Monday, October 31, 2005

Mon - Telefonica bids for the UK's O2

Telefonica has just announced a $31.5bn acquisition of the UK's O2. O2 was itself spun out from the UK's British Telecom. It was their mobile phone unit, with ooperations today in the UK, Germany and Ireland.

This is a major move by Telefonica, which is now the 3rd most valuable telco on the planet. But, their bid may flush out a competing offer from Deutsche Telekom. All the same Telefonica would have far less regulatory issues as they don't really have businesses in the UK or Germany.

This is yet another major move in the rapidly accellerating consolidation of the European telco market. It looks like a big five group of truly pan-European operators is emerging that could force considerable change in the Euro telco market. They include Vodafone, Deutsche Telekom, France Telecom, Telecom Italia and Telefonica. It will be interesting to see what moves Telecom Italia makes as they are now lagging the group in European presence.

O2's management team must be applauded for creating such a valuable target in a reasonably short period of time. I wonder what will happen to the O2 brand? If I was Telefonica I would hang on to it hard.

Mon - AT&T lives on!

It may be that AT&T is fast becoming the gopher of business. Ya just can't squash 'em. Just when everyone thought the AT&T brand was dead it's now back with a vengeance!!

When Cingular bought AT&T mobile they were quick to jettison the AT&T brand in favour of cingular.

As SBC bought the rest of the AT&T empire everyone thought they would do the same. So, the AT&T brand and institution seemed to be finally dead and buried.

But no! AT&T is back as never before. SBC has instead surprised everyone by jettisoning their brand in favor of AT&T. Apparently one of the reasons is that in research they found that 98% of people in the US were aware of the AT&T brand - and just think how much more relevant it is in the international market place.

So, SBC will be re-branded AT&T. But, no news yet on whether they will also adopt AT&T's iconic T ticker.

Thursday, October 27, 2005

Thurs - Yahoo launches into online travel

Yahoo yesterday launched an online travel agency that helps consumers not only book flights and hotels, but plan, organise and share trips via the internet.

The move reflects a wider trend going on in online travel, where the industry moves beyond travel booking to a more comprehensive service including maps, reviews, photos and user-generated content such as weblogs.

Yahoo seems to have spent 18 months putting together Trip Planner and it weaves together many of Yahoo's existing services and recent acquisitons, including maps, bulleting boards, local lsitings and online photo sharing form Flickr.

Well, you can't blame Yahoo, after all online travel is the largest e-commerce segement and worth a huge amount annually. All the leaders in the market are pure play travel sites so its probably time that a portal shakes the market up. And Yahoo sure have a huge dedicated customer base to sell to.

Thurs - Time Warner board meets today to discuss AOL

Time Warner's board meets today to discuss the AOL deal in particular.

I'd love to be a fly on that wall. Just imagine:

"So, Dickie, what do you think we should do with AOL?"
"Well, guys, the MSN joint venture could create one heck of a competitor to Google and Yahoo. And lets face it Google is worth over $100bn today and their value's only going up. So, if an AOL/MSN portal becomes worth half that, Time Warners share price will shoot up. On the other hand, doing a deal with Google could mean that we ride their coat tails while hanging on to a larger portion of AOL."
"Oh no, it sounds like six of one and half a dozen of the other Dickie. Maybe we should do what all good boards do and postpone the decision to the next board meeting or to next year."
"Yeah, but we have this active investing guy called Carl Icahn crawling all over us and he can be a real pain up the you know where - so I think we should try and make a decision."
"OK, ok lets decide to make a decision at the next board meeting. That's bold for us - eh?"

Come on guys - just go for it. Both are pretty good options, but my gut still says you should go with an AOL/MSN merger. Maybe just try and ensure you have a controlling stake, given AOL is worth more and you have all that lovely Time Warner content. But, I don't think there's really room for 4 global portals in the market - so better that MSN merge with you than say Yahoo!!

Thurs - Apple creates havoc with chip shortage

Well, you know that Apple are back in a big way when one of their product categories creates a world chip shortage. I guess Apple only ever dreamed of reaching such product power with their computers. But, instead they are now achieveing such lofty heights with the venerable iPod!

Creative Technologies, Apple's biggest rival in the portable digital music player market has come out screaming that Apple have hogged supplies of flash memory chips in advance of this Xmas buying season to the extent that they are now creating worldwide shortages and even forcing consolidation amongst MP3-player manufacturers.

Apples seems to have struck such a far reaching and price efficient deal with Samsung, the biggest memory chip maker, that they have created an industry-wide shortage of 1 gigabyte flash memory chips such as those used in the Nano.

Not that Apple's iPod really faces much competition at the moment, but this sure seems one hell of an efficient way for them to keep strengthening their market leadership position.

Thurs - RIM rejected by Supreme Court

The US Supreme Court has rejected a request by RIM for it to intervene in its patent dispute over RIM's Blackberry device.

The case now reverts to a lower court that is likely to be asked by NTP to impose a ban on sales of Blackberry devices in the US after the two failed to reach agreement on a $450M settlement. I gues NTP is looking for more money.

This is not good for RIM.

Wednesday, October 26, 2005

Wed - Google launches into commerce and listings

Google looks set to launch yet another major intitiative. They are apparently testing a new service that could enable them to compete more directly with Ebay in particular.

Known as Google Base (odd name!!), the service should let internet users submit information about a wide range of personal items, free of charge, to a publically searchable database managed by Google.

It sounds to me like one huge internet listings or directory service for people to promote the sale of goods and services. Google as always will make money from advertising. Sounds necessary, and painful for Ebay, who's already received shockwaves as their shares fell 4% yesterday on the back of the news.

This looks like a natural extension for Google. We welcome the move.

Wed - Cablevisions future?

The Dolan family, the largest shareholders in Cablevision, the successful New York cable group has just pulled a plan to take the group private in a deal valued at $7.9bn.

This has to raise the question of whether the Dolan's may now push instead for the group to be sold. After all, cable groups are about to come under a wave of competitive attacks from powerful US phone companies launching their own triple plays and TV on demand.

If I had to bet I'd put my money on Time Warner or Comcast having a run at Cablevision - after all, they have one hell of a valuable, if localised franchise.

Wed - Amazon weakens

Amazons shares fell yesterday as they offered a cautious revenue forecast for the next period and the key Xmas buying quarter. They also reported earnings for the 3rd quarter below expectations.

It also looks like Amazon's margins are taking a toll from their free/fixed shipping promotions.

I can't help wondering if Amazon are feeling greater comptetive pain now from a healthier Yahoo and an increasingly aggressive Ebay. With Google set to launch more and more into commerce as well, it is hard to be quite so bullish on Amazon going forwards.

But, Bezos is driving forwards as always and ramming through a much needed set of new technologies and features, including getting Amazon more and more into music, book and video downloading. This seems a no-brainer - but they'll have to move fast!

Wed - TeliaSonera latest European telco struggling with international growth

On monday we looked at mid sized regional telco's in Europe who were struggling to find the right acquisitions to spur their international growth which is so necessary to give them the necessary pan European scale and to get away from slowing local markets.

Well, TeliaSonera seems the latest European telco to face the same issue. The part Swedish and part Norwegian outfit has invested huge amounts of money to buy mainly mobile assets in regions such as Russia and Turkey. But, as they are now descovering, these developing countires are a far cry from managing in a stable Nordic environment.

TelaSonera is battling to gain a controlling interest in one of its key investments, in Turkcell, the fast growing Turkish mobile operator. And these attempts have been thwarted as a major investor that promised to seel them their stake has just rescinded and is instead selling out to a Russian group. This will leave TeliaSonera with only a minority stake in what was supposed to be the hub investement for them at the geographic epicentre of their international expansion.

This just goes to prove how hard it is for the European mid sized players to try and build scale and international operations in far flung countries and and at the boarders of Europe. I can't help feeling that their will be more pain to come and not all those attempting this international reach will survive as independent entities.

