Tyndall related jobs news, the Government and Intune Networks kicked off phase 1 of the Exemplar Communications test bed last Thursday. Some EUR5 million has been invested in the first phase of this 'smart network' that will eventually be rolled out nationwide. The pair said that 80 jobs will be created during phase 1.
Smartphone market heats up
Although Nokia posted an increase in first quarter profit to EUR349 million, up from EUR122 million a year earlier, analysts and stockmarkets in Europe were disappointed with the figures, which were lower than had been expected. There's no doubt that Nokia is feeling the heat from smartphone maker rivals Apple and (BlackBerry maker) Research in Motion
On Tuesday Nokia went some way towards making its mark on the high-end segment with the release of the N8 smartphone. This is Nokia's first device to be based on new Symbian 3 software and will be released in the third quarter. It will have a 12 megapixel camera, 3.5-inch touchscreen and will retail for EUR370 (excluding subsidies and taxes). Initial reviews of the device appear mixed; however, analysts are calling it a first step for Nokia, which hasn't launched a new high-end contender since the N95 in 2006.
Despite making this first step, Nokia is still facing an uphill struggle, as the smartphone market becomes ever more competitive. Research in Motion confirmed this week that it will launch an updated version of its BlackBerry operating system later this year. The new software will support touchscreen devices and include a faster web browser, and has been described by RIM co-chief executive Mike Lazaridis as one of the biggest overhauls in years. Of course, the next iteration of the iPhone, the iPhone 4G, is due for release as early as June of this year, and, just to make things more interesting, Hewlett-Packard announced late on Wednesday that it had acquired ailing smartphone maker Palm for USD1.2 billion.
Positive tech results keep coming
This week saw another batch of positive tech sector results, with a selection of big names posting noteworthy profit increases. Microsoft, for example, reported total profit for the first quarter of USD4.01 billion, or USD0.45 a share, up an impressive 35 percent from USD2.98 billion, or USD0.33 a share, a year earlier, thanks primarily to significant sales of Windows 7. Revenue rose 5 percent to USD14.5 billion.
E-tailer Amazon turned in a great first-quarter performance with profit rising by a whopping 68 percent to USD299 million, or USD0.66 a share, from USD177 million, or USD0.41 a share, a year ago. Revenue rose 46 percent to USD7.13 billion from USD4.89 billion. Increased consumer spending was cited for the healthy numbers, and Amazon said it saw the largest sales boost in its catch-all category of electronics and general merchandise (including the Kindle), which grew by 72 percent.
Continuing the trend of solid figures from chipmakers, German firm Infineon Technologies swung to a net profit in its fiscal second quarter and raised its full-year guidance. The firm reversed a year-ago loss of EUR258 million to post a net profit of EUR79 million, while revenue rose to EUR1.04 billion from EUR669 million. The figures easily surpassed analysts' expectations of EUR65 million net profit on sales of EUR1 billion. Meanwhile, ARM saw pre-tax profits jump by 57 percent to STG37.6 million, from STG23.9 million in the year-ago quarter. Revenue rose by 19 percent to STG92.3 million. ARM cited a growing demand for smartphones, in which its chips are used, as the key reason for its good form. The firm said it saw a 50 percent year-on-year increase in shipments of ARM-based chips for mobile devices.
Finally, business software giant SAP saw its first-quarter net profit almost double to EUR387 million from EUR196 million a year earlier, slightly ahead of expectations. Software revenue for the three months rose 11 percent to EUR464 million, beating analyst expectations of EUR418 million.
These results follow on nicely from last week's bumper quarterly figures from high-profile firms like IBM, Apple and Google.
Apple vs Gizmodo: battle is on
A great big can o' worms was opened last week when technology blog Gizmodo published details of what it claimed was the next iPhone. Editors at Gizmodo said they paid USD5,000 for what they believed was a prototype of the iPhone 4G, which was accidentally left at a bar in California by an Apple software engineer and found by someone who then approached Gizmodo to sell it. After being contacted by Apple's legal department, Gizmodo said it returned the device to Apple.
Since then, however, police seized several computers, a camera and storage devices from the home of Gizmodo editor Jason Chen. Stephen Wagstaffe, the chief deputy district attorney for San Mateo County, said Apple contacted authorities and "advised us there had been a theft," which led to the search warrant and an investigation. The search and seizure has been defended by San Mateo County prosecutors, while Gizmodo parent Gawker Media and the Electronic Frontier Foundation have called the search warrant "invalid," saying it goes against journalist shield laws in California. The devices taken from Chen's house likely contain data and e-mails not relevant to the iPhone case. For now, the incident is being investigated as a theft, although Wagstaffe told CNet that prosecutors "would like to be able to look at the computer and interview everybody that they can so they can determine the extent of what's involved".
In the blue corner: Apple is notorious for its secrecy and its stance on leaks. In the red corner: industry reports suggest that Gawker publisher Nick Denton is also a tough cookie. It looks like this story could run and run.
AOL turnaround continues
Unsettled internet portal AOL has posted a quarterly profit of USD34.7 million, or USD0.32 a share, a 58 percent drop on the USD82.7 million, or USD0.78 a share, reported a year earlier. Revenue also fell, by 23 percent, to USD664.3 million. The quarter marked AOL's second batch of results since it spun off from Time Warner, and the company has been trying to turn around its business model from an internet portal to an ad-supported media business. It's not been an easy re-vamp for AOL: during the quarter subscription revenue fell 28 percent as its advertising revenue dropped by 19 percent. However, the firm did significantly manage to cut costs during the quarter with operating expenses decreasing by USD139 million. This reduction comes primarily as a result of job cuts and exiting what AOL called "unprofitable international markets and product offerings".
One of those product offerings it managed to shed during the quarter was ICQ. AOL had been looking for a buyer for its instant messaging client in recent months, and on Wednesday it announced that Russian internet holding company Digital Sky Technologies had bought ICQ for USD187.5 million, which is less than half the USD400 million AOL paid for the company in 1998. Digital Sky Technologies came on the radar in May 2009 when it bought a 1.96 percent stake in social network Facebook for USD200 million. Of course AOL is still mulling over what it will do with its own social network Bebo; in May it is poised to announce whether it will sell it or shut it down. AOL bought Bebo for nearly USD1 billion two years ago.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 