Just two days after the Department of Justice filed antitrust charges against Apple and major book publishers, Apple has responded to the claims. Contrary to the three book publishers who signed settlements immediately, Apple seems to want to fight this to the end. The other two publishers are also fighting the claims.
Apple spokesman Tom Neumayr:
The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore.
The response is similar to those of Penguin Group and MacMillan. The pricing of books and apps in Apple's store is set differently from music. The prices for books and apps are set by the publishers whereas the music is set by Apple. It will be interesting to see how this plays out. More as it comes.
Activision Blizzard is the latest casualty in the patent wars, being sued for virtual world infringement
Worlds Inc. has begun a lawsuit against World of Warcraft creator Activision Blizzard. The firm asserts that games like World of Warcraft and Call of Duty infringe on its patent regarding a "system and method for enabling users to interact in a virtual space." The patent seems extremely broad, but they did manage to use it to get a settlement out of NCSoft for City of Heroes in 2010.
"Technologies created by Worlds have helped the businesses of virtual worlds gaming and the sale of virtual goods to grow into a multi-billion dollar industry," said Worlds CEO Thom Kidrin. "While we are pleased to see that the gaming industry and its rapidly growing customer base have enthusiastically embraced our patented technologies, we deserve fair compensation for their use."
It will be interesting to see how this plays out in court. If this patent is truly infringed upon by World of Warcraft and Call of Duty, I think many other games would also be considered infringing. That said, I haven't read the patent in full detail. It's scary that a patent can be this broad. It stifles innovation.
Google's acquisition of previous powerhouse smartphone maker, Motorola, was approved by the Justice Department in February. There was much talk that Google acquired Motorola for their roughly 17,000 patents they held. Just two months after the acquisition, rumors are circling that Google are looking to dump the entire hardware division.
The Wall Street Journal has tapped the keys on their keyboards and are claiming that Google are already looking to sell their cable set-top box business, and that they've offered the handset division to China's Huawei at a premium. At the moment, Google licenses their Android open-source operating system to 55 manufacturers across the world.
This is where Google run into problems: owning the Motorola hardware division means they could risk relationships with these OEMs, if they were to move forward with developing "in-house" hardware. Other manufacturers could see this as a bias toward Google owning the Motorola hardware division. Getting rid of it, would calm the nerves, obviously. Senior vice president of mobile for Google, Andy Rubin, has actually addressed concerns over this at Mobile World Congress in Barcelona.
Google have just announced a plan in which we'll see the company split its stock in an effort to preserve its corporate governance, and still give co-founders Sergey Brin and Larry Page control of the company. This will create a 2-for-1 stock split, where Google have said it will create a new class of stock, Class C, that won't sport any voting power.
Any share holders of Google with Class A or Class B stock will automatically receive a share of the new Class S stock. This new class of shares will trade under a different ticker symbol. This new deal is said to preserve the voting power of Google co-founders. The stock proposal was announced as Google reported a first-quarter profit of $2.89 billion, or $8.75 a share, from $1.8 billion, or $5.51 a share, twelve months ago.
Excluding one-time charges and other items, Google's profits sat at $3.33 billion, or $10.08 per share, compared to last years $2.64 billion or $8.08 per share. Google easily beat Wall Street estimates which pegged them at $9.65 per share. Revenue-wise they were not too bad at all, hitting $10.65 billion, a 24-percent increase over $8.58 billion year-over-year. After backing out traffic acquisition costs, revenue amounted to $8.14 billion, missing Wall Street expectations by a slither, pegged at $8.15 billion.
Sony have been struggling over the years, and much more so in the last year or so. We know this, and with newly-appointed CEO Kaz Hirai steering the ship that is Sony, they are now hoping a new set of initiatives designed to revitalize the sluggish business will help. The new strategy is called "One Sony".