Tuesday, October 25, 2005

Tues - Intel announces more problems with Itanium

Intel has delayed by months the release of the next three major versions of the Itanium processor, a new blow for the processor family. But the chipmaker also plans a change it said will boost the performance of its more widely used Xeon line.

The next Itanium, a major revision code-named Montecito, recently had been scheduled for debut this year, holding volume production until the first quarter of 2006 so the chipmaker can address quality problems. Now, however, it will debut in mid-2006. Its successor, "Montvale," was pushed from late 2006 to 2007, and the next major redesign, "Tukwila," was pushed from 2007 to 2008.

This is a blow for Intel, that a few years ago hailed Itanium as a major breakthrough, but has since only found a small niche server market for it. This could play into AMD's hands as they continue to ramp products and production. If Intel can fight effectively with its new Xeon line, that could prove their best defence in the short term.

Tues - Leading UK games publisher soars on bid talk

SCi Entertainment, the UK's leading games publisher soared to a massive valuation of nearly $800M, four times their worth only a year ago, as they are rumoured to be in talks to be bought.

SCi is perhaps best known for publishing Lara Crofts Tomb Raider and Hitman, the titles they themselves acquired earlier this year in what now looks like a sneakily smart deal.

It seems as though lead bidders include Electronic Arts and Midway Games, a Chicago-based publisher controlled by Sumner Redstone. EA apparently needs the deal to help them prop up a few quarters of declining sales and Midway because Sumner thinks electronic games is the next big thing. Sling in a few prowling private equity groups and it looks like SC1 could even go for $900M.

Given that for the 9 months to June 2005 SCi has racked up a loss of $24M on sales of $30M they could end up selling for a huge multiple. Mind you, with the next generation of games consoles about to debut and the usual buying frenzy surrounding this, games is becoming a huge and critical media segment.

Tues - Ericcson to buy Marconi for $1.77bn

Well, thats the end of the UK's attempts at restoring the fate of the once powerful industrial conglomerate of GEC. Today it looks as though the vast majority of the remaining pieces of the beleaguered group, trading as Marconi, will be sold off to Ericcson.

Ericcson, who has proven that you can pull off remarkable transformations with messed up telco equipment suppliers, and providing a starkly different scorecard to the folk at Marconi, will now gobble the group up at a sensible price and bolster their fixed line business. To pull off their turn around, Ericcson, of late has focused on the mobile infrastructure market.

Ericcson is cherry picking at the smitten Marconi, taking all of their network equipment business, including R&D and the data neworking business in the US. Marconi will continue as an independent concern retaining its UK services business, an operation with annual sales of around $500M and a similar sized cash balance.

This ends a tough few years for Marconi when they battled desperately to turn the group around. Their final death knell came as they were excluded from a huge BT contract at the end of last year. Marconi had always enjoyed BT's considerable business. The biggest irony of all is that they lost the business to Ericcson! - proving that customers always come first.

Tues - Texas Instruments hits record sales

TI reported a 10% rise in quarterly revenues to a record $3.59bn as more of its chips were used in mobile phones and electronic devices. TI adjusted their earnings for the first timer to take account of stock options and their stock price was later hit by the weaker than expected earnings per share.

They predicted revenues largely flat for the 4th quarter with earnings a little higher. Analysts wanted more, but TI seems to be delivering solid results and gains on the back of their leadership position in both the high and low end of the cellphone market.

It was interesting to note that revenues from 3G phones looks like they will exceed $1bn for this year, up significantly on last year.

Monday, October 24, 2005

Mon - European telco operators on the move again

It looks like a couple of mid-sized European telco operators are shaking up the telco puzzle yet again as Swisscom and a Virgin Mobile with the Carphone Warehouse go hunting abroad.

Today rumours that Swisscom, the long standing Swiss PTT is on the search for a major acquisition in Europe. The list of possible suitors include TDC, the danish group, that also owns one of Swisscom's local competitors, Sunrise. Swisscom is apparently also looking at Telekom Austria and Eircom of Ireland.

The fact that Swisscom's highly successful local competitor, Cablecom, has recently been taken over by Liberty Media makes Swisscom depserately in need of a deal to find growth abroad.

So too for Virgin Mobile who seems to be teaming up with the Carphone Warehouse to jointly bid for France's fourth mobile license. This all points to a continued accelleration in the consolidation of the Euro telco landscape as regional players are forced to consider merging to compete against larger pan-European players as well as to strengthen themselves as their local markets get liberated and competition intensifies.

This is of course all good for consumers as prices will continue to come under pressure and services improve with the convergence of internet access and telephony.

Mon - Office 12 gets its debut today

Microsoft's hugely profitable Office suite is to unveil its latest incarnation as Office 12 is revealed later today.

The focus seems on innovating for the corporate sector rather than for consumers as business intelligence features are added. Plus you will be able to share data better and access rights improve. The example of different members of a team being able to better work on different parts of a coporate spreadsheet is cited.

Look and feel seems set to change as Office gets a whole new user interface and as Excell gets visualisation tools. I must say nothing about Office 12 seems to get me all hot under the collar, but lets see what Microsoft's keeping up their sleeve for later today.

And they will need a hell of a release next year to persuade us all to upgrade and to hold the increasingly legitimate and confident open source guys back.

Mon - Buy-out groups examine Computer Sciences

Private-equity firms are looking to buy out Computer Sciences Corp., an outsourcing giant with more than $14 billion in annual sales and an $8.4 billion market value.

The firms looking at Computer Sciences include Texas Pacific Group, Warburg Pincus and Blackstone Group. The firms say the takeover plans remain in the early stages of development, and no deal may materialize for the 46-year-old El Segundo, Calif.-based company.

The company could provide some break-up potential as about a third of its revenues come from large, long-term government and military outsourcing deals. The rest of CSC's revenues come form the corporate sector with a mix of sytems integration and consltancy revenues as well as some outsourcing contracts.

Perhaps one of the buy-out groups should consider teaming up with a strategic partner such as a Dell, HP or even Sun that could benefit from developing the services part of their business further.

Sunday, October 23, 2005

Sun - Firefox celebrates 100M downlaods

Firefox has announced 100M downloads. It has cemented its position as the worlds number 2 browser supplier after Microsoft. This is an impressive result from the one year old upstart.

Firefox, which launched in November 2004, has now logged more than 45 million users, said the Mozilla Foundation, the non-profit group that oversees the browser’s development. That gives Firefox a 7.6 percent share of the browser market, according to September figures from Net Applications, a very distant second to IE’s 86.9 percent share.

Microsofts position looks deeply intrenched, even though the browser wars seem to be going through something of a resurgence. Firefox will soon be joined by the latest effort from Flock who is planning an all new browser approach that amongst other things incorporates blogging tools.

Microsoft may have more of a struggle to maintain their market share going forwards, particularly as they have not innovated that much with IE over the last few years.

Friday, October 21, 2005

Fri - Google soars

Well, Google does it again! Google announced record revenues of $1.048bn for the three months to end Sept. They're up a whopping 108% over the year-ago period. Net income jumped to $437M. Their results were way ahead of the most optimistic estimates of analysts.

And Google seem to be firing on all cylinders. New products such as Gmail and Google Earth, in particular, created a traffic surge. Also, large companies seem to be increasingly shifting their marketing spending into search-related advertising. A trend that still has a long way to run. Fuelled by the fact that people spend more time searching particularly with the better experience form broadband.

Plus, revenues from Google's own sites jumped 20% percent from the preceding 3 months. These results also provide two interesting industry dilemma's - 1) how do yahoo respond and 2) what should Time Warner do with AOL? Do they get together with Microsoft and try to create another real competitor to Google or do they ride the Google wave and hitch up with them. The conclusion will greatly affect all the portal players going forwards.

Fri - Nokia sees solid sales growth & lifts forecast

Nokia's 3rd quarter results beat expectations. They also lifted their forecast of worldwide mobile phone sales to 780M. Last month the mobile industry passed a major milestone with more than 2bn subscribers.

