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The Great Tech Wreck of 2008? (taken from the "Seeking Alpha" site)
The Great Tech Wreck of 2008?
posted on: February 10, 2008 | about stocks: CSCO / GOOG / INTC / MSFT
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The high-tech companies of the S&P 500 last quarter turned in “the best performance of any sector in the market“.
Yet the sector that performed the best in this case has also of late turned in “We will have more rounds“.
Round Two may be around the corner. People have been increasing credit-card debt. “Round Two will be credit-card problems“.
Intel is in some ways emblematic of what has happened to tech. Intel’s (INTC) net income rose 51% last quarter, yet its shares sold off more than 12%.
Three is a magic number, so Google (GOOG) and Apple (AAPL) were similarly punished. You can prove anything with statistics.
Microsoft doesn’t count. Microsoft (MSFT) reported stellar results, but also offered strong guidance going forward, unlike most tech companies, which only posted strong results but offered softer guidance. Nevertheless, Microsoft shares waffled up and down the day after reporting. It seemed at the time “an ominous portent“.
Rationality did not return to the market until Cisco (CSCO) reported results for the December quarter. Cisco turned in some terrific numbers. However, it too offered some soft guidance going forward. Most everyone expected a tech wreck the next day – "stocks don’t trade on what companies have done, they trade on what they are going to do."
The tech wreck however never happened that day. Or it hasn’t happened yet. Knock on wood.
Phil Coffman
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Infineon fell 25% to 1.6 billion euros, mostly on the performance of Qimonda QI. Excluding Qimonda results, it swung to a 65 million-euro profit:
LONDON (MarketWatch) -- Shares in Germany's biggest chipmaker, Infineon Technologies, dropped as much as 11% on Thursday as the group pared its outlook for microchips used for phones and broadband devices.
Infineon Technologies 623100IFX posted gloomy numbers during its fiscal first quarter, but they weren't a surprise. The company reported a loss of 396 million euros ($583 million) for the fiscal first quarter, against a profit of 120 million euros in the year-ago period, and a loss of 280 million euros in the Sept. 30-ending quarter.
Revenue at the Neubiberg-based firm fell 25% to 1.6 billion euros, mostly on the performance of Qimonda QI, the memory chip maker in which it holds a 77.5% stake, which has suffered from a downturn in prices for DRAM chips.
Analysts polled by Dow Jones Newswires expected a loss of 445 million euros on revenue of 1.63 billion euros.
Excluding Qimonda results, it swung to a 65 million-euro profit before interest and tax, with revenue up 14% to 1.09 billion euros.
The stock was down 11% in mid-morning trading, and now is down 26% this year.
Infineon gave a cautious outlook, even without the problems at the memory-chip division.
Second-quarter revenue from its automotive, industrial and multi-market segment will be flat on a sequential basis and communications solutions revenue will fall by a "mid-teens" percentage basis, Infineon said.
Infineon said volumes from making chips for mobile phones will be lower than expected, and broadband will stabilize on the "low level of the prior quarter." It expects to post a loss for this business during the fiscal year.
On a conference call, Infineon executives refused to identify the client or clients demanding fewer chips, more weakness than the typical seasonal behavior. Infineon's clients include Nokia NOK and LG Electronics.
The company previously said communications revenue would fall by single-digit percentage level and that it would manage a modest profit from the division.
For the year, revenue without Qimonda will grow by a high single-digit percentage, with a low to mid-single digit operating margin.
For fiscal 2009, Infineon is still shooting for a 10% operating profit margin, "but uncertain prospects for the global economy, the adverse currency development and the revised outlook are headwinds that make reaching this goal more challenging," said Wolfgang Zeibart, chief executive, in a statement.
(C) 1997-2008 MarketWatch.com, Inc. All rights reserved
From another board. Let's hope that the Senate reads this one....
China Weighs in on U.S. Patent Reform Bill
Received the following from a reader today:
Remember the Indian newspaper article arguing that the patent reform measures being considered by Congress will make it easier for India's patent holders to enter the U.S. market? A similar story has now surfaced in China, this one written by one of that country's leading intellectual property experts.
