Weekly Digest
Weekly Digest Issue No. 516
20-05-2010
by Deirdre McArdle
Mixed week for tech jobs | Google facing privacy probes
Mixed week for tech jobs
It's been a mixed week on the tech jobs front. Fears are growing for 85 jobs at Boston Scientific's Galway plant. While the medical device firm has not officially commented, reports are circulating that the job losses could affect 85 skilled employees including engineers, technicians and supervisors. Another multinational, Hewlett-Packard, announced this week it was outsourcing 140 of its Leixlip-based staff to Galway electronics firm Celestica. Affected employees will remain at HP's Kildare campus, and HP said there should be no immediate change to their terms and conditions of employment. A report in the Irish Independent suggested, however, that permanent staff who were not unionised claim they have only been guaranteed one year's work.
On a more positive note, two major Cork employers -- Apple and McAfee -- revealed significant recruitment plans for the coming year. Apple, which this week broke through the 2,000 jobs mark at its Holyhill, Cork facility, said it aims to create 300 new jobs in the next 12 months. Industry sources believe the majority of the new jobs will focus on the production of the Mac Pro. Separately, security firm McAfee hinted at plans to add 150 jobs at its EMEA headquarters in Mahon, Cork. The firm recently unveiled 120 new jobs in Cork, where it currently employs 280 people. McAfee's Cork facility was custom-built with a capacity for 450 staff.
Also this week, two Irish security firms announced expansion plans. Following an investment of EUR1.05 million to build a new network operations centre at its Dublin headquarters, Integrity Solutions said it was to create 12 new jobs. Separately, Espion opened its new Dublin base last Friday, and said it also plans to create an extra 12 jobs over the next 18 months.
On Wednesday, US security firm Webroot announced plans to establish an international headquarters in Dublin, where it aims to employ around 50 staff over the first two years of operation. The Dublin office will house teams that support Webroot's consumer and enterprise product portfolios across the EMEA and Asia Pacific regions.
And finally, on Thursday mobile operator O2 Ireland announced it is to create 100 new jobs at its Dublin headquarters. The new posts come as the operator centralises its European human resources activities in Dublin.
ARPU drops at Vodafone
Meanwhile, Vodafone Ireland reported a varied set of key performance indicators (KPIs) for its fiscal fourth quarter. The operator said its mobile customer base stood at 2.14 million at the end of March 2010, while its DSL and fixed line business had 194,000 customers. During the firm's fiscal fourth quarter it added 14,000 new mobile bill-pay customers, following on from rival O2 Ireland's announcement last week that it had recruited over 10,000 new bill-pay customers. Vodafone revealed that in the two weeks after it launched the iPhone on 25 March there were over 40,000 iPhone users on its network.
The continuing drop in average revenue per user (ARPU) hit Vodafone's figures for the quarter. Its blended ARPU dropped 7.7 percent to EUR36.10, lower than competitor O2's blended ARPU of EUR37.37. This drop in ARPU comes despite the fact that during the period Vodafone Ireland said its customers sent 22 percent more texts and 1.5 percent more voice minutes than in the previous year's quarter, a factor Vodafone Ireland strategy director Gerry Fahy puts down to price cuts.
On a group scale Vodafone has said it will return to revenue growth in the coming financial year although it will take a STG2.3 billion impairment charge in its full-year results. Revenues for the year to 31 March rose 8.4 percent to STG44.5 billion, with pre-tax profit increasing by 107 percent to STG8.6 billion as the group met its STG1 billion cost reduction targets a year ahead of schedule. Earnings before interest, tax, depreciation and amortisation rose 1.7 percent, in line with expectations.
HP sees profit boost as spending resumes
PC giant Hewlett-Packard returned to form this week, posting a 28 percent rise in profits for its second fiscal quarter. As businesses resumed their spending on IT hardware, HP reaped the benefits: profits for the quarter were USD2.2 billion, or USD0.91 per share, compared to USD1.7 billion, or USD0.71 per share, a year earlier. Revenue rose 13 percent to USD30.8 billion from USD27.4 billion in the year-ago period, and ahead of Wall Street estimates of USD29.8 billion. "After many customers deferred hardware purchases in 2009, we are seeing strong growth in a number of our businesses," said Mark Hurd, chief executive. The company's PC business grew by 21 percent to USD10 billion. Desktop revenues grew by 27 percent and notebooks by 17 percent.
