Weekly Digest
Weekly Digest Issue No. 551
02-02-2011
by Deirdre McArdle
Android marches strongly on | Chips are down for Intel
Tech sector thriving in Ireland
This week was a positive one for the Irish tech sector, during which it was named the most trusted sector in Ireland, according to the Edelman Trust Barometer 2011. The sector also had some good news on the jobs front, with Dublin firm Endeco Technologies announcing its plans to create 30 jobs over the next year. The positions will be in software development and sales and marketing. The firm, which specialises in energy management technologies, recently completed a funding round led by AIB Seed Capital Fund, where it raised over EUR800,000. It said it will use the money to grow its workforce as it seeks to expand both in Ireland and overseas.
Also this week, Galway got a boost when Valeo Vision confirmed it was to hire 100 new staff as its facilities in Tuam. The new employees will focus on R&D. Valeo supplies components to the automotive industry and its latest plans will see it develop the next generation of camera/vision systems and technologies for vehicle parking and manoeuvring. The firm's French parent company has ploughed EUR17 million into the Galway firm, and the investment will mainly be used to expand its manufacturing and research activities.
In addition, Pocket Kings, a Dublin-based subsidiary of the world's second-largest online poker room, Full Tilt Poker, announced it is to create 100 new jobs. The company is recruiting for technical and marketing staff, and the available positions include system engineers, web developers and software developers. Pocket Kings is based at the Cherrywood Science and Technology Park.
Finally, it wasn't all good news in the tech sector this week. Following on from fears raised late last year about the closure of Intel's Fab 10 factory in Leixlip, the chip giant has confirmed it will close the plant in March of this year. Though a number of staff have been reassigned or have been able to upskill to remain with Intel, around 100 redundancies will be required.
LinkedIn IPO gets underway
Last Thursday business networking site LinkedIn kick-started its market flotation by filing registration documents for an initial public offering (IPO). The company aims to raise around USD175 million from the IPO, which looks likely to happen within the next three to four months.
According to the filing, LinkedIn's revenue doubled in the first nine months of 2010 from the same period in 2009, to USD161 million. Though it reported USD1.9 million in profit during that period, it said it did not expect to be profitable in 2011 on a GAAP basis. The site's main revenue streams come from premium subscriptions, recruiting deals and advertising; just last week, LinkedIn upgraded its tools to allow advertisers deliver more targeted ads.
LinkedIn will be the first social media company to float on the stock markets, and firms like Facebook, Zynga and Groupon will no doubt be watching with interest to see how the IPO goes down. It will give a good indication too as to the effect the social media sector could have on the global markets.
Analysts greeted the news with caution. Prominent investor Jim Breyer, managing partner with venture capital firm Accel Group, told Bloomberg he thinks it's too early for LinkedIn to go public. He said his advice to firms Accel has invested in is to take time to build profitability before floating. Accel has invested in both Facebook and Groupon.
Android marches strongly on
The soaring popularity of Android-based devices was in evidence this week, with the news that not only had Google's Android captured 22 percent of the tablet market, it also overtook Nokia's Symbian to become the top smartphone operating system.
During the fourth quarter just under 10 million tablet PCs were shipped globally, 2.1 million of which were Android-based. This compares to 100,000 Android tablets shipped in the third quarter, according to figures from Strategy Analytics. While Apple is leaps and bounds ahead, selling 7.3 million iPads alone in the fourth quarter, its market share has been eroded by Android from 95 percent in the third quarter to 75 percent in the fourth quarter. Strategy Analytics predicts that Android will increase its share of the tablet market during the opening months of 2011, with a number of devices due to hit the shelves, like Motorola's Xoom.
Meanwhile, in the smartphone market, Android became the leading operating system in the fourth quarter, with shipments of Android-based phones hitting 32.9 million. It overtook long-time leader Nokia's Symbian, which shipped in 31 million smartphones. The figures come from research firm Canalys, who said that Android growth was driven primarily by strong performances from HTC and Samsung, which between them accounted for nearly 45 percent of Google OS-based handset sales.
Chips are down for Intel
Chip giant Intel hit a major setback this week when it was revealed that a chipset design flaw could end up costing it around USD1 billion in repairs and reduced revenue -- the costliest mistake in Intel's history. The flaw was discovered in 'Cougar Point', a support chip for the 'Sandy Bridge' chipset, and the error would, over time, have led to failures in connections to hard drives and DVDs.
Almost 8 million of the accessory chips have been shipped since early January to hardware companies like HP, Dell and Apple, which install them on motherboards in laptop and desktop PCs. Intel has halted shipments of the flawed chip and expects to begin shipping a new version in late February. The company is offering to repair or replace all of the affected boards and systems.
The knock-on effect of this flaw is the likely delay of hundreds of new PCs and laptops by about three months, and potentially slowing growth in the PC market, which is only just recovering from the economic fallout. So far, reports suggest that HP is to delay the launch of a number of new business laptops, while Apple's new MacBook Pro laptops are also likely to be held up, according to AppleInsider. Dell has stopped selling a number of Alienware gaming laptops for the time being, while Samsung has said it will offer refunds on some PCs it has already sold.
Along with the financial implications for Intel, the flaw could have a negative impact on the chip giant's reputation. Certainly, it's the most embarrassing fault since 1994 when an error was discovered in its Pentium processors after millions had been shipped in PCs. No doubt rival AMD will be rubbing its hands in glee at this opportunity; indeed, following the Intel news, AMD's share price jumped 5 percent while Intel's slipped 1.5 percent.
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