None the less their shares fell due to stagnant market share which seems stuck at 33%. With stronger competition from a resurgant Motorola and the Asian trio of Samsung, LG and BenQSiemens snapping at their heels it may be hard for Nokia to increase market share going forwards.

The results showed an average handset margin of 16% compared with 13% in the last quarter, which was good given the pummelling that average selling prices have been taking. Investors seem particularly concerned about this trend. But, Nokia has a whole raft of advanced multimedia handsets coming out that could address some of these issues. It will be interesting to see the uptake of such advanced 3G devices this Xmas, the key buying season.

Apparently a lot of Nokia's strentgh in the last quarter came from solid progress in Asian markets and China in particular.

The big questions for investors is is the mobile handset market starting to behave like all mature consumer electronics industries where price erosion and commoditisation become dominant themes. Probably. Scale is therefore everything and lower margins here to stay.

Fri - SBC posts solid numbers on back of braodband & wireless

SBC Communications, the US's 2nd largest telco produced better than expected 3rd quarter results yesterday.

They, like many other traditional fixed line operators are now finally benefiting from the higher growth broadband and mobile businesses which are off-setting the erosion of their traditional fixed line voice business.

SBC added 528,000 DSL lines in the period, which is its largest quarterly increase ans DSL revenues grew 23%. This was helped by SBC's aggressive pricing strategy.

In its traditional local phone line business the company ended the quarter with 50.2M access lines, a 5.1% decrease from a year earlier, driven also by a loss of 643,000 wholesale lines.

Including its 60% share of revenue from Cingluar SBC's revenues totalled $15.57bn an increase of 21% over the year earlier period. SBC expects to cut its workforce by around 10,000 this year. Net income was $1.25bn.

At the beginning of next year SBC takes on the cable guys with their new advanced fibre-optic network that will enable it to offer its customers IPTV (internet protocol TV) and video services.

Thursday, October 20, 2005

Thurs - Euro tech M&A growth latest indicator of tech bull

The European technology sector saw a record number of merger and acquisitions bids in the 3rd quarter, outstripping even the levels seen during the peak of the tech bubble in the first quarter of 2000.

According to the latest European Technology Acquisition Review, published by Regent Associates, 820 acquisitions were announced in the three months to the end of September, beating the previous record of 781 in the first quarter of 2000.

The tech bull, driven by global M&A deals is roaring. And there's a way yet to run. Expect the public markets and tech IPO's in particular to start moving more agressively as well.

Thurs - SAP shines

SAP, the world’s largest business software maker, raised its full-year outlook after 3rd quarter earnings exceeded expectations on the back of improved sales in the US.

The German technology group today raised forecasts for full-year software revenue growth to a range of between 12 and 14 per cent from 10 to 12 per cent.

SAP‘s revenue for the three months to September 30 was 13 per cent higher than the previous year, at €2.01bn. Pre-tax profits were 11 per cent higher at €517m.

Software sales showed the strongest growth, adding 18 per cent overall. The best performing region was the US, where software sales grew 34 per cent to €199m and total revenue for the region was 40 per cent higher at constant currency rates.

SAP's growth in the US must reflect well on its strategy to fend off the increasingly powerful applications business Oracle is assembling after buying Peoplesoft and Siebel in particular.

SAP continues to lead the worldwide enterprise software market - its share of software revenue grew to 60% from 58% at the end of the second quarter - it has responded to Oracle by using its “Safe Passage” program, which gives discounts to customers of Oracle’s new acquisitions.

But, holding onto such a massive market share may get harder starting next year or the year after as Oracle integrates the businesses thay have acquired and aggressively goes after the market.

Thurs - Ebay back on growth track

Ebays most recent quarter showed that the worlds largest online auction company is back on track for solid growth. The industry has for a little while been predicting that Ebay's growth in more mature markets was levelling off - which at one point has to happen. I guess just not quite yet.

Revenues in the US rose by 29% to $450M, which is the strongest growth rate recorded in the last 4 quarters. International revenues grew by 43% to $409M and revenues for PayPal rose by 44% to $247M, which was a slowdown from 59% in the corresponding period.

Total revenues for the quarter came to $1.1bn, up 37% on a year earlier. Net income reached $255M.

It looks like Ebay is recovering solidly. They seem to be firing on most cylinders. Lets see of they can make Skype perform for them too. The spotlight is certainly on them to ensure it does. Ebay have announced that they expect $200M of revenues from Skype next year. They have even sent their CFO over as President of Skype to make sure.

Thurs - Another group combat Google's library plan

The Association of American Publishers (AAP) yesterday filed a lawsuit to block Googles project to scan and digitise books under copyright.

They are now the second group, after the Authurs Guild, which represents 8,000 writers joined some individual authors in a class action lawsuit alleging that the Google Print Library Project violated their copyright.

Googles project which plans to scan and index books from libraries at Harvard, Michigan, Stanford and Oxford Universities, plus the New York Public Library, looks increasingly threatened as the AAP also includes major publishing heavyweights such as McGraw-Hill, Simon & Schuster, John Wiley and Sons and others.

Googles mistake may have been not to have asked permission form these associations before going ahead with their plans. A rival consortium led by Yahoo have made a big point of seeking permission before books are scanned.

Its going to be an interesting race. I don't see Google backing off - the prize is too large. But, I hope they all resolve their issues because I think that both Google's and Yahoo's attemts to digitize and then offer books over the internet is an important step forwards for our society. As long as the books are sold correctly and everyone's copyright protected.

Thurs - Thomas Weisel going public

In a sign that the technology bull market must be returning, one of the niche banking outfits to emerging technology firms is going public.

Thomas Weisel Partners yesterday filed with US regulators to raise as much as $65M in an IPO which should occur in the next handful of months.

Thomas Weisel was founded six years ago at the height of the last tech boom, to provide advisory, underwriting, equity research and brogerage services focused on growth industries such as technology and healthcare.

Weisel's results since the heady days of 2000, where they earned over $100M on revenues just short of half a billion, slumped in 2002, nearly halving revenues from 2000 and have since then gradually recovered to revenues of $283.4M last year, with a small profit.

It will be interesting to see how their IPO goes. But, if you believe that the next couple of years could see a technology bull market, then they should be a good investment.

Wednesday, October 19, 2005

Wed - Intel reports solid 3Q numbers

Intel yesterday announced a solid set of 3rd quarter numbers across the board. Net earnings for the period were just under $2 billion, or 32 cents per share, on overall revenue of $9.96 billion. That compares with earnings of $1.91 billion, or 30 cents per share, on revenue of $8.47 billion in the same period in 2004.

Intel saw a large build up of inventory in their latest quarter which they expect to sell-off in the 4th quarter as they clear the decks for their new dual-core processors coming out early next year. This sounds to me like an early warning that 4th quarter margins could go down a little as they discount this inventory to clear it.

"The combination of our 65nm manufacturing network, broad range of new dual-core processors and unique ability to provide platform solutions positions us well for continued growth," Otellini said in a statement. And the analysts are predicting strong growth of PC and server shipments for the next three months.

Notebooks have become a significant profit center for Intel. In the first quarter of this year, notebook chips accounted for 30 percent of Intel's output. That figure is expected to rise to about 33 percent next year, Intel has said.

This all seems to lead to Intel producing a solid set of numbers for the 4th quarter and the year as a whole. Intel are predicting that they will set a record next quarter by delivering their first quarter with sales over $10bn. Let's see, but it seems highly likely.

Wed - Google to re-brand Gmail in UK and Germany

Following two trademark disputes in the UK and Germany Google is forced to re-brand their Gmail email service to Googlemail in both countries. All new email accounts in both countries will carry the name Googlemail from now on.

It seems as though Google will continue to fight the disputes in the courts. Given that the UK and Germany are the two most important countries for them in the EU, this is a blow to Google.