The attached article (Download patent_reform_article_china_intellectual_property_news.pdf) was published in China Intellectual Property News on November 7, 2007, and has just been translated into English. Its author is Yongshun Cheng, former senior judge and deputy director of the Intellectual Property Division of the Beijing High People's Court. Cheng argues that the proposed patent reform bill is bad news for American innovation and good news for foreign infringers, pointing out that the bill "is friendlier to the infringers than to the patentees in general as it will make the patent less reliable, easier to be challenged and cheaper to be infringed." He goes on:
"It is not bad news for developing countries which have fewer patents. Many of the Chinese companies are not patent owners in the U.S. market and their products are often excluded from the market because of patent infringement accusations. This bill will give the companies from developing countries more freedom and flexibility to challenge the relative U.S. patent for doing business in U.S. and make it less costly to infringe."
Cheng concludes by claiming that the proposed bill is in conflict with the U.S. government's practice of pressuring China to strengthen its own protection of intellectual property rights.
Cheng is the current director of the Beijing Intellectual Property Institute (BIPI). In
MOT announcement stunned employees......
Feb. 1--Motorola Inc., which created and dominated the worldwide cell phone market, on Thursday announced it may shed that iconic business amid a breathtaking decline in sales and mounting losses in the past year.
The move by one of Chicago's landmark companies is an admission by Motorola of its inability to keep pace with fast-shifting consumer tastes. What was once one of the company's key strategic assets is now a weakness: its ability to rapidly develop breakthrough technology that anticipated users' needs.
Twice in the last five years, Motorola chief executives have lost their jobs after failing to keep pace with the lightning-quick changes in consumer demand. Thursday's announcement by the Schaumburg-based firm signals that new Chief Executive Greg Brown is determined not to become the third.
A turning point came in the last several weeks as early returns in the 2008 selling season showed Motorola cell phones couldn't match the technology-rich offerings from competitors, said a source close to the company. That forced Brown's hand, in part because of concerns that a further deterioration in Motorola's biggest business unit could harm the entire company, the source said.
The announcement stunned employees at the Libertyville headquarters for Motorola's cell operation. Just hours earlier, the head of the unit, Stu Reed, had told some 500 employees at a town hall-style meeting that the company is committed to fixing the business and returning it to long-term health.
"It was like a punch in the gut," said one employee, who first heard the news from an overseas supplier. "Given what Stu said this morning, everybody's like, 'What's going on here?'"
Activist investor Carl Icahn, who owns nearly 3 percent of the firm and has long pressed for a breakup, seized the moment Thursday to announce he plans to propose a slate of directors at Motorola's annual meeting in May. He failed in a previous effort.
In announcing the move late Thursday, Motorola said it is "exploring the structural and strategic realignment of its business to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value."
While that may signal Motorola is putting its $19 billion cell phone unit on the block, the firm also might instead sell one or both of its other major business lines -- one for TV set-top boxes and network equipment, and another that makes mobile equipment for governments and large businesses. It also could decide to keep the firm intact.
"We don't want anyone to be misled that we've preordained" a plan, Don McLellan, Motorola's head of mergers and acquisitions, said in an interview. "This announcement is about equipping mobile devices with a way to achieve its leadership again."
Motorola's cell phones once dominated the worldwide market. But in the 1990s, Motorola lost share and ultimately conceded leadership to Nokia Inc. Despite a brief breakthrough with the Razr phone, in 2004, Motorola in the fourth quarter of 2007 held a 12.2 percent market share, lagging Nokia's 40 percent and Samsung's 13.9 percent, according to research firm IDC.
The cell division lost $1.2 billion last year on $19 billion in sales. Total company revenues were $36.62 billion.
The news came as a particular shock to the firm's cellular employees who at Thursday's meeting heard Reed assure them that Motorola was committed to succeeding in cell phones again.
In a detailed PowerPoint that Reed said he planned to deliver to Motorola's board later in the day, he laid out plans that included improving efficiencies, reducing the number of basic cell phone "platforms" and lowering costs with an eye toward achieving profitability. "It's time to fix it, and fix it finally," Reed said, according to employees who attended the meeting.
Motorola's employees have been rocked by repeated rounds of layoffs in recent years. Cutbacks totaling 7,500 employees in 2007 brought total headcount to only 65,000, down from the peak of 150,000 in 2000.
