Weekly Digest
Weekly Digest Issue No. 557
16-03-2011
by Deirdre McArdle
iPad 2 gets off to flying start | Facebook muscles in on deals market
Good news on the jobs front
There was a bit of movement in the jobs market this week with expectations raised by a report in the Sunday Business Post that a tech multinational was poised to announce the creation of hundreds of new jobs in the coming days. The paper quoted informed sources, which said the investment "in the digital space" would take place outside of Dublin. And indeed on Tuesday, online gaming firm ZeniMax announced it was to establish a customer support centre in Galway, which IDA Ireland said had the potential to create hundreds of jobs over the next few years. ZeniMax is behind games such as Fallout 3, Rage and Brink.
Separately, data warehousing and business intelligence firm Teradata announced it is to create 30 new jobs in Dublin. The US company has been based in Santry since 2007, and will expand its workforce there. The expansion follows a solid 2010 with global revenues amounting to USD1.9 billion, an increase of 13 percent over the previous year. Recruitment is currently underway for a number of positions, mainly in the area of finance. Interested parties can apply here.
Finally, US biotech giant Amgen has agreed to acquire a Dublin plant from pharma group Pfizer in a transaction that will secure 280 jobs. The former Pfizer plant in Dun Laoghaire had been scheduled to close, but under the deal, 240 workers at the plant will now transfer to Amgen, while the remaining 40 staff will stay with Pfizer. Amgen has also held out the prospect of expanding its presence in Ireland over the next few years. The Amgen announcement is considered quite the coup for IDA Ireland, which has courted the biotech firm for a number of years. In 2006 the firm announced a USD1 billion plan to set up a base in Cork that would employ over 1,000 staff; however, the economic slowdown saw Amgen delay the project for two years, and eventually shelve it altogether.
New Cabinet, few surprises
Last week the new Government took their seats in Dail Eireann, and Taoiseach Enda Kenny named his Cabinet, with few surprises. Labour's Pat Rabbitte was awarded the Communications, Energy and Natural Resources portfolio, a ministry that has proven difficult in the past, particularly the communication segment and the thorny broadband issue.
His appointment came as BT Ireland strategy director Peter Evans suggested that the cost to the State of delivering high-speed broadband nationwide could be significantly less than the EUR2.5 billion quoted in a recent telecoms industry report. Evans is basing his assertion on BT's experience in upgrading Northern Ireland's broadband network, a process he said saw public funds making up a fraction of the total cost. It'll be interesting to see how Minister Rabbitte deals with the national broadband upgrade in the coming months.
Also taking his seat in the Cabinet was Fine Gael's Richard Bruton, who was named Minister for Enterprise, Jobs and Innovation, a high-profile portfolio with significant pressure as Ireland struggles to make its way out of the current economic crisis. The junior minister within this portfolio was named as Sean Sherlock of Labour, who will take on the role of Minister of State for Research and Innovation, again a challenging role as Ireland pins its recovery hopes on research and development and driving the so-called knowledge economy.
iPad 2 gets off to flying start
Apple's next-generation iPad, the iPad 2, stormed out of the gates on Friday, 11 March, on its launch in the US. The device reportedly sold out at Apple stores in the major US cities just hours after it went on sale, with supplies running down quickly at other stores such as Wal-Mart, Best Buy and Target, as well as at AT&T and Verizon outlets. According to the Wall Street Journal, by Sunday Apple's online store was reporting a three- to four-week shipping delay for all models of the iPad 2.
Analysts have estimated that between 400,000 and 600,000 iPad 2s were sold over the first three days of its launch, with Wedbush Securities analyst Scott Sutherland saying in a Reuters report he "would not be surprised to see Apple sell closer to 1 million iPad 2s in the opening weekend." Though Apple has said demand for the iPad 2 on its opening weekend was "amazing", it has yet to release official sales figures for the device.
A report in Apple Insider quoted Deutsche Bank analyst Chris Whitmore as saying the iPad 2 has given Apple an "insurmountable lead" in the tablet market. In light of the early demand for the device, Whitmore said his early prediction of 30 million iPad 2s selling in 2011 now seems "very conservative". To put this into perspective, the device's predecessor, the iPad, has sold approximately 15 million units since its launch in April 2010, according to Apple. The iPad 2 is scheduled to launch in 26 more countries, including Ireland, on 25 March.
Facebook muscles in on deals market
As it looks to expand its footprint into even more markets, Facebook is reportedly planning to test a discount deals service that would offer local daily discounts to its subscribers. The service is to be tested in a number of locations in the US, including San Francsico and Dallas, and will expand on its existing Facebook Deals offering, which integrates with Facebook Places to offer users deals when they check in at specific locations. "Local businesses will be able to sign up to use this feature soon, and people will be able to find Deals in the coming weeks," said Facebook in a statement. According to the Wall Street Journal, the social network said it would be teaming up with a number of partners, including Gilt City, Reach Local, Tippr, KGB Deals and Zozi, to aggregate their deals on Facebook.
The move will put the social network into direct competition with the existing key player in this market, Groupon, which claims to have over 50 million subscribers. Facebook's strength is its massive base of over 500 million users worldwide, although to be fair to Groupon its growth has been phenomenal since its launch just two years ago. The discount site completed a USD950 million funding round in January, from investors including Andreessen Horowitz, Kleiner Perkins Caufield & Byers and Digital Sky Technologies. Following the investment Groupon promptly bought three discount sites in India (SoSasta), Israel (Grouper) and South Africa (Twangoo), as it expands globally.
Whether Facebook's move will impact on Groupon's IPO plans remains to be seen. However, it's safe to say that the online discount site must have been less than happy to hear of Facebook's plans.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 