Weekly Digest
Weekly Digest Issue No. 543
25-11-2010
by Deirdre McArdle
Apotheker heads up solid results for HP | Speculation mounts on iPhone 5, iPad 2
Firecomms acquisition brightens the mood
In the middle of one of the gloomiest weeks in Ireland in recent memory, a glimmer of hope broke through as Cork-based Firecomms was acquired by China's ZJF Group. The all-cash deal, details of which were not revealed, guarantees a EUR5 million investment in research and development, which will lead to the expansion of Firecomms' engineering team from 18 to 30 people over the next year. It will also help Firecomms to expand quickly in mainland China, which the company says is its largest market.
Spun out of the Tyndall National Institute in 2001, Firecomms develops semiconductors that allow plastic fibre optic cables to be used for high-speed communications in home, industrial and motoring applications. ZJF Group said its acquisition of Firecomms comes as a number of provincial Chinese governments order plastic optical fibre to power a nationwide rollout of high-speed broadband and communications links, instead of copper wires. "Delivering this infrastructure with copper cables would result in over one million tons of CO2 emissions for China and would be impossible to implement as the demand for copper would far outweigh the world's supply. China is already the largest manufacturer of Plastic Optical Fibre and we are combining those huge resources with Firecomms' leading technology,” said Xuping Zheng, Chairman of the ZJF Group.
Minister for Enterprise, Trade and Innovation Batt O'Keeffe welcomed the news, which he said "demonstrates the global appeal of the Irish high-tech sector". Indeed, the acquisition is the first technology acquisition of an Irish high-tech company by a Chinese corporation, according to the Cork firm.
Apotheker heads up solid results for HP
This week saw new Hewlett-Packard boss Leo Apotheker preside over his first set of quarterly financial results at the firm. And a solid set of results they were: revenue increased by 8 percent to USD33.33 million, driven by an impressive 25 percent jump in server and storage revenue. Analysts had been expecting revenue of USD32.75 billion. Net income for the firm's fiscal fourth quarter came in at USD2.54 billion, or USD1.10 per share, up 5 percent from USD2.41 billion, or USD0.99 per share, last year. Excluding items, HP earned USD1.33 per share, topping the USD1.27 per share analysts were expecting. In light of the better-than-expected figures HP raised its forecast for the new fiscal year, to sales of between USD132 billion and USD133.5 billion and non-GAAP earnings per share of between USD5.16 and USD5.26, up 13 to 15 percent from the year ended 31 October.
This was Apotheker's first public appearance since taking the top position at HP, and press and analysts alike were keen to hear what his plans were for the company. General consensus was positive as Apotheker committed to shoring up HP's software business, an area where he has experience, thanks to his stint as CEO of business software giant SAP. In another positive move, the new HP CEO outlined his intention to commit more money to research and development. And a real crowd pleaser was his vow to restore the vast majority of employees' salaries to their levels before a company-wide cut was imposed by Apotheker's predecessor, Mark Hurd, in February 2009. The move will likely restore morale at HP, which has taken a battering recently following Hurd's ignominious departure.
Separately, HP this week warned it could stop investing in Ireland if the country's low corporation tax rate of 12.5 percent is increased in return for an EU/IMF bailout. "HP is very clear, if the tax rate increased we would be re-looking at our investment in Ireland," the company's manufacturing boss Lionel Alexander told the Irish Independent. HP employs over 4,000 people around the country.
SAP to pay Oracle USD1.3bn in damages
German business software maker SAP took a hit this week, both to its pocket and its reputation. The firm was ordered to pay USD1.3 billion in damages to Oracle, over a case of copyright infringement in the US. Prior to the trial, SAP had admitted that its Texas-based subsidiary, TomorrowNow, had illegally accessed Oracle's servers and stolen its software, but it had argued that the damages should not exceed USD40 million. Following admitting liability, all that was left for the jury to decide was just how much would be awarded to Oracle in damages; Oracle had claimed that it was owed at least USD1.7 billion, or what it said it would have charged SAP for a licence to use the software legally. In a statement, Oracle said the copyright damages were "the largest amount ever awarded for software piracy".
For its part, SAP said it was disappointed with the verdict, and said it would "pursue all available options, including post-trial motions and appeal if necessary." Industry observers have suggested that SAP could perhaps go down the route of negotiating with Oracle to agree on a reduced settlement payout in exchange for SAP not appealing the verdict.
Unsurprisingly, SAP's share price dropped on both the German and New York stock exchanges following the verdict on Tuesday. However, the German firm maintained the verdict would not affect its full-year forecast, which it reiterated at the end of October. What the verdict will likely affect though is SAP's reputation within the business community, particularly in the US. And where SAP loses, Oracle gains. As well as the damages SAP will now have to pay to its chief rival, it may well have to look on and watch Oracle reap the rewards of SAP's public humiliation.
Speculation mounts on iPhone 5, iPad 2
The rumour mill went into overdrive this week as speculation grew that Apple is poised to release the iPad 2 and the iPhone 5. Reports are suggesting that a new iPhone could be on the cards as early as January 2011. The iPhone 4 was only released in June 2010, but it's been blighted by early issues with the antenna. The iPad debuted at the beginning of April 2010, and a new version of the device is due for release in April 2011. In saying that, a few media reports are speculating that the iPad 2 could be available before Christmas, but that does seem unlikely at this stage.
Any new iPhone would need to tackle the antenna problem that plagued the iPhone 4, while reports predict the iPad 2 would feature two cameras so that users could run FaceTime, would be lighter and thinner, would support CDMA, and would have better battery life.
Separately this week, Apple released iOS 4.2 for the iPhone, iPad and iPod touch. For users this upgrade means they will now have access to multitasking, folders, unified inbox, game centre, AirPlay and AirPrint. It also includes a "Find My iPhone" (or iPad or iPod touch) feature, which helps users locate their missing devices on a map. The release of iOS 4.2 was originally due for early November, but it was hit by a number of bugs that delayed it somewhat. In a somewhat unusual move, Apple is to release a further upgrade, iOS 4.3, before Christmas. A MacStories report quoted a source who said that iOS 4.3 was always due to be released in mid-December. The 4.3 upgrade will add support for the Apple/News Corp iPad-only newspaper app, called The Daily, which was announced this week.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 