If Motorola does sell the business, competitors Samsung, Sony Ericsson and LG Electronics are considered possible bidders, any of whom might seize the chance to boost market share. Market leader Nokia is considered least likely to bid. Whoever ultimately owns the business, Motorola included, will need to invest significantly to refresh Motorola's weak product line. Motorola currently is weak in high-end, third-generation technology and in low-cost phones for emerging markets like India and China.
Analysts say the handset division's strongest asset is its global brand. If the company were to split up, it's likely the iconic Motorola "bat wings" would follow the cell phone unit, since the brand recognition is less important for the other divisions.
"Why would you waste that on cable boxes when nobody gives a hoot about it?" said Roger Entner, senior vice president of the communications sector at IAG Research. Motorola's stock is at 2003 levels and has lost nearly 60 percent of its value since the Razr brought the stock above $25 a share in the fall of 2006. After hours, when the announcement was made, shares jumped almost 11 percent, to $12.75.
------
wawong@tribune.com
dgreising@tribune.com
Tribune reporters Mike Hughlett, Julie Johnsson and Greg Burns contributed to this report.
To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicagotribune.com.
News - Just released
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--
InterDigital, Inc. (NASDAQ:IDCC) today unveiled its SlimChip(TM) family of high performance mobile broadband solutions, offering manufacturers flexible options to accelerate their time to market with advanced 2G/3G products with HSDPA and HSUPA capabilities. The set of SlimChip products includes:
-- high performance baseband ICs
-- broadband modem IP, and
-- complete reference platforms
InterDigital's SlimChip products feature a "slim" modem architecture where the modem - which provides core wireless connectivity - is separated from the applications processor and peripheral functions. This approach allows terminal unit manufacturers to customize the pre-certified modem, in a rapid and cost-efficient manner, to specific mobile broadband devices such as data cards, smart phones or feature phones.
"Several recent industry reports project strong growth for mobile broadband devices such as data cards, notebooks, and ultra mobile PCs," commented Mark Lemmo, Executive Vice President, Business Development. "Our flexible 2G/3G products are uniquely suited to serve this rapidly emerging market."
"InterDigital's ability to deliver its SlimChip ICs, licensed IP and complete reference designs is significant given the transition at the OEM and even ODM level from single-vendor to multi-vendor strategies," noted John Jackson, Vice President of Enabling Technologies at Yankee Group. "Market conditions are also favorable for expanded connectivity in numerous device categories. Beyond the performance specifications of the SlimChip products, which are considerable, InterDigital's flexibility in terms of technology delivery format is a strong match to the evolving manufacturing landscape."
SlimChip products feature advanced receiver technology with receive diversity, providing superior interference mitigation resulting in higher data speeds and better coverage. In pre-customer trials on a live network and in the lab, the SlimChip Reference Platform in an Express Card form factor has delivered true mobile broadband performance with data speeds of up to 7.2 Mbps in the downlink and 1.5 Mbps in the uplink. The SlimChip design supports speeds up to 10 Mbps in the downlink and 5.7 Mbps in the uplink respectively.
About InterDigital
InterDigital designs, develops and provides advanced wireless technologies and products that drive voice and data communications. InterDigital is a leading contributor to the global wireless standards and holds a strong portfolio of patented technologies which it licenses to manufacturers of 2G, 2.5G, 3G, and 802 products worldwide. Additionally, the company offers a family of SlimChip(TM) high performance mobile broadband modem solutions, consisting of Baseband ICs, Modem IP and Reference Platforms. InterDigital's differentiated technology and product solutions deliver time-to-market, performance and cost benefits.
ERIC demonstrates mobile broadband
Edited Press Release
STOCKHOLM (Dow Jones)--Ericsson Wednesday announced that it had demonstrated Long Term Evolution (LTE) in both Frequency Division Duplex (FDD) and Time Division Duplex (TDD) mode on the same base station platform.
LTE is technology that can use the same platform for both paired and unpaired spectrum, thereby enabling large economies of scale for operators.
Ericsson's LTE TDD mode demonstration encompassed a variety of applications and showed speeds over 90Mbps in the downlink with 2x2 MIMO (Multiple Input Multiple Output).
Ericsson has previously demonstrated LTE in FDD mode several times with speeds of up to 160Mbps.
The company said LTE will enhance more demanding mobile broadband applications like mobile video, blogging, advanced games, multimedia telephony and professional services. It also interoperates with existing cellular systems.