Mind you, why don't they just buy the companies they infringe off? I'll tell you why - the UK claimant, Independent International Investment Research, a small Aim-listed UK company that supplies financial research, not only argued that the Google service infringes on the trademark of its own G-Mail service in some 80 countries, but the company also said that an independent assessment had valued its rights in the name at £25m-£34m. That means Google could have to pay upto $60M to use Gmail in the UK!!

Wed - Yahoo improves search/advertising technology to catch Google

Terry Semel, Yahoo's chairman and chief executive, said there would be “real upside for Yahoo in the near future” from moves they're making which are intended to close a performance gap with the faster-growing Google.

At present, about 11 per cent of the searches on Yahoo result in “clicks” that produce fees from advertisers, compared to the 20 per cent achieved by Google.

Yahoo is updating its search algorithms in an effort to increase the relevance of its results and boost the click-through rate from users. Other initiatives include improving the matching capabilities of the company’s technology so that it can sell ads linked to more search terms, and launching a new “publishers network” to place ads on other websites.

In the last quarter Yahoo saw a 42% gain in revenues, excluding traffic acquisition costs paid to other websites. At $932m, revenues were $14m ahead of expectations.

It's interesting how Google continues to set the pace for Yahoo. If I were a Yahoo investor I would be happy with this. There is nothing like a bit of competition to focus people's minds and energies. And lets face it Yahoo is responding pretty well.

Tuesday, October 18, 2005

Tues - IBM excells with small & medium sized customers

IBM's latest results, covered in an earlier post, reveals an interesting development. One of the brighter areas of growth was to the small and medium sized (SMB) business sector.

In the SMB market, IBM's 3rd quarter revenues rose a strong 10%, to $4 billion, the second consecutive quarter of double-digit growth. SMB now accounts for 20% of IBM's overall revenues, so it's big enough, potentially, to be a growth engine for the whole company.

IDC expects the global SMB market to increase 7.6%, to $140 billion, this year, compared with 5.6% for the overall tech industry. Growth is happening fastest in emerging economies, including China, India, Brazil, and Russia, where IBM is rapidly trying to expand operations. The company concentrates on outfits within the segment with 100 to 1,000 employees, which is more the medium sized business than the small one.

But, with company's such as Dell moving more into services the question is how long can IBM enjoy this growth and what new products or services will they need to offer to stay ahead in the SMB sector?

Tues - Are mobile phone operators to become media companies

Today 3UK, the UK's fifth largest mobile phone operator has come out of the closet stating that they are leading the charge to become the first mobile media company. 3UK is one of the more important operating companies in Hutchison's 3G telecoms empire of broadband mobile phone networks. And Hutchison has made a big bet on this global 3G network spending $25bn on it to date.

Many mobile industry experts in Europe have spent the last few years knocking 3's ability to be successful. Now, with 3Italy and 3UK preparing for their lucrative IPO's, they must all be eating some painful humble pie. So, the fact that 3UK, with a decent sized subscriber base of 3.2M now talks about being a new kind of mobile operator, focussed on convergence between telecomms and media, should get all the pundits yapping again.

Personally I always thought 3 was an interesting concept. To be the first international mobile operator to launch next generation 3G broadband networks ahead of anyone else was a bold and dangerous move. But, they seem to have largely pulled it off and built a strong and innovative brand in the process.

That they now proclaim that they are the first mobile media network is bold again and potentially allows them to shift the battleground going forwards as their technological lead in 3G is narrowed. Lets face it, this Xmas sees most major operators in the West and Europe in particular take 3G services seriously.

So, can 3UK be right? Will the leading mobile operator of tomorrow be part telco and part media company? I think so. You see, unlike fixed line telco's, the mobile operators run proprietary, closed networks. So, they actually behave more like a cable company than a traditional telco. They own the customer, the billing relationship and the pipe.

So, as cable companies have recognised that content is king and are pouring money into creating their own content, so will the mobile operator, particularly as mobile content has quite different requirements to other channels and mediums.

I believe that a good role model for mobile operators to follow is yahoo. They are one of the best companies in the world at really doing new media. They combine technology excellence with media savvy in an enviable, market beating way. They started by focussing on offering other companies content in the most efficient and comprehensive manner and now they are moving up the chain to generate their own content. Both that created by Yahoo and that created by their millions and millions of users.

So, yes, I think 3UK are making an important announcement. I believe that the most successful mobile operators of tomorrow will be part media company and as a result their branding will be critical. Good on 3, the perennial upstart, to keep pushing the mobile phone industry. They deserve continued success.

Tues - Dell fails to outpace the market for PC shipments

Growth in personal computer shipments at Dell, the US computer maker, failed to outpace the broader market by a significant margin for the first time in seven years in the third quarter, according to two big IT research groups.

Although Dell continued to lead the PC industry in worldwide shipments, its shipment growth rate was 17.6 per cent, compared with an average growth rate of 17.2 per cent worldwide, according to Gartner.

It seems as though Dell is now more focussed on profitable growth than on continued market share gains. HP and Acer had another good performance as they grew above trend.

Gartner predicts PC shipments to grow 12.5% in 2005, but less than 9% in 2006, thanks to a weaker macroeconomic environment and PC makers decreasing abilities to offer substantial price cuts. Could there be surprises from Lenovo? I think so.

Tues - ARM, leading UK chip company disappoints

ARM, the UK chip company, said full-year revenues would be at the lower end of expectations after revealing downbeat third-quarter results.

The company, which designs technology for mobile phones and music players including the Apple iPod, had previously revised its full-year forecast downwards.

Arm had earlier in the year said it expected dollar-denominated revenues to grow by “at least 20 per cent” but in July Warren East, chief executive, said 15 to 20 per cent was more prudent.

A key challenge has been the acquisition in August 2004 of Artisan, a semiconductor technology developer, for $913m. ARM has had to book higher integration costs. This brought net profits down, even on a revenue growth of 44% for the group.

Tues - IBM posts solid results

IBM continued its recovery from a weak start to the year as it reported a bounce in earnings thanks to cost-cutting in its large services division, particularly in Europe.

Adjusted for the disposal of its PC business, which was sold to Lenovo of China earlier this year, Big Blue said that its revenues had crept up by 4 per cent to $21.5bn.

The re-structuring of IBM's services division, which now accounts for 54% of total group revenues, has helped reduce costs, increase margins and increase earnings per share. Solid growth in services bookings is also helping.

Germany and Italy remain weak, reflecting their sluggish economies. IBM is confident that its improved performance can continue into the last quarter of 2005.

Monday, October 17, 2005

Mon - AOL announcement in next few of weeks

AOL's future structure could be agreed and announced in the next few weeks. It looks like the wrangling for AOL between Microsoft and Google will soon come to a fascinating and hi-stakes conclusion.

On the one hand you have a potential join-venture with Microsoft's internet assets in a newly formed company with the AOL portal at the heart, that could even get spun off as a separate entity. The other option sees Google or even recent bidder Yahoo get involved merely as investors.

The conclusion will not only say a lot about how much the suitors are willing to pay, but also about Parsons vision for not just AOL but Time Warner as well. A deal with Microsoft means he wants to unlock value and spin AOL off, and a deal with Google means he is more interested in retaining AOL as an integral part of the Time Warner group. The former could create more short term value and the latter more long term value.

With Carl Icahn breathing down his neck Parsons may be happy to lock in Microsoft and shorter term benefits. And there is a lot at stake. Analysts at Bear Stearns believe the implied value of AOL's portal business in Time Warner's stock price is $8bn. However, if valuations applied to internet groups such as Yahoo and Google were applied to AOL, its portal business could be worth $15bn.

So, as if he needed more pressure, Parsons has a key decision to make. It could define his entire future at Time Warner.

Mon - Sony Ericsson sees strong results

Sony Ericsson, the mobile phone maker, delivered a strong third- quarter performance boosted by its new range of top-end phones, including its new Walkman music-player device.

The company’s third quarter received a boost from the launch of a number of top-end phones, including its Walkman range of music players and a number of advanced camera phones.

