Will apple keep its shine with markets?
Has the economically troubled global market now conspired to cast a shadow on Apple’s vaunted quarterly earnings? The company earned $8.2 billion in profits – $8.67 per diluted share – during its Q4 2012 fiscal quarter that ended Sept. 29. Revenue was $36 billion. For its fiscal first quarter, which will end Dec. 31, Apple projected earnings of $11.75 a share on a whopping $52 billion in revenue – 12% more than the same quarter a year ago. However, those numbers fall short of Wall Street’s expectations. Analysts have been expecting earnings of $15.43 per share and $55 billion in revenue. A $52-billion quarter would still be the highest quarterly sales ever reported by a tech company. But even Apple isn’t sure whether it would be able to meet analysts’ projections of $55 billion. The company has a phalanx of new products that will find themselves given as gifts during the Christmas holiday season: the 2-month-old iPhone 5; a fourth-generation, full-size iPad; the all-new iPad Mini; a new 13-inch-screen MacBook Pro; two new iMac desktop PCs; a refreshed line of iPods; and a new iBook cloud service.
Japanese consumer electronics giants in a sea of trouble
The cup of woes for Japanese consumer electronics firms seems to be brimming over. Be it Sony, Sharp or Panasonic, all of them are bleeding red. For instance, Panasonic Corp will lose $10 billion in the financial year 2013 as it gets down to writing off billions of dollars in losses in its mobile and energy business. The company is heading towards its fourth year of net loss, which in the current financial year adds up to 765 billion yen, almost equivalent to last year’s record net loss of 772 billion yen. After writing down the loss for the current financial year, its cumulative losses over five years comes to a staggering 20,890 billion yen. In a bid to stanch the losses, the company has so far laid off 36,000 personnel. At the same time it has undertaken an ambitious restructuring exercise to get the business back in shape. Its overall restructuring costs in the first half of this year ballooned to 356 billion yen, and it expects such costs to reach 440 billion yen for the year. No doubt the charges are high but they are a small price to pay for turning around a once thriving business.
Facebook shows signs of getting its mojo back
Facebook became the only US company to debut with a market value of more than $100 billion, but its stock price dropped more than 50% after the IPO in May this year. The disastrous IPO was obviously a wake up call for the world’s biggest social media networking company. Facebook’s founder Mark Zuckerberg has since rolled out several new ad products and pushed the company to monetize its service more aggressively. It recently unveiled a new plan to grow its user base – and mobile revenue – by expanding the reach of its mobile messenger app, whose features include free texting, group chat, and photo-sharing. All thse initiatives are helping Facebook move forward on the revenue growth path. The company’s reported sales for Q3, whose results were announced in October, stood at $1.26 billion, up 32% from a year earlier.
Biggest deal in publishing
Two of the world’s largest book publishers – Penguin Books and Random House – have decided to merge. Under the plan, Germany’s Bertelsmann, which owns Random House, will own 53% of the joint venture while Britain’s Pearson, owner of Penguin, would own the rest. The transaction will close in the second half of 2013, following regulatory approval. The joint venture will put the combined entity ahead of French publishing house Lagardere, the world’s largest publisher in consumer publishing market. Lagardere controls 17% of the global consumer publishing trade, while the combined company will be able to capture 26% of the global consumer publishing books market. The merger would provide significant synergies and the opportunity to spend more on the new technologies transforming the publishing industry.
Marketing windows 8
The launch of Microsoft’s new OS Windows 8 on October 26 was preceded by a lot of market buzz. All this was perhaps justified considering that it was arguably the biggest product release in Microsoft’s history. Windows 8 represents a new approach to user interface, replacing icons and programs/apps with live tiles that link up to social communities, Internet services, and cloud-based data storage and retrieval. Microsoft has installed this interface across computers, tablets, smartphones, creating the first-ever semblance of an integrated ecosystem for its users. No wonder that there were reports of Microsoft planning to splurge between $1.5 billion and $1.8 billion on its Windows 8 marketing campaign. But almost two months into the launch, there isn’t much sense of where the billion dollars of advertising is going, or what its Windows 8 campaign will look like.