LTE is the next evolution in mobile network standards defined by 3GPP (Third Generation Partnership Project) and supports operations in both the paired spectrum and unpaired spectrum.
It enables efficient spectrum utilization for both legacy and future wireless frequency bands.
Channel bandwidths of 1.4-20MHz are supported.
The wide industry support for LTE ensures economies of scale, providing cost-efficient solutions.
(END) Dow Jones Newswires
January 30, 2008 07:59 ET (12:59 GMT)
Sony Ericsson gets with the beat! (NOK, SAM and AAPL mentioned)
By Angelo Franchini
A DOW JONES NEWSWIRES COLUMN
LONDON (Dow Jones)--Sony Ericsson, the mobile handset joint venture between Sony and Ericsson, has finally got with the beat.
The company has announced content deals with 10 record labels, including three of the world's four top, ahead of the launch of its online music store in May.
Sony Ericsson's move is overdue. After all, the venture is no stranger to music as a way to sell mobile phones. It has always had access to Sony BMG Music Entertainment's catalog and the company pioneered music phones through its Walkman-branded handsets.
Yet, Apple's iTunes has led the way in downloadable music since its introduction in 2001, selling more than four billion songs to date. Now, it has the iPhone and wifi-enabled iPod to compete with handset makers.
And some of Sony Ericsson's handset rivals have been quicker off the mark in terms of rethinking their music strategy in less proprietary terms in the light of Apple's success.
Nokia last August launched its online store Ovi, with the aim of selling music and games to emulate Apple's success. The Nokia Music Store opened last November and counts more than two million pay-per-song titles.
In the early part of 2008, Nokia plans to open game store N-Gage, to be followed by its "Comes With Music" program that will allow new handset buyers one year of unlimited music downloads.
That's a bit of a nuisance for Sony Ericsson which plans to roll out its improved PlayNow online services at the same time.
Five millions of titles have been promised by Sony Ericsson and its big music partners, along with an open platform allowing for multiple file formats.
Yet it's going to take months to roll out the service to 30 countries by which time Nokia may have Ovi tested and fully operational.
And while Apple is hard to beat in terms of the slickness of iTunes, Nokia has the advantage of its market share, standing around 40% in the fourth quarter compared with Sony Ericsson's 9%.
Volume growth rates are not comforting either, as Sony Ericsson's trails among the four top players, with year-on-year growth of 18% compared to 27% at Nokia and about 40% each for Samsung and LG. Improved 3G handsets and cooler sub-branding from Samsung, LG and Nokia may be the cause of that.
So it will take more than a larger online jukebox for Sony Ericsson to keep up with the tempo with its peers, let alone their stock performance, particularly when the parent companies are running into difficulties in other parts of their business. Ericsson shares are down about 50% over the past year, with Sony's stock down 16%, compared with a 39% gain at Nokia and 51% rise at Apple.
(Angelo Franchini, a Special Writer on Dow Jones Newswires' Skeptic team, has previously worked in research and development in the biotechnology and software sectors. He can be reached at +44 20 7842 9458 or by e-mail: angelo.franchini@dowjones.com)
TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackEurope@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments
(END) Dow Jones Newswires
January 28, 2008 10:52 ET (15:52 GMT)
AT&T goes 3G in the Northeast...
Jan. 24--Super-fast wireless networking and downloads have arrived in the Northeast corridor between Boston and New York, bringing AT&T's new "3G" network to several towns in southeastern Connecticut along the way.
The new 3G moniker stands for "third generation." The network it represents enables simultaneous voice and data calling, said Stephen Krom, AT&T's vice president and general manager for wireless in all the New England states in an exclusive interview with The Day.
AT&T's competitors don't yet offer the "blazing fast" speed of 3G, he said.
Over the last three years, the company has invested more than $18 billion to build its wireless network, Krom said. Since 2004, $105 million has been invested in Connecticut, he said.
Anyone with one of a variety of different types of AT&T cell phones (but not yet the iPhone) can now download video clips of everything from Disney cartoon shorts to YouTube segments and Power Point presentations in seconds.
The ramped up cellular service can even link individual cell phone users in a video conference call -- not quite as readily as with the "on screen" command from Next Generation Star Trek's Captain Picard, calling up the latest galaxy intruder, but live visual communication, nonetheless.