Sony Ericsson joins the other leading handset manufacturers in announcing better than predicted results and global handset demand. All of the top 6 handset manufacturers including Nokia, Motorola, Samsung, LG, Sony Ericsson and BenQ Siemens have seen market share gains, proving that the top six are now pulling away from the pack.

Sales growth has come from developing markets as well as faster phone renewal rates for maturer markets with the launch of more sophisticated devices on advanced networks offering email, internet browsing, games, music and camera.

Mon - Nortel names Motorola's Zafirovski as CEO

Mike Zafirovski is to take over as Nortel Networks CEO from Bill Owens.

Owens an ex-admiral and former vice-chairman of US Joint Chiefs of Staff was named CEO 18 months ago when Nortel revealed it had misreported results for 5 years and ousted 10 executives.

Owen's has done a good job stabilising Nortel, but now it seems it needs someone with specific telco business building skills to get Nortel growing again.

Mike Zafirovski was brought in to turn around Motorola's mobile phone business in 2000. He did a good job, but left Motorola in January after being passed over for the CEO job, which went to outsider Ed Zander.

Nortel looks set for a solid year this year as 2nd quarter profits tripled and demand from wireless carriers soared. The company says sales for 2005 will beat analyst expectations. Things look a lot rosier for Nortel going forwards.

Mon - VNU investors arrange showdown meeting

Investors controlling more than 40% of VNU plan to meet the Dutch information company's Chairman on Wednesday to try and halt the company's proposed merger with IMS Health of the US.

Fund managers and institutional investors have cited a number of reasons for blocking the deal, including, execution risk, lack of synergies and VNU's past weak record at integrating acquisitions.

The investors will apparently propose an alternative strategy for the group focussed on improving the performance of the existing businesses and organic growth.

Management at VNU are still stubbornly holding firm on their desire for the deal to go ahead, but there are signs that they're willing to consider various options to salvage the acquisition, including a change in management if the merger goes through. Either way, things are not looking good for embattled CEO of VNU, Rob van den Bergh.

Sunday, October 16, 2005

Sun - Linux for mobile devices given a boost

The Open Source Development Labs, an industry consortium devoted to improving Linux, plans to launch an initiative Monday to bring the open-source operating system to mobile phones.

OSDL's Mobile Linux Initiative is intended to improve Linux for the small, but increasingly powerful, devices. It's also set up to spur development of applications, outline requirements for different cell phone uses and host related open-source development projects.

Linux on mobile phones, like Linux on servers stands a real chance of succeeding versus Microsoft - its up to them, but the wireless operators and handset manufacturers will not give their devices up to Microsoft as happened on the PC - so Linux could be a popular alternative.

Saturday, October 15, 2005

Sat - Yahoo latest to join AOL auction

Well, it looks like Yahoo is the latest to join the auction for AOL. And the rumour mill also states that News Corp have also had a look but decided not to proceed.

A Microsoft or Google/Comcast combination still looks the most likely outcome, but hey, why not increase the number of bidders. And in the mean time Time Warners stock keeps pipping up, which may be what Parsons was after all along.

Now we get to see if Parsons is as good at choosing the best strategic partner for AOL as he is at creating a bidding war scenario. If I was Parsons and all things were equal, I would probably go with Microsoft, so long as the relatinship is v tight and AOl the portal of choice for Microsoft well into the future.

But, hey, for now Time Warner has choices - so it should end well for AOL, which is more than can be said for the last time they did a big deal!!

Friday, October 14, 2005

Fri - Spielberg teams up with EA to make video games

Steven Spielberg has agreed to make three original video games with Electronic Arts. He has signed a long term agreement with the worlds largest video games publisher.

This demonstrates how the games industry has gone from a niche player into a major creative force in the entertainment world. This also reveals how convergence is happening in the media industry as big-budget games are made with Hollywood production values for next-generation consoles.

Splielberg seems fascinated by the interactive nature of the medium as well as presumably by the games industry's recent ability to deliver blockbuster follow-on movies.

Next month sees the release of the Xbox 360 console by Microsoft, which takes video games into a new generation of high-definition quality with increased processing power enabling more realistic movement and movie-like interactions. Sony launches the next generation Playstation next year, featuring their powerful Blu-ray high-definition technology.

Fri - Japan internet company buys into Tokyo TV group

Rakuten, Japan's leading internet mall operator, who was in the press recently for announcing an internet and mobile auction JV with NTT DoCoMo, emerged yesterday as the largest shareholder in Tokyo Broadcasting System, with a 15% holding.

Rakuten has stated that they want to merge with the leading TV network in a move similar to that attempted by Livedoor earlier this year to take over Fuji TV. Livedoor's attempt ultimately failed.

This represents yet another example of internet companies trying to acquire content, much as media companies are currently trying to buy into internet assets. The increasing takeup of broadband networks and even mobile broadband is finally spurring the long predicted convergence of internet companies, media companies and telcos.

Fri - Samsung latest caught in price-fixing conspiracy

Samsung Electronics, the world's 2nd largest chipmaker, has agreed to pay a $300M fine, making it the latest in a string of companies to be fined in the US Justice Department's probe into an international price-fixing conspiracy.

The price fixing occured between 1999 and 2002 and centres upon the market for D-Rams, used in products from computers to electronic games.

Samsung has been singled out as a leader in the conspiracy, but others already fined include Hynix Semiconductor of S Korea and Germany's Infineon. Micron, another chip maker is currently negotiating with the US Justice Department.

Thursday, October 13, 2005

Thurs - Nokia to launch three new smartphones

Nokia is going aggressively after the business sector, starting the beginning of next year, as they launch three new smartphones.

The new phones, dubbed the E60, E61 and E70, will be available in the first quarter next year and are expected to sell for between $420 and $540. They will compliment the Nokia Communicator series that has sold over 1M units in the last year.

The phones will all have push email, able to access RIM's service, Nokias new email service and others. Some come with fold out key boards able to compete better with the Blackberry device.

They will be able to access GSM, 3G, Wi-Fi and Bluetooth networks. Nokia believes that there is huge potential in coporate smartphones and handheld devices, with corporate mobile email as the killer application. Today only 8M corporate mail boxes are accessible by mobile devices out of a total of 650M corporate email users.

Wed - Google and Comcast to bid for AOL stake

Google and Comcast have teamed up for negotiations to take a joint minority stake in Time Warner’s AOL internet portal unit.

The approach by Google and Comcast pits them against Microsoft, which for several weeks has been in talks with Time Warner over a similar deal, and indicates that Time Warner is serious about selling a stake in AOL.

Wrangling over AOL will get heated. I wonder if Parsons is planning a deal with all of AOL or whether he plans to split AOL in two? The ISP and the ad based internet portal. Lets see.

Wed - Ok, ok, ok so its a video iPod after all

Finally the debate and soothsaying can end. Apple has had their day today and as many pundits predicted, including myself dare I say it, they will next week start shipping a video iPod, cunningly just in time for the Xmas rush.

Both Disney and Apple made the announcement today at an unveiling of the video iPod in Silicon Valley. The device, features a 2½in colour screen and can hold up to 150 hours of video as well as music and photos. Disney content for both TV and films are featured strongly as well as Jobs' Pixar productions.

Movies will sell for $1.99 per download and the video store opens for business with 2000 films. The video pods will look like large iPods in black and white versions, retailing for $300-$400.

So, lets all see how they do starting next week. Expect a stong start selling to Apple supporters and iPod lovers in particular. The key is how well they sell through Xmas and beyond. I still have my doubts, but am happy to be proved wrong!!

Wednesday, October 12, 2005

Wed - Microsoft and Yahoo announce making their messaging services talk to eachother

Microsoft and Yahoo have today announced a landmark agreement which allows users of their competing messaging (IM) services to be able to talk to eachother.

By making their competing IM services interoperate they will create a huge challenge to AOL's IM. Lets see how others respond - particularly AOL and Google.

Wed - iPod and Nano drive Apple profits

Strong sales of Apple's iPod portable digital music player and strong demand for the miniature Nano player launched a month ago helped Apple quadruple fourth-quarter profits.

