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Thursday, August 30, 2012

Motorola likely to pull out of India

 Motorola Mobility may shut down its business in India as part of the massive global restructuring that the company has planned. BGR India, a technology blog, reported the company didn't plan to bring additional stock of its phones and had put up an R&D center in Hyderabad for sale.

When contacted William Moss, director of communications for Asia-Pacific at Motorola, confirmed the restructuring plan. However, he stopped short of saying the company would no longer do business in India.

"Motorola Mobility is reducing its headcount by approximately 4,000 globally, and two-thirds of this reduction will occur outside US. We also plan to close or consolidate about one-third of our 90 facilities globally," he told TOI in an email. "India is affected by this global restructuring, but we do continue to have substantial operations there."

Moss added the restructuring plan is bound to lead to job cuts in the affected countries. "We understand how hard these changes will be for the employees concerned. We are committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs," he said.

Motorola Mobility, which has fallen behind Apple and Samsung in the crucial smartphone market, was bought by Google last year for around $12.5 billion. The deal was completed this year and a restructuring of the company and its operations was expected. As soon as the deal completed in May this year, Google replaced Motorola CEO Sanjay Jha with Dennis Woodside, a Google executive, who played a key role in events leading to the closure of the deal.

Moss said the company would now focus on fewer phones and simplify its business. "We will simplify our mobile product portfolio -- shifting the emphasis from feature phones to more innovative and profitable devices. We expect this strategy to create new opportunities and help return our mobile devices unit to profitability," he said.

Tuesday, August 28, 2012

Samsung loses $12 bn in stock market after Apple's win

 Samsung Electronics' shares tumbled around 7 percent on Monday, wiping $12 billion off the South Korean giant's market value, as a sweeping victory for Apple in a US patent lawsuit raised concerns about its smartphone business - its biggest cash cow.

Samsung, which says it will contest the verdict, was ordered to pay $1.05 billion in damages after a California jury found it had copied critical features of the hugely popular iPhone and iPad and could face an outright sales ban on key products.

"There are still too many variables including the final ruling to come at least a month from the recent verdict, and whether there will be a sales ban on Samsung's main sellers such as the Galaxy S III," said a fund manager at a Korean asset management company that was one of the biggest institutional holders of Samsung's stock as of end-March.

Shares in Samsung - the world's biggest technology firm by revenue - tumbled as much as 7.7 percent, its biggest daily percentage drop in nearly four years, to 1.177 million Korean won ($1,000), versus a 0.2 percent drop in the broader market.

Trading volume was heavy, more than doubling last week's daily average by early Monday trade.

In the most closely watched patent trial in years, the jury at a federal court in San Jose, California, just miles from Apple's headquarters, found that Samsung infringed on six of seven Apple patents.

The verdict, which surprised many analysts with its speed - coming after less than three days of deliberations - and the extent of Apple's victory, will likely solidify the US firm's dominance of the exploding mobile computing market.

Apple's triumph was also seen as a blow to Google, whose Android software powers the Samsung products that were found to infringe on Apple patents.

Analysts estimate Samsung's earnings will be reduced by 4 percent this year due to increased patent-related provisioning.

"Samsung should be OK - it means a 4-5 percent hit to the bottom line," said a Hong Kong-based hedge fund manager who declined to be identified.

"Both companies are in the midst of a squabble but I don't think it's a structural negative for Samsung. At the end of the day, as Forbes reported recently, Samsung has 65,000 patents versus 9,000 for Apple. Furthermore, Apple relies on Samsung for the processing brains of their phones. I sold Samsung four months ago but am watching the stock closely now."

The court case had weighed on Samsung's stock in the week leading up to Friday's verdict, but even after Monday's slide it remains up around 75 percent over the last 12 months, during which time galloping smartphone sales have powered record profits.

Eyes on Galaxy S III

Apple plans to file for a sales injunction against Samsung, its lawyers said, and the judge in the case set a hearing date for September 20. Samsung, in turn, said the verdict "is not the final word in this case."

Top executives at Samsung, led by vice chairman Choi Gee-sung and head of its mobile division JK Shin, held an emergency meeting on Sunday.

The biggest concern for Samsung remains whether its latest flagship product the Galaxy S III, which was not included in the case, will also be targeted by Apple. The model is Samsung's best selling smartphone, with sales topping 10 million since its late May debut.

But Samsung's skill as a "fast executioner" - quick to match others' innovations - would likely mean tweaked, non-patent infringing devices would be on the market soon after any ban came into place, analysts said.

"The ruling is a costly lesson for Samsung - but also an opportunity for a true alternative to Apple's well-known hardware with more innovative thinking and imaginative products ahead," Morgan Stanley analysts said in a note.

"There are more ways to build a touch screen smartphone and thanks to its fast execution capability, Samsung could quickly work around design changes, upgrading models and introducing new technology such as flexible displays, Galaxy S III and Galaxy Note to differentiate its devices from Apple."

Samsung was disappointed by the verdict and plans to keep up the legal fight to have its claims accepted, according to an internal memo sent to its employees and released to the media.

"We've sought to settle this through negotiations, as Apple is our customer but had no choice but to counter sue," the memo said. "History has shown there has yet to be a company that has won the hearts and minds of consumers and achieved continuous growth when its primary means to competition has been the outright abuse of patent law, not the pursuit of innovation."

Saturday, August 25, 2012

Apple, Samsung products banned in South Korea

A South Korean court ruled on Friday that technology rivals Apple and Samsung Electronics both infringed on each other's patents, and ordered a partial ban of their products in South Korea.

The Seoul Central District Court ordered Apple to remove the iPhone 3GS, iPhone 4, iPad and iPad 2 from shelves in South Korea, citing they infringed two of Samsung's telecommunications patents. The court also ruled that Samsung infringed one of Apple's patents related to the screen's bouncing back ability and banned sales of the Galaxy S2 and 9 other products in South Korea.

Sales of devices recently released by Samsung and Apple -- including the iPhone 4S and the Galaxy S3 smartphones -- were not affected.

The court also ordered the two parties to pay monetary compensation to each other. Samsung must pay Apple 25 million won ($22,000) while Apple must pay its rival 40 million won.

The lawsuit is part of global, multibillion dollar fight between the world's two largest smartphone makers. The biggest stakes are in the US, however, where the two companies are locked in an epic struggle over patents and innovation in a federal court in San Jose, California.

Cupertino-based Apple sued Samsung in 2011 in the US, alleging that some of the South Korean company's smartphones and computer tablets are illegal knockoffs of Apple's iPhone and iPad. Samsung denies the allegations and argues that all companies in the cutthroat phone industry mimic each other's successes without crossing the legal line.

Apple is suing Suwon-based Samsung for $2.5 billion, making the case one of the biggest technology disputes in history. Jury deliberations began Wednesday after three weeks of testimony.

Days after Apple filed its suit in the US, Samsung filed a lawsuit on its home turf and in other countries, accusing Apple of breaching its telecommunications patents.