And a laptop with a 3G wireless card or memory chip can get wireless data as fast as if it were plugged into to a DSL line, said Adam Cormier, an AT&T spokesman.
In a brief demonstration, video-conferencing was buggy and didn't work, but a film clip of Goofy and Mickey Mouse in full-blown animation played without a hitch. The downloading of a Power Point presentation also worked quickly and seamlessly.
What 3G enables is more multi-tasking on cell phones and wireless laptops: talking and sending email or pictures at the same time, Krom said.
It is the only technology capable of handling both voice and data services at once, he said. AT&T uses the 850 Mhz and 1,900 Mhz frequencies in its major markets.
"These days, business moves at blistering speeds," said Tony Sheridan, president of the Chamber of Commerce of Eastern Connecticut. "As a result, instantaneous access to phone calls and data at work, home and in between has become a must-have for Connecticut companies of all sizes. Investments like AT&T's are critical if we want to grow our state's economy and bring new jobs to Connecticut."
The 3G network extends from Old Lyme, East Lyme, Waterford and New London, across the Thames River to Groton, Stonington, North Stonington and parts of Voluntown. The Foxwoods Resort and Mohegan Sun casinos have had 3G coverage since last January.
The network also is available in Madison, Clinton, Middlesex, Westbrook and Old Saybrook; along the Merritt Parkway and Interstate 91; and at Bradley International Airport; the UConn-Storrs campus; and ESPN headquarters in Bristol.
The phone types that work with 3G include new models like the AT&T Tilt, Samsung BlackJackII, and AT&T Duo, as well as older ones like the LG Shine and Motorola RAZR2. The network also transfers to the Blackberry Curve when outside the second-generation (2G) coverage area, Krom said.
AT&T Chief Executive Officer Randall Stephenson has indicated in news reports that Apple will introduce a new iPhone later this year that can work with third-generation wireless networks.
To see more of The Day, or to subscribe to the newspaper, go to http://www.theday.com.
Copyright (c) 2008, The Day, New London, Conn.
More from DAVOS - QCOM
By Adam Cohen and Roger Cheng
Of DOW JONES NEWSWIRES
DAVOS, Switzerland (Dow Jones)--The current slowdown in the global economy won't hurt demand for mobile phone handsets, Qualcomm Inc. (QCOM) Chief Executive Paul Jacobs said Wednesday.
Mobile phones are "not a luxury, they're a staple," Jacobs told Dow Jones Newswires in an interview at the World Economic Forum here.
In past downturns, cellphone sales continued to be brisk, he noted, adding that he doesn't think this trend will change.
Jacobs said wireless carriers will use phone subsidies and promotions to keep sales brisk. "There are lots of things they can do to keep the flow going. In general, the industry feels optimistic," he said.
Indeed, most telecommunications executives have expressed similar optimism over the state of the wireless business. Even AT&T Inc. (T) Chief Executive Randall Stephenson, who earlier this month triggered a market sell-off and renewed fears of a downturn in consumer spending when noting a higher rate of unpaid monthly bills, said the wireless business is holding up well.
More pressing for Qualcomm is a slew of litigation against rivals such as Broadcom Corp. (BRCM) and Nokia Corp. (NOK) and a long-running European Commission antitrust probe.
The company expects to spend more than $200 million on legal fees this year. Jacobs said this number likely represents a peak and will decline as lawsuits and pending arbitration is resolved.
"If we get through this period, I hope to minimize the (legal) costs," he said.
Qualcomm has suffered several recent defeats to Broadcom in a California lawsuit. In addition to losing a judgment, Qualcomm's lawyers were admonished by the judge for unethical practices related to destroying emails and other legal documents.
The company believes it is past the setback. It has designed a "workaround" that gets past contested patents for its third-generation, or 3G, technology called WCDMA, Jacobs said. For its 2G CDMA standard, Jacobs said the court has given the company a so-called sunset period to move away from the technology. This involves getting customers to switch chips, Jacobs said.
Qualcomm's customer base hasn't suffered from the litigation concerns. "The reasons they are Qualcomm customers are still the same," he said, noting that he wouldn't describe the company as losing customers.