Nevertheless, Apple's share price tumbled due to a general disappointment in overall sales figures and Ipod shipments, as well as thanks to a general sell off of technology stocks due to concerns about earnings statements going forwards.

Mind you, Apple sold 6.45M Ipods in the last quarter as well as 1.24M Macs. The underlying fundamentals for Apple going into the key Christmas buying season look pretty good to me. And, what are Apple announcing today - a video Ipod??

Wed - AMD beats sales expectations

AMD yesterday beat market expectations with record third quarter sales driven by a 44% increase in revenues from microprocessors. AMD is still benefitting from the technology lead over Intel in developing faster chips that use less power and 64-bit computing with dual-core processors.

Mind you, Intel responded on Monday with the launch of similar technology, so things might get tougher for AMD going forwards. They're just going to have to keep on innovating to continue to chip away at Intel's huge market share.

Wed - Auctin venture to take on Yahoo in Japan

NTT DoCoMo, Japans No 1 mobile phone operator, and Rakuten, a leading internet mall operator, have announced a joint venture in internet auctions to take on market leader Yahoo in Japan.

Rakuten will spin off their internet auction venture and set up a new company called Rakuten Auction. NTT DoCoMo will then pay $36.8M for a 40% share in this entity.

The JV is aimed at increasing auction transactions on mobile phones. This proves that as 3G is rolled out mobile phone operators are having to work increasingly hard to try and stimulate internet useage on mobile handsets, which is still low.

The question is, will the mobile phone operators have to increasingly create and invest in mobile applications and content services directly to ensure success and higher revenues with 3G?

Wed - Infosys predicts more big deals

More European banks could take a lead from ABN Amro and award large outsourcing contracts to Indian technology services companies according to Infosys, India's second largest technology company.

Infosys has just announced better than expected results in their latest quarter and have raised their guidance going forwards.

It is interesting to see how Asia is lining up to compete globally in the technology sector, with India as the technology services giant, Japan and S Korea as the consumer electronics giant and potentially China as the new hardware giant.

Wed - Europe's leading online dating agency to IPO

Meetic, the online dating agency is due to IPO in Paris tomorrrow. The company was founded four years ago and has fast become Europe's largest online dating agency with 24% of the market.

Looks like the heady days of the dotcom bubble may be returning as Meetic is being given a valuation approaching $350M and they hope to raise between $90M and $120M selling just over a third of their capital.

They plan to spend the proceeds on acquisitions in the twelve countries that they operate in. Their price looks high at around 13 times sales, but, hey, they've made a huge amount of progress in 4 years and lets face it online dating has got to be a hot sector going forwards.

Wed - Time Warner board under fire again

Carl Icahn, the billionaire activist shareholder, has stepped up his criticism of Time Warner's board and Dick Parsons, Chairman and CEO.

Icahn is now complaining about the composition of the Time Warner board, saying that it still has too many people who were around when the fated merger with AOL was concluded. He would like to see fresh blood on the board.

He also seems concerned that Warner Music was sold at a discount and now depriving Time Warner of an important asset.

Time Warner's next AGM is in May 2006. Dick Parsons has until then to put in place effective strategies to keep shareholders at bay. Making more of a success of AOL and possibly securing some kind of partnership for the ISP/portal, such as with MSN, as well as raising Time Warners share price are essential steps.

Wed - Microsoft pays out for last private law-suit

Microsoft yesterday paid RealNetworks $761M in an agreed settlement and brought to an end the long string of private law-suits over the last eight years stemming from anti-trust cases.

The settlement silences one of Microsoft's few remaining outspoken critics as RealNetworks had campaigned aggressively to attain restrictions on Microsoft's ability to include its media player as a default icon in Windows.

Mind you, Microsoft won the battle over media players a while ago, forcing RealNetworks to change strategy and become a provider of multimedia content rather than a software company.

As a part of the wider agreement with RealNetworks, Microsoft's MSN service will promote RealNetworks online subscription music services, Rhapsody, as well as its digital games.

But, its Microsoft who really wins yet again, paying out cash to keep competitors at bay, often after they have beaten them, while the courts just keep 'reviewing matters' whithout fundamentally changing Microsoft's market behavior.

In the past eight years Microsoft has settled eight private anti-trust cases for a total of $3.73bn.

Tuesday, October 11, 2005

Tues - Intel launches dual core processors

Intel has begun shipping its first “chips with two brains” for servers running with two processors inside.

The world’s biggest chipmaker said its new product, which trails a similar offering by its rival Advanced Micro Devices by several months, would offer a 50 per cent improvement in performance.

Its dual-core Xeon processor for dual-processor servers will effectively provide four machines or eight threads for a computer to divide its workload and offer better performance with lower power requirements.

Intel has had to pull forward their planned launch of dual processors thanks to the success AMD has been enjoying in the x86 server segment. Intel is being aggressive with pricing, which may force AMD to respond. The questions analysts are asking themselves is whether this is just stop-gap technology from Intel or a real advance in their processor architecture.

But, Dell have announced buying into Intel's Xeon processors. With AMD yesterday stating that they plan to triple their manufacturing capacity, and Intel's pricing of the Xeon processors out of the gate - I smell a potential price war around the corner for the No1 and No2 computer processor suppliers.

Tues - PartyGaming in trouble again

PartyGaming shares fell 10% yesterday as the internet poker operator changed its relationship with Empire Online, the marketing group that seems to get them a lot of their players. The news also stuffed up Empire's shares that fell more than 33%.

Goes to show just how jittery investors remain of the online gambling sector - particularly as legal issues with US players remains an unsolved mystery. ParyGaming seems to be the lightning rod for much of the investor angst. Their share price last tumbled on a couple of months ago as thery had to announce a surprise slowing in player growth rates.

And just to keep the fun going for those of us watching online gamblings public company shenanigans - Trident, an Isle of Man-based sports betting and technology company looks like their to go public as they announce their planned IPO next year that could value them at just under $200M. Watch this space - its better than any Disney roller-coaster.

Tues - Strong demand for flat-screen TV's leads to shortage

Stronger-than-anticipated demand for large-size flat-screen TVs has led to a significant shortage of the big LCD flat panels that are their main component.

Despite concerns that rapid growth in LCD production capacity would lead to an oversupply of panels, there seems to now be a shortage of around 15-30% according to Sharp, the world’s largest maker of LCD TVs.

Shame, that could mean large flat-panel TV's will remain expensive for longer than they needed to.

Monday, October 10, 2005

Mon - Technology vendors collaborate on faster Wi-Fi standards

A group of 27 technology companies said today they would collaborate on a new, faster Wi-Fi wireless Internet connection standard for computers and other portable devices. The alliance, called the Enhanced Wireless Consortium, joins previously separated camps that were heading toward separate standards for wireless networking.

It includes some of the biggest wireless chipmakers such as Broadcom and Intel as well as Cisco and portable computer makers Lenovo, Sony and Toshiba.

"It is possible to have the standard ratification done by late 2006, if we can accelerate. It's reasonable to expect products out before then, in the first half of 2006," said Bill Bunch, director of product management at Broadcom.

Hey, bring ot on guys. Let's hope they can stay on track.

Mon - Growth in mobile handset sales set to continue

Nokia has stated that they believe that the growth in mobile handset sales is set to continue into next year, defying analyst predicitions of an imminent slowdown.

Analysts believed that over the next couple of years worldwide sales would slow markedly from the 30% growth seen last year. This is because of saturation in ownership levels for mobile phones in developing countries.

But, Nokia believes that the analysts have underestimated the frequency with which maturer markets are willing to replace handsets, thanks to newer technologies such as 3G and smartphone devices for mobile email and internet surfing. Nokis also believe that there is considerable demand for cheap handsets from developing regions such as the Middle East, the Gulf and Africa.