New opportunities for tv industry
Starting October 31 2012, four metro cities in India went completely digital in terms of TV broadcast services. Viewers in these cities are now able to access TV broadcast services only in the digital format through a set-top box. For TV broadcasters, the switch to digitalisation will bring around Rs.55 billion in revenue per year. State governments will also be able to reap in good dividends in terms of service tax as the neighbourhood cable operators have been disclosing only 20% or so of the actual number of subscribers from whom they collect money every month. The process is also being keenly watched by all stakeholders in the TV broadcast industry as it marks a great business opportunity for all the players. Digitalisation will empower TV consumers as it will give them access to increased number of channels and high quality viewing. The process will also come as a boon for set-top manufacturers, who can expect a sale of over 20 million boxes over the next two years. However, the full benefits of digitalisation will become visible when the exercise will be completed on a pan-India level by 2014.
Star tv’s new channel gambit pays off
When STAR India, the largest broadcasting company in the country, went for a major makeover of its STAR One channel in December last year, it aimed at capturing a greater slice of the youthful TV audience with a programming line-up that was fast-paced but came with lower advertsing costs. In line with this objective, over the past year, the channel has been attempting to turn up the volume on the things that really matter in life through its unique and poignant stories. The relaunch of of STAR One as Life OK has also proved to be sweet success for STAR India’s CEO Uday Shankar and the facts bear this out. Life OK launched with 44 GRPs but eventually went up the ladder and now averages 80-84 GRPs per week besides raking in Rs. 40 crore a month in advertising revenues. In its earlier avatar as STAR One, the channel’s GRPs stood in the range of 30-45 a week and it made an estimated
Rs.15-20 crore a month in ad revenues. Many media executives are of the view that the rebirth and rise of Life OK in the GRP scorecard could have been responsible for the closure of Imagine TV by Turner Broadcasting System. In its bid to stand out from the crowd, Life OK has kept the duration of its shows to multiples of 20 minutes as against the commonly followed practice of having 30 minute shows.
Riding the 4g wave next year
Even though it has been almost two years since 3G services were first introduced in the country, the technology for accessing rich data has failed to pick up steam so far. But slow adoption of 3G services has not prevented telecom operators from going ahead with the rollout of the still-faster 4G services. Bharti Airtel became the first company to launch 4G services in Kolkata early this year. Currently these services are also available in Bangaluru and all the stakeholders are intensively pursuing plans for rolling out these services in the four metros early nest year. Internet speed of 4G is upto 320 times that of conventional 2G-based services. But there are few takers for 4G services because of its high price. However, the picture could change once it is available at an affordable price. In order to facilitate its wide-spread adoption, many players are planning to launch these services at rock bottom prices in the coming days. While 2013 could prove to be the year in which 4G services gain critical currency in terms of usage it also needs to be ensured that 3G services don’t end up languishing behind.
Flipkart’s plans run into a snag
The plans of India’s largest consumer e-commerce player Flipkart.com to launch its own online marketplace may have to wait longer. The company is currently under investigation by India’s Enforcement Directorate for alleged violations of foreign direct investment rules, which might delay or even scupper its plans for becoming an online marketplace player. In an online marketplace, consumer transactions are processed by the marketplace operator and then delivered and fulfilled by the participating retailers. A number of e-commerce companies such as Infybeam, Tradus.com, Snapdeal, ShopClues among others are already offering similar services in India. Flipkart had earlier registered two new companies, Flipkart Marketplace and Flipkart Payment Gateway Services by way of facilitating its entry in the online marketplace. The e-tailer has already created a strong brand foothold and it is hoping to hit the target of $1 billion in sales by 2015. The company is one of the most funded e-commerce retailers in the country and has raised more than $180 million from various global investors.