In light of its comfortable quarter, HP now forecasts revenue growth of between 8 percent and 9 percent for its full fiscal year. In the upcoming quarter, HP estimates earnings will be in the range of USD0.87 and USD0.89 a share on revenue between USD29.7 billion and USD30 billion. HP bought smartphone maker Palm at the end of April in a deal valued at USD1.2 billion. The acquisition is expected to close at the end of HP's third fiscal quarter, and the purchase is likely to have an impact on the PC maker's results for the remainder of the year. Earlier this month HP announced it was shelving its Windows 7-based Slate tablet plans, prompting speculation that it would instead concentrate on a Palm OS-based device.
EU chip cartel case reaches settlement
Nine memory chip makers this week agreed to settle a price-fixing case with EU regulators. In all, the firms – Infineon, Samsung, Hynix, Mitsubishi, Elpida Memory, Hitachi, Nanya Technology, Toshiba and NEC – will hand over EUR331.2 million to settle the case. According to the European Commission, the companies received a 10 percent reduction on their fines for acknowledging their part in the cartel. A tenth participant, Micron, didn't receive any fine, as it was the company who drew the Commission's attention to the price-fixing in the first place, way back in 2002.
"By acknowledging their participation in a cartel the companies have allowed the Commission to bring this long-running investigation to a close and to free up resources to investigate other suspected cartels. As the procedure is applied to new cases it is expected to speed up investigations significantly," said Commission Vice President and Competition Commissioner Joaquin Almunia.
This is the first settlement in a cartel case in the European Union. This particular cartel operated between 1998 and 2002, during which time the companies shared information and "co-ordinated the price levels and quotations sold to major PC and server original equipment manufacturers in the EEA," said the European Commission.
Korean firm Samsung was hit with the heaviest fine; it will pay EUR145.7 million. European chipmaker Infineon was next with a charge of EUR56.7 million, and Hynix third with EUR51.5 million.
According to reports, the companies involved have broadly welcomed the end of the investigation and the majority of them have said the fines will not impact their upcoming results.
Google facing privacy probes
Google faced some major privacy criticisms this week, following the news that it inadvertently recorded data from unsecured Wi-Fi connections at homes and offices in several countries while its StreetView cars were taking photos for its mapping project. Here in Ireland, Google says it has deleted the data: "We can confirm that all data identified as being from Ireland was deleted over the weekend in the presence of an independent third party," the company said. Deputy Data Protection Commissioner Gary Davis welcomed Google's fast reaction to the problem but said tighter controls were needed to make sure such privacy breaches didn't happen again. Meanwhile, in Spain, France, Germany, Italy and the Czech Republic, the search giant is facing investigations by data protection authorities following the revelations.
At a news conference in San Francisco on Wednesday, Google co-founder Sergey Brin was blunt in his admission that the company "screwed up" by accidentally collecting the data, and said it was imposing tighter internal controls. "I'm not going to make any excuses about this. Trust is very important to us, and we're going to do everything we can to preserve that," said Brin.
At the same conference Google revealed its plans to develop an app store for its Chrome web browser and operating system. Rather than being downloaded to run on a mobile phone or PC, the apps would be based online. Google said developers could create apps using standard web technologies and can either charge for them or offer them for free.
Meanwhile, in what was a busy week for the internet giant, it emerged that it is planning on acquiring Norwegian internet telephony firm Global IP Solutions for USD68.2 million in an all-cash deal. The acquisition would put Google further into direct competition with Skype and traditional telecoms companies (it already competes with them with its Google Voice application) and would also mean that Google would own the technology that underpins part of the instant messaging systems of rivals including Yahoo, AOL and Baidu. Global IP Solutions makes the underlying processing software for voice and video calls over internet networks.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 