One Sony is said to focus on games, mobile and digital imaging in an effort to generate roughly 70-percent of Sony's total sales from these three divisions. Hirai's first big move is One Sony, and from his previous position within the PlayStation division of Sony, he is adding new titles to their downloadable catalog for the PlayStation Vita as well as the PlayStation 3, and will also improve subscription services on the PlayStation Network.
On top of this, the company is preparing better games for their tablet lineup and Vaio-based devices, as well as leveraging their accessories and peripherals market. Sony hopes to generate revenue of around $12.4 billion through gaming by fiscal 2014.
In the digital imaging market, Sony hopes to reinforce its development of image sensors, signal processing technologies, lenses and other key digital imaging technologies and leverage them in both its consumer products and broadcast/professional equipment. Sony are also talking of restructuring their television industry, and are said to be looking into expanding business into emerging markets like Mexico and India.
When Facebook had announced they purchased Instagram for $1 billion, I was shocked, but not so shocked all at the same time. I had realised how popular Instagram was, and would get, but $1 billion from a company as powerful, as influential as Facebook? Just strange. Unless you wanted a ready-made, photo-sharing application and its creators, IP and everything else, so that your competition, Google and Twitter, couldn't scoop the opportunity before you could.
It's being reported that Facebook CEO Mark Zuckerberg had called Instagram co-creator Kevin Systrom just after Instagram had secured $50 million in venture capitalist funding last Thursday, which pegged its value at $500 million. Zuckerberg called Systrom making his offer known, and by the end of the weekend Facebook acquired Instagram for double their pegged value.
How did Facebook make the deal so quickly? Well, Zuckerberg has majority voting power, where his Class B shares equate to over 57-percent. This makes his decisions kinda final, and his influence over them quite powerful. Most of his suggested plans would go through, unless he had a change of heart or a deliberate abstention from the voting process itself.
It's pretty hard to find a site on the internet these days without some sort of advertising. The larger the site, the more it costs to run and the more income the site needs to have. Tumblr receives and incredible 4.5 billion impressions each week which makes it one of the internet's biggest destinations.
Incredibly, Tumblr has zero ads on it and they plan to keep it that way. Hosting servers for 4.5 billion impressions a week isn't cheap, so the company is trying to find a way to make money and become self-sufficient. Right now they are simply running on investment dollars, something that can't go on forever.
CEO David Carp has said in an interview that the site does not want ads. He says that Tumblr is "selling our desks to avoid that, it's a complete last resort." That's some dedication to keeping the site ad free, but can it really work? Karp and Tumblr are hiring a professional revenue executive to help monetize the site.
They have started selling highlighted posts for $1, which is basically a form of advertising, but not in the traditional sense. I really hope Tumblr can come up with an ad-free model that can then be copied by other sites across the web. I'm sick of being the 1 millionth visitor to every site I visit.
In an interesting turn of events, the US Government has filed papers objecting to Megaupload's legal firm choice. Last week, it became known that Megaupload had retained the services of Andrew Schapiro. Schapiro is the same lawyer who led YouTube to a summary judgment in its copyright trial against Viacom.
According to TorrentFreak: "In a new court filing the US government complains that Schapiro's past record in copyright cases, and that of Quinn Emanuel as a whole, present a series of conflicts of interest." Mainly, the government is concerned about a possible conflict with YouTube. Their legal battles against Viacom are back on, and they are also listed as a victim and possible witness against Megaupload.
The government says that Schapiro can't have an interest in both cases. Additionally, Schaprio or the law firm he works for has represented many of the companies that could possibly be called as witnesses against Megaupload. These companies include Google, Disney, Fox, Time Warner, Warner Bros., HBO, and various software companies.
"It is unclear how Quinn Emanuel intends to zealously represent defendants Megaupload Limited and Kim Dotcom while also protecting confidential attorney-client information gained in the course of representing other clients [...] particularly where those clients' interests are directly opposed to those of the defendants," the government writes.
You gotta love social networking. It seems to manage to get everyone into trouble at some point or another. This time it has landed a Turkish pianist under investigation for possibly making statements that are offensive to Islam and, additionally, statements that are offensive to Judaism and Christianity.