Nokia are having to review their volume numbers upward month-by-month. Nokia, last month, raised their guidance for 3rd quarter earnings. And they believe that next years growth will be strong too. Nokia does also seem to be benefitting from a successful restructuring over the last couple of years and their new initiatives into smartphones and the corporate sector.

Mon - Ericsson considers move for Marconi

Ericsson, the Swedish group, is talking to Marconi Corp's advisers about a possible deal to buy the UK telecommunications equipment maker. Marconi has been talking to a number of possible suitors since their shares slumped following the loss of a critical contract with BT to Ericsson on price.

Marconi has been struggling to complete a deal with another buyer due to concerns over national security surrounding Marconi's defence contracts and their pension fund deficits.

But, Marconi could be a reasonable strategic fit for Ericsson, who is trying to develop BT as key strategic account. And they should be able to strike a hard bargain with Marconi shareholders.

Mon - AMD to triple capacity

Advanced Micro Devices (AMD), long the distant number 2 manufacturer of computer processors after Intel, will this week open a new manufacturing plant that will more than triple its current capabilities when its fully up and running.

Its Fab 36 factory opens in Dresden, employing around 1,100 people at capacity and will produce chips made on 300mm silicon wafers.

It will take around three years from now for AMD to be at full capacity, but starting next year they'll be able to better compete with Intel. One example cited for AMD's drive for extra capacity is that Dell does not use AMD processors, stating their lack of scale to meet Dell's needs. This extra capacity should remove that issue with the No1 PC supplier.

Intel is also increasing their capacity by a further 15% as they introduce two new 300mm facilities. The real question is, will all this extra capacity from Intel and AMD just soak up increasing demand, or could it spark a price war starting in 2006?

Sunday, October 09, 2005

Warner Brothers to back Sony's DVD format?

Rumours seem to be milling around that Warner Brothers may be willing to throw their weight behind Sony's next generation DVD format, called Blu-ray. If they do, this could be a major step in Sony's attempt to defeat Toshiba in the much contentested battle for the DVD format of tomorrow.

Backing from Warner Bros would add to the existing support for Sony's Blu-ray from Fox and Disney, plus of course studios owned by Sony. Lets hope one of these days the industry choses one of the formats so we're not left having to chose between two, which would be bad for everyone.

What's Apple announcing next week?

The Mac faithful are sure Steve Jobs has something big to announce on Oct. 12. An iPod video device? Maybe a new Mac lineup? Or both?

Apple Computer has summoned journalists and analysts far and wide to an unveiling of "just one more thing." The e-mailed invitation includes a curtain that looks suspiciously like those found in movie houses, fueling speculation that the Oct. 12 event concerns a souped-up version of the iPod that can play movies.

Well, no point in me joining the throngs of Apple speculators, there are plenty of those, in trying to figure our what's up Apple's sleeve for Wednesday. I would just like to express mm view should it actually turn out to be the unveiling of the much hyped iPod video device.

My concern is that the market may not be as ready for a video iPod than they were for a music iPod. I just think that those clamouring so vocally for video may actually prove to be a small, niche group of early adopters. And Apple may get burned if they invest too much in video handhelds too early. It could be years before the mass market or technology is really ready for iPod video. Hey, but that's just my view.

Friday, October 07, 2005

Fri - Accenture prove corporate tech spending rebounding

Accenture has just posted results for the three months to the end of August way ahead of even their latest estimates, proving that the rebound in corporate sepending on technology may be broadening.

The consultancy and outsourcing giant saw the strongest rebound in their American business, where they saw a 22% jump in revenues, as opposed to a 4% increase seen in the preceding 3 months.

Their financial services business was apparently the best performer, reflecting the strength of the investment and retail banking sector in particular.

Accenture stated that they are not seeing an eroding of margins in their higher margin consulting and systems integration business with increasing competition from low-cost Indian competitors.

All the same, Accenture is building their Indian division aggressively, hiring 1,500 employees there in the last quarter, bringing their total Indian workforce to 15,000. They expect to continue hiring at the same rate going forwards.

Fri - UK's 2nd largest telco C&W slumps

Cable & Wireless lost almost a fifth of its value today after the UK telecoms company forecast a 6% drop in first-half revenue at its core UK business, which the market has interpreted as a profit warning.

Britain's 2nd largest fixed-line telecoms company said the performance was in line with its expectations, but noted a worsening shift in its revenue mix from retail to carrier services, with weaker margins in the retail business.

The company, which last month announced the acquisition of smaller UK corporate telecoms rival Energis for up to 674 million pounds, said it had seen some loss of momentum in sales planning since the announcement of the Energis deal.

It just goes to prove that being a predominantly fixed line telecoms operator today is not a great place to be - and it will only get worse as prices falls and competition accellerate.

Fri - worlds largest contract chip firm posts record sales

TSMC, the world's largest contract maker of microchips, posted record high monthly sales in September, as clients rush to launch products like video mobile phones and games consoles in time for Christmas.

Its main competitor, United Microelectronics, also reported its highest revenues in nine months, after customers digested excess inventories in the first half and began placing new orders.

Hot demand for chips used in consumer-oriented products like third-generation (3G) mobile phones, flat-screen televisions and Microsoft's upcoming Xbox 360 game console has been helping to drive sales in the third quarter.

Thursday, October 06, 2005

Thurs - AOL announces buying leading blogging site Weblogs

AOL announces buying leading blogging site Weblogs. The 85 blogging sites that AOL is getting as part of its purchase of Weblogs Inc. let users read about everything from travel to technology and debate on topics like parenting and movies.

The move comes as AOL, facing drops in subscriptions as its traditional dial-up business declines, focuses more on offering free content to attract a larger audience and create more advertising space.

AOL, a division of Time Warner Inc., is apparently paying $25 million in an all-cash transaction.

Thurs - an all new browser enters the market

On Oct. 5, a Palo Alto-based startup called Flock takes the wraps off what it's calling a "social browser." Unlike plain-vanilla browsers such as Microsoft's Internet Explorer, Flock's browser is built specifically for a new, emerging generation of Web users, one that isn't satisfied passively browsing media online.

Flock hopes to turn the browser into a dashboard for collaborating, blogging, sharing photos, reveling in a raft of other group activities that have recently caught fire online.

The reviewers are raving about Flock's approach both in terms of innovation and technology. And Flock are just the latest in a series of attempts to challenge Microsoft's dominace in the browser space. Mozilla's Firefox and Opera are innovating well and gaining traction. Mind you, it's always dangerous to try and challenge one of Microsoft's monoploy products - but, with open source solutions and momentum, there may be more to these challenges.

Thurs - UK scientist to monitor Microsoft compliance

Microsoft and the European commission yesterday closed off another chapter in the saga of their six year antitrust battle, as the Brussels regulator has appointed a British computer scientist to monitor the software giant's compliance with last years landmark ruling against the US group.

If he finds Microsoft in breach of last year's decision, the commission could impose fines of up to $5M a day. This looks like more tough news for Microsoft. Let's see if they're playing ball.

Thurs - Second group of private equity firms try to buy TDC

TDC, the Denmark-listed telecoms group has received a second approach from a private equity consortium.

The four member team of Apollo Management, BC Partners, Cinven and Silver Lake could end up sparking a bidding war for the $14.4bn telecoms group with the original consortium of Apax, Blackstone, Permira, Providence and KKR.

The Apax consortium has bid DKr355 a share, which has probably been matched by the rival team.

And it's still possible that trade buyers could enter the fray, such as Swisscom, the Swiss telco. But the general view is that this battle could well end up getting won by one of the private equity groups.

Well, they've got to win one, they've already lost out to trade buyers in trying to buy other European telecom companies, notably Italy's Wind and Spain's Amena.

Thurs - Yaahoo acquires local event site

Yahoo has acquired, a local event planning website. This move should put pressure on peers to provide local services such as online Yellow Pages, classifieds, maps and social networking. has established itself as a leading event site that harnesses the power of user-generated content and social media to capture localised event information and improve the relevance of local search results.