-By Adam Cohen and Roger Cheng, Dow Jones Newswires; +322 741 1486; adam.cohen@dowjones.com
(END) Dow Jones Newswires
January 23, 2008 13:54 ET (18:54 GMT)
From Davos Conference
Davos Diary - Jan. 23-27, 2008 | World Economic Forum
Davos and the iPhone Effect
January 23, 2008, 12:31 pm
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[Davos 2008 - Day 1 - Dealbook]
In Silicon Valley, it may be all-iPhone-all-the-time, but here among the world’s business elites in Davos, it’s still very much a RIM Blackberry world. Indeed, if you pull an iPhone out of your pocket, it still creates a mild sensation here, because unlike in the United States, most Europeans have yet to touch Apple’s six-month-old handheld phenomenon.
That said, at a technology update session I moderated this afternoon, the iPhone was very much on the radar for the panelists, who included Randall Stephenson, the chief executive of Apple’s partner, AT&T, but also competitors such Cher Wang, the chief executive of High Tech Computer, and William Amelio, the chief executive of computer maker Lenovo, as well as Silver Lake technology buyout specialist Glenn Hutchins.
The consensus was that the iPhone is a boon to the industry as a whole because, by raising the bar in user interface design, it has not only created new opportunities for competitors but has demonstrated a path for attracting a new class of consumers who have shied away from complex handhelds in the past.
The panel also offered a striking contrast to the general sense of foreboding in Davos — the feeling that there is an impending financial crisis hanging over the conference.
While Davos rules prohibit direct quotations from panelists at many of the events, including this one, the general sense of the panel was that no information technology crisis is imminent and that the industry would be able to grow through any severe economic downturn. - John Markoff
A Timely Fairy Tale (Almost!)
So here's what it's coming down to----- A little double A team from Joe Paterno's back yard, made up of 300+ players, is going up against the combined strength of the 2 strongest teams in the NFL. (This reminds me of the movie "300," where 300 Spartan warriors of Greece defend their country in a single battle, against the entire million man Persian army and the Mongol hordes.)
What's the scouting report show on these NFL guys? Well, for sure, we know they have a track record of stopping at nothing, including bribery, intimidation, treachery, biting, kicking, and any other major and minor sin they think up, to defeat anything that stands in their path to victory, i.e., world domination.
In contrast to another team called the Patriots 17 and 0 record, both of these Juggernauts have been banged up some by the little AA guy. Enough so, that the AA team is being circled cautiously, and viewed warily by their oversized rivals as they head into the final battle (errrr, game.)
The NFL Bullie's scouting report shows that, despite their small size, the AA team gives no quarter and is adept at winning in the trenches, taking late hits, and demonstrating some tough in-fighting skills in earlier skirmish victories. Their report also shows that the NFL Referees chosen by the AA team to referee their game are skilled in their jobs, have loads of credibility, and look to be above reproach/suspicion. The Bullies however, true to their track record with AA and other teams, continue their search for AA weak spots, either in the armor of the little team, or in their scrutiny of the way the game is officiated/played.
Speaking of movies, the astute moviegoer knows that there is no such thing as coincidence. The viewer has been taught that a good Director never puts someone on the screen that doesn't have something to do with the plot and the movie outcome. (Hold that thought.) Now, back to the game....
Taking into consideration the facts that it's AA's ball, and AA's field, Vegas puts the odds of the final game(s) at 8 to 5 in favor of the the little guy, all other things being equal.
But wait, here comes a late substitution for the Play Review official. He's the guy that reviews all the plays, oversees questionable calls, and sends his review decision to the Field Umpire who makes the final decision announcement to the fans. In effect, the way this person rules, sort of determines the final call, and the perhaps the game. What happened to the other official? Who's this guy, and what's his resume'/track record?
Coincidence? Maybe! After all it's a Fairy Tale.
Good luck AA. Your fans (and many of the bookies) are with you all the way.
Analyst expectations for NOK, plus a little color on market share
Nokia Corp. (NOK) reports Jan. 24
Shares of the world's largest maker of cellphones have come off a 52-week high set in November after the company, which has seen competition pressure the average selling prices for its handsets, offered long-term profit-margin targets that disappointed some analysts. Still, the Finnish giant continues to gobble up market share as it taps burgeoning, high-volume markets such as India and China as well as demand for high-end phones that can browse the Internet, screen video and send email. Compared with the year-earlier quarter, Credit Suisse analysts expect a nearly 26% increase in Nokia's cellphone shipments. Meanwhile, the company is branching out into Internet services, such as music downloading and maps. The push has meant heavy spending and a company reorganization that carved out a new business unit.