Since the Tweets have since been deleted, here is what Zaman reports:
[quote]Say sent controversial tweets questioning whether heaven in Islamic belief is like a brothel or pub because the Qu'ran says there are rivers of drinks and houris [very beautiful women] in heaven for those who commit good deeds while they are on earth.
Say also tweeted about a muezzin who recited the evening call for prayer in 22 seconds, questioning whether he was in a rush to reunite with his lover or go to the rakı table.[/quote]
The prosecutor of Turkey is investigating Say for breaking Penal Code Article 216. That portion of the penal code carries a 6-month to 3-year penalty if convicted. The Turkish pianist studied at the Robert Schumann Institute in Düsseldorf, and has over 67 compositions attributed to him.
We reviewed (in both text, and video) the new iPad, and loved it. But how much does the rest of the world love Apple's latest tablet creation? A lot, it seems. A new study by analytics analyst firm Chitika, has suggested that the third-generation iPads in Internet traffic has doubled since the initial four-day launch window.
The new iPad now makes up around 10-percent of all iPads surfing the web only three weeks after it splashed down. Online tracking metrics aren't a direct method of measuring sales, but it does help. Apple announced four days after the new iPad launched that they had sold 3 million units worldwide, and Chitika have noted that this figure correlated into about 5-percent presence of all iPad traffic, correlating with Apple's own total figure of around 55 million iPads sold up until that point.
If this growth continues, we could be looking at 12 million units sold by the time Apple's fiscal Q2 comes around, and 15 million new iPads sold overall by the end of June. The iPad makes up around 60-percent of all tablets shipped, with online usage rates indicated that in most areas the iPad is responsible for up to 90-percent of tablet web traffic. Some very impressive digits for the Cupertino-based company.
I would like to take my hat off and bow towards Maryland for this new law that they just passed. Usually I'm against new laws, especially for those that should be common sense. However, this one should be praised and passed in every state in the Union. Asking for social media passwords is a gross violation of privacy.
The bill passed the Maryland Senate with unanimous support and only 10 representatives opposed it in the House. The ACLU has joined in the cause after reports surfaced that the state's Department of Corrections had demanded the password of long-time staffer Robert Collins. Other states have followed Maryland's lead and introduced similar bills.
The states are Illinois, California, Minnesota, Michigan, Massachusetts. New Jersey is likely to jump on board soon, too. It's a good day, finally, to be a US citizen and have the government actually do something to help its citizens.
Best Buy has been heading down hill for a while now, and now their CEO has jumped ship. Besides, who better to know how the company is doing and when to get out than the CEO? This announcement by Best Buy comes on the heels of the announcement of the big losses suffered over the past few months and the plans to close 50 stores across the US.
Best Buy's press release states that there were "no disagreements between between Mr. Dunn and the company on any matter relating to operations, financial controls, policies, or procedures." Curiously enough, however, it was still a "mutual" decision that the CEO and company part ways. Director G Mike Mikan has been named interim CEO.
"I have enjoyed every one of my 28 years with this company, and I leave it today in position for a strong future. I am proud of my fellow employees and I wish them the best," said Dunn.
"We thank Brian Dunn for his many years of service to the company and wish him well in his next endeavors," said Schulze. "As we move forward, we are very pleased to have a strong leader with Mike Mikan's credentials as interim CEO."
"The Best Buy team and I will be extremely focused on successfully managing this period of transition. I want to assure our employees, customers and other key stakeholders that we will work together to achieve our company's growth and profitability goals," said Mikan.
The economy can not still be as bad as every seems to think it is. Apple's building a new data center and even spending the extra cash to power it with an alternative fuel. Now, Microsoft has joined into the party. Microsoft is building a new data center in Wyoming at a cost north of $100 million.