Upcoming uses a collaborative approach, where users enter details of events they are attending, add comments on other events and receive suggestions on events they may be interested in based on their previous choices.

Wednesday, October 05, 2005

Wed - HP not planning to spin off printer business

Mark Hurd, recently appointed head of Hewlett-Packard has rejected calls to spin off the highly profitable printer business.

He does not believe that HP is more valuable broken up. Instead, he wants to ensure that the division has room to grow more vigorously, particularly now that it faces greater competition from Dell.

Hurd says that they will spend more on R&D at the printer dividion and get more aggressive with it. HP is already creating painful waves in the market through cut-throat printer pricing.

Mr Hurd aslo stated that he has no plans to spin off the PC business as it underpins much of the other businesses at HP. So, it looks as though Hurd plans to keep Ms Fiorina's strategy in tact, instead focussing on making all the HP businesses perform better and integrate more efficiently. We think he is on the right track. Results seem to be showing through already.

Wed - Macquarie to list global media fund

Macquarie Bank, Australia's largest investment bank is raising $760M through the listing of a newly created international media fund. It looks like they will immediately roll into the fund 85 commercial radio licenses they own in several Australian cities.

This media fund is a way for Macquarie to capitalise on expected changes to Australia's media law next year that will allow more room for cross-media M&A, as well as an increasing appetite for media assets given the growth of broadband and digital networks in particular.

The fund will seek controlling interests in its investments, or at least significant influence. The fund is eyeing media assets in the UK, North America and Asia.

Wed - Arm unveils new mobile processor

Arm, the UK chip designer has announced a processor, called Cortex-A8, that will provide desktop PC like performance to mobile and electronic devices. The Cortex-A8 processor should offer speeds of up to 1 gigahertz and consume less than 300 milliwats of power.

Arm have further announced that 5 licences of Cortex-A8 have already been sold to Freescale, Matsushita, Samsung and Texas Instruments.

Wed - Motorola signs Universal to its wireless music service

Mobile phone maker Motorola yesterday signed up Universal, which has performers such as Eminem and Mariah Carey in its catalogue, for iRadio. This is a wireless music service to rival Apple's iTunes, which Motorola is planning to launch in 2006.

The big question is whether 2006 will start to see mobile phones become mass market digital music players to rival dedicated digital music players such as Apple's iPod. Given the lack of effective mobile music handsets today, I suspect you will not see mobile music devices sold in large volumes until 2007.

Tuesday, October 04, 2005

Tues - Google & Sun link online to compete with Microsoft

Google and Sun link online to compete with Microsoft. Google and Sun Microsystems have just announced a partnership in which they plan to make available online Sun's word processing and spreadsheet software through Google's websites and toolbars.

In a move that clearly competes head on with Microsoft's Office software package, the project will allow access to Sun's Openoffice files and work on projects from any PC.

Sun's Openoffice is also now a viable alternative to Microsoft's Office after solid reviews for its latest release. Given that Microsoft's Office costs around $300, there should be strong demand for the Sun/Google offering which will presumably be free or cost very little indeed.

Tues - Digital music sales soar in first 6 months of 2005

Revenue from digital music sales has soared, more than tripling in the first six months of 2005. This partly offset a decline in overall music sales.

Overall digital music sales reached around $790M for the first half as opposed to $220M during the same period a year earlier.

The figure represents 6% of total record industry sales, which overall are still declining, and was driven by the growing availability of broadband, portable music players and 3G mobile phones.

The music industry has experienced sales declines in four of the past five years, amid a scourge of piracy. Yet executives seem heartened because of legal decisions this year against Grokster and Kazaa amongst others, as well as market research that suggests there is a growing willingness by consumers to purchase music legally online.

Tues - KPN share price rises 7% on Telefonica rumours

KPN shares rose 7% to a four year high yesterday following a report that Telefonica, the Spanish telecoms group, was considering offering Euor20bn for the Dutch operator.

Tues - Sony fires back the latest salvo in the battle for next generation DVD

Sony has claimed the latest victory in the almost daily salvo between the Japanese electronics flagship and rival Toshiba for the next generation high-definition DVD format.

Today Sony tells us that Paramount Pictures has expressed support for their Blu-ray Disc DVD by saying that it will release titles capable of being played on that format. Last December Paramount announced that they would release titles on Toshiba's competing format. So, it is not yet clear whether Paramount intends to support both formats or has now chosen to switch to Sony's Blu-ray.

Winning over the movie studios is the key to deciding which format will ultimately win. Up until Paramount's moast recent decision, the studios seemd evenly split in their support of the two formats. But, with Paramount's backing Sony has now stated that 60% of US filmmakers have declared their support for Blu-ray.

Among other Hollywood studios, Walt Disney and Sony Pictures Entertainment back Blu-ray, with Universal Pictures and Warner Bros supporting Toshiba's HD DVD.

Tues - Micro chip record predicted

Global chip sales are on track to beat their record year of 2004 according to the Semiconductor Industry Association.

The body reported that sales rose sharply in August to $18.6bn, up 3.2% from the $18bn reported in July, and 1.7% higher than the $18.3bn recorded in August 2004.

Year-to-date chip sales were $144.4bn, up 5.8% on the 2004 running total at this stage of $136.5bn.

PC unit sales are running ahead of earlier forecasts, boosting sales of microporcessor and D-Ram chips. Flash memory sales have also risen sharply thanks to the growth in sales of mobile phones and consumer electronic products like MP3 players.

Monday, October 03, 2005

Mon - Telefonica in talks to acquire KPN for Euro20bn

Telefonica of Spain has apparently approached KPN about acquiring the Dutch telecoms operator for around Euro20bn.

If such a deal were to go ahead it could lead to the biggest shake-up of the European telecoms industry for years. It would also create another sizeable pan-European player to rival France Telecom, Deutsche Telekom and Vodafone.

Both Telefonica and KPN are denying the rumours.

Mon - Blinkx internet TV service goes live

Blinkx, the search engine, is today launching an internet TV service which allows users to build their own channels. also allows content owners, including existing TV networks and video bloggers to upload shows and have their media files hosted free of charge by Blinkx.

The channels can be created according to subject and the content streamed live or downloaded for later viewing, while being continuously updated.Blinkx can apparently also enable a payment system if contributors wish to charge.

This sounds interesting. It's good to see another step in internet video coming together. Still a long way to go though.

Mon - Toshiba's disk format given China boost

Two of China's largest manufacturers of DVD players have decided to make products that are compatible with the high-definition standard developed by Toshiba. This decision gives another lift to Toshiba's standard after Microsoft and Intel recently supported Toshiba's format.

The battle between Toshiba and Sony for next generation high-definition DVD formats rages on, with both announcing support from key segments of the industry. But, the most significant players, the movie studios, remain split.

Mind you, given that cost effective Chinese DVD players dominate the global market, this could prove to be a critical step for Toshiba.

Mon - NTL buys Telewest for $6bn

NTL has confirmed that it's buying rival UK cable operator Telewest for about $6bn.

The deal should help them compete better with rivals such as BT and Sky and should allow them to better afford to roll out new services such as HDTV, VoD and VoIP.

Sunday, October 02, 2005

Sun - NTL, leading UK cable operator, to buy Telewest for $5.8bn

NTL and Telewest, the rival UK cable operators, are expected to announce this week their long awaited merger.

The two sides are said to be close to signing a deal, involving a cash and shares offer by NTL for Telewest at $23-24 per share, thus valuing the smaller group at $5.6-5.8bn.

The combined group could present a powerful challenge to Sky's business in the UK.

Sun - Google to leap into Telecoms?

Google, the Californian search company has filed an application to provide a free wireless internet service to all of San Francisco. The mayor wants the free service to allow all income groups to access the internet in the city. More than a dozen other firms are competing with Google.

If Google gets the go-ahead, San Francisco could prove a testing ground for Google to potentially launch a national "wi-fi" service. Industry experts believe Google is trying to ensure that people can connect to its search engine anytime, anywhere. Google is remaining quiet on the matter.