EARNINGS: Analysts polled by Thomson Financial expect earnings of 43 European cents a share. Per-share profit in 2006's fourth quarter was 32 cents, or 30 cents excluding a tax refund and costs related to networks joint venture Nokia Siemens Networks.
REVENUE: Analysts expect 14.8 billion euros for the quarter, up from 11.7 billion euros a year earlier.
-For continuously updated news from The Wall Street Journal, see WSJ.com at http://wsj.com.
(END) Dow Jones Newswires
January 14, 2008 16:10 ET (21:10 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.
DR - Specific mention of impact on HTC
TAIPEI (Dow Jones)--High Tech Computer Corp. (2498.TW) said late Thursday its first quarter sales won't be affected by a U.S. court ruling ordering Qualcomm Inc. (QCOM) to stop marketing some of its products.
The company reached this conclusion after a preliminary evaluation, according to the filing to the Taiwan Stock Exchange.
An investor relations official said Friday High Tech Computer made the evaluation after discussing the issue with Qualcomm, a San Diego producer of digital-communication technologies, which is High Tech Computer's supplier for handset chips.
"We will work with Qualcomm to come up with other solutions, such as upgrading the technology or amending the technology, so there will be no effect on our sales in the first quarter," said the official, who declined to be named.
U.S. District Judge James V. Selna in Santa Ana, Calif., ordered Qualcomm on Dec. 31 to stop producing and marketing in the U.S. cellular-phone chipsets and software that infringe three patents of Broadcom Corp. (BRCM), the Irvine, Calif., producer of semiconductors for wired and wireless communications.
High Tech Computer's shares have fallen 9.6% since Dec. 31 on concerns that High Tech Computer may not be able to ship its handsets to U.S. after the court ruling. At 0336 GMT they were trading at NT$541.
Bill Huang, an equities sales trader at KGI securities, estimated that sales would fall 27% on quarter if High Tech Computer wasn't able to ship any handsets to U.S. But said "the chance of that happening is low, as an alternative solution will likely be reached between Qualcomm and Broadcom."
High Tech Computer's combined revenue in October and November was NT$27.64 billion, according to monthly filings by the company.
High Tech Computer Chief Executive Peter Chou said Nov. 14 he expected revenue in the first quarter of 2008 to be higher than the revenue of NT$23.6 billion in the first quarter of 2007.
High Tech Computer makes personal digital assistants for Hewlett-Packard Co. and smart phones for Palm Inc., and is the world's largest maker of phones using Microsoft Corp.'s operating system, in terms of shipments.
-By Wei Yi Lim, Dow Jones Newswires, 8862-2502-2557, weiyi.lim@dowjones.com
(END) Dow Jones Newswires
January 03, 2008 23:02 ET (04:02 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.
Law Firms flock to Carmel Valley
"The key phrase that really is guiding most of the law firm activity in San Diego is 'intellectual property, copyright and patent law,'"
Dec. 22--It might seem like the set-up line for a joke about lawyers gathering near a freeway.
Still, it's a serious question: Why are so many lawyers flocking to the east side of Interstate 5 in Carmel Valley?
What was once a beachhead for a few corporate law firms near the I-5 interchange with state Route 56 has in recent years become a full-on invasion -- creating a new legal power hub and center for business services.
At least two dozen law firms are now clustered along High Bluff Drive and El Camino Real, making the 92130 ZIP code a premium locale that encompasses some of the priciest office space in San Diego County.
The concentration of legal firepower in the area, including law firms in University Towne Center, may be second only to the downtown law offices around San Diego's courthouses, 19 miles to the south.
For the most part, though, Carmel Valley's lawyers don't need to work downtown, either because they rarely appear in court or because they are as likely to go to trial in Boston or Seattle as in downtown San Diego.
"It's a very important and positive trend that's been building in San Diego," said Mark Reed, a senior managing director in San Diego for CB Richard Ellis, a commercial real estate services firm.