Wyoming is hoping that this new project will bring other new data centers to the state. Microsoft has been quite busy with its construction projects as of late. Just recently, Microsoft has turned on two new data centers for its cloud service Azure. It's not clear if this new data center is for Azure or not.
Microsoft announced the construction this way:
To keep pace with growing demand, we are announcing two new datacenter options for Windows Azure. Effective immediately, compute and storage resources are now available in "West US" and "East US", with SQL Azure coming online in the coming months. These new options add to our worldwide presence and significantly expand our US footprint.
It's been floating around that Microsoft is trying to find customers to fill its capacity, but it could be that Microsoft has found enough demand to warrant the continued roll out of. For right now, it's clear that Microsoft is laying out some serious capacity and betting on cloud computing continuing to grow. And I think that's a pretty good bet.
Apple are definitely on their way toward quite an amazing milestone: becoming the world's first $1 trillion company, according to a Wall Street analyst. Brian White from Topeka Capital Markets recently predicted that Apple stock would push past the $1,000 per share barrier in the next twelve months, which would tip the company very close to the $1 trillion mark.
Apple stock has been quite popular over the last few years, with no signs of it stopping. Share prices topped Google's for the first time last week, a milestone that the late Steve Jobs was rumored to be working toward. How could Apple hit $1,000 in share value? Well, it's not that hard at all, really.
Apple's new iPhone could really boost their value, a new iPad that smashes the previous third-gen iPad, iOS 6.0, new MacBooks, iMacs, they're all coming this year alone. On top of this, Apple is opening up in the Chinese market, which is until now, nearly untapped for Apple. It's a huge market, and sure to boost their share prices considerably as iDevices start flooding into the hands of China-based customers.
Next year should see the release of an iTV, with television being a gigantic market in itself, if Apple could do something... magical... or revolutionary... in television, this would surely catapult them past $1,000 per share, and even inching over the $1 trillion value milestone.
We reported on this as it happened, where a RIM employee was stabbed at a party for BlackBerry Messenger, has died from his wounds. Philip Sherriff, one of RIM's UK employees, died on Sunday. His attacker is believed to be Ashley Charles and has already been charged with attempted murder.
What motivated Charles to stab Sherriff is not known, and the court hasn't made this clear, either. RIM has said in a statement through Twitter, where they gave condolences:
Our thoughts are with his family and those close to him and we ask for the respect of their privacy at this difficult time.
Our thoughts go out to Sherriff's friends, family and colleagues. Such an avoidable, yet unescapable event where a life was taken when it didn't need to be. Let's hope they find closure, and justice, soon.
Former Intel engineer, newly-hired AMD employee, pleads guilty to stealing sensitive Intel documents
Biswamohan Pani, a former Intel engineer and newly-hired AMD employee has plead guilty to fraud that is centered around the theft of sensitive Intel documents. The stolen information is considered to be worth approximately $1 billion, which includes chip-related design and manufacturing data.
It's thought that Pani intended to use the information for career advancement, but AMD has denied any knowledge of Pani's wrongdoing, and has fully cooperated with federal investigators. Pani had previously worked at Intel's Hudson-based chip making plant located in Massachusetts before submitting his resignation on May 29, 2008. Pani's last day at Intel was June 11, but little did Intel know he had actually begun working at AMD on June 2, while simultaneously retaining access to Intel's network.
It is thought that during this time, Pani had been downloading sensitive documents that held information on Intel's manufacturing and chip designs. Corporate espionage and intellectual property theft, in the form of trade secrets, schematics, or other proprietary information can be extremely lucrative in the right hands. Investigators have found no links between Pani and AMD.
Samsung's national head, James Politeski has revealed in an interview that the company is planning to launch their own, fully self-run stores in Canada. He told Canada.com that the company will have dedicated stores at parts across the country, and like Sony and Apple, will have specific designs and train staff itself, but Samsung would outsource the actual management to unnamed companies.
Politeski didn't reveal whether the new Samsung retail stores would have their own service areas, which for Apple, have been very successful. Locations weren't given, either, but hints have suggested the first store would arrive in Yorkdale Mall, West of downtown Toronto. The mall is noteworthy in the way that it was the home of Apple's first retail store in Canada.
Samsung will want to have their own stores to push their own branded products, by staff who are trained in only Samsung products. Compared to bigger retailers such as Best Buy where they've been blamed for damaging brands by burying products in large display sections, have employees who don't have much technology experience, or knowledge in that particular brand.
Not looking to be left out of the fun, Microsoft has acquired more than 800 patents from AOL in a deal worth $1 billion. AOL's stock surged 45% on the news of the deal and the fact that a "significant portion" will go directly into the hands of share holders. Patent advisory firm M-Cam Inc. values AOL's patent portfolio at $290 million.
"Most on the Street viewed $300 million as the likely maximum value," explained Benchmark analyst Clayton Moran. "Relative to this expectation, AOL has created $7.63 per share in stock value." Because of this, the analyst believes a one-time dividend would be in order.
The sale will leave AOL with a license to use the patents as well as leave Microsoft with "a nonexclusive license for Microsoft to AOL's remaining portfolio of 300 patents, which include those for advertising, search, content generation, social networking and mapping technology." It will be interesting to see if Microsoft joins in the patent trolling.
Sony isn't doing very well. According to one report, they haven't been profitable in 7 years. Another report pegs that number at 4 years. Either way, it paints a bleak picture as to the standing of the once giant company. A new report by Japanese newspaper Nikkei says that Sony is preparing to layoff 10,000 workers.
10,000 workers is 6 percent of Sony's entire workforce. And this isn't the first time that Sony has made large layoffs such as this. Sony previously laid off 10,000 workers in 2005 and killed 8,000 temporary positions in 2008. But even those cuts weren't enough to save its TV business. These forthcoming cuts are expected to address the TV division as well.
More news will be forthcoming this Thursday when the new CEO, Kaz Hirai, addresses investors. The plan should include Sony focusing on its core businesses, but it's not exactly clear what those are. This is just a rumor as of right now, but we expect it to be confirmed this Thursday. More as it comes.
With all the fanfare that Apple often brings to a financial discussion, it's odd to hear the words "Apple" and "downgrade" in the same sentence. But those two words found themselves together in a sentence released by BTIG Research's Walter Piecyk when he downgraded Apple's rating on the company's shares from "buy" to "neutral."
And why shouldn't he? There is plenty for investors to be worried about in the company. First, they no longer have Steve Jobs. Old news I know, but it still has an effect on the company's future. More importantly, though, is that wireless carriers are getting fed up with the subsidies that they give to new iPhone buyers.
Carriers are taking a cut in their profit margins while Apple continually earns larger and larger portions. Take a look at AT&T: in 2010, AT&T's margin was over 44% but now are hovering around only 30%. "We expect post-paid wireless operators to remain firm in their plan to stunt the pace of phone upgrades in 2012 and we expect to see some initial evidence of their success in the current quarter," Piecyk said.
This would result in lower sales. But how much lower? Says Piecyk, "We expect Apple's iPhone sales to drop to 27.5 million units in Fiscal Q3, resulting in a revenue estimate that is $1 billion below consensus."
The insanely popular photo app and social sharing site Instagram has been aquired by none other than Facebook for a sum somewhere around $1 billion in cash and shares. CEO Kevin Systrom confirms that the service is not going anywhere and will continue to run as-is for now.
Zuckerberg confirms the acquisition and says that the Facebook team will be "able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests." This purchase comes with some incredible statistics.
This deal took place roughly 551 days after Instagram's launch meaning that they made $1B in value in less than 2 years. That's simply incredible. But there's more. This incredible company only has 13 employees! Also, with a valuation of $1 billion, that means each Instagram user is worth approximately $33 a piece.
Zuckerberg posted about this on his Facebook Wall:
This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.
We're looking forward to working with the Instagram team and to all of the great new experiences we're going to be able to build together.