Many of the new law offices represent satellite operations for large firms with hundreds of attorneys in offices nationwide and even overseas.
"They're not really practicing law in San Diego's courthouses," said Bill Nason of Watanabe Nason, a San Diego legal search and recruiting firm. He called it an "interesting dynamic," because much of their work involves patent law and major corporate lawsuits.
"Many of these firms have these almost iconic litigation attorneys who handle these bet-the-company types of cases" and who bill their clients at $700 an hour, Nason said.
Some lawyers said they prefer Carmel Valley because it is centrally located amid San Diego's corporate business parks in Sorrento Valley, Rancho Bernardo and Sorrento Mesa. The commute also is far easier for lawyers with homes in Del Mar, Rancho Santa Fe and other nearby affluent communities.
Many lawyers consider the trip through the Interstate-5/805 interchange so onerous that a membership drive is building for a Carmel Valley section of the San Diego County Bar Association.
The group wants to begin holding lunches and networking events in Carmel Valley this year because "it's more difficult for attorneys to make the drive for downtown lunch events," said Kimberly S. Greer of the Morrison & Foerster law firm. "It turns out being a 2- to 2 1/2 -hour time commitment."
All of the big law firms moving into the area are targeting San Diego's lucrative corporate work, said Fred Muto, partner-in-charge of the Cooley Godward Kronish office in University City, which he helped open in 1992.
"The key phrase that really is guiding most of the law firm activity in San Diego is 'intellectual property, copyright and patent law,' " said Reed of CB Richard Ellis.
Such legal work is focused on protecting the proprietary science and technology that underlie San Diego's proliferation of wireless, software, biotechnology and health science companies.
Nason agreed, saying: "It speaks to the maturity of the San Diego companies that do this work and have sought these patents, which are maturing to the point where they are being disputed. These cases are huge. They tend to settle before they go to trial, because it's just so bloody expensive."
Still, such lawsuits often expand into multidistrict cases that require teams of attorneys to either defend or break a company's patents, Nason said.
Qualcomm, for example, has 11 patent disputes just with Finland's Nokia to go along with numerous cases pending against Broadcom and other competitors.
"The attorneys who are most in demand are people who also have a master's or a Ph.D. in some kind of science," Reed said. "They'll have a master's degree in engineering and a law degree, or biochemistry and law. They're writing very complex copyright and patent materials. These are the kind of jobs that are coming to dominate our market, the jobs of the 21st century."
One of the latest entries is Baker & McKenzie, which moved about 40 lawyers from its longtime downtown office to High Bluff Drive on Dec. 3.
Bell, Boyd & Lloyd, a law firm based in Chicago and Washington, D.C., is scheduled to move next month into new offices at the Gateway at Torrey Hills, an office development at 3580 Carmel Mountain Road.
The Boston law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, which opened a San Diego office in 2006, also plans to relocate to the Gateway at Torrey Hills after signing a lease for almost 40,000 square feet, according to Grubb & Ellis/BRE Commercial.
At least two other law firms also have shown interest in the same office development, including Heller Ehrman, which has more than 50 lawyers in its office in University City.
"The Del Mar Heights area has become more like a Palo Alto," said Rick Reeder, an office property specialist with Grubb & Ellis/BRE. Demand is so high that rates for office space in Carmel Valley range from $3.50 to $4.30 a square foot, a premium for the San Diego commercial market, Reeder said.
Reed of CB Richard Ellis agreed, saying, "That area is probably the strongest office market in the county."
At Baker & McKenzie, managing partner Charles Dick said the firm's move was prompted by a strategic decision to expand its corporate and securities capabilities.
"We also wanted to make a move into intellectual property, particularly when it comes to protecting patents and trademarks on a global basis," Dick said.
"There is a sense that even though the economy may seem to be a little sluggish right now, that we are moving into a whole new knowledge-based economy," Dick said. "And San Diego is going to be one of the centers of that."
To see more of The San Diego Union-Tribune, or to subscribe to the newspaper, go to http://www.uniontrib.com.
Copyright (c) 2007, The San Diego Union-Tribune
Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
How nice - SAM fights NOK in low-price segment:
Dec. 18--Samsung plans to jump into the untapped low-end mobile handset market in 2008 in an attempt to break Nokia's grip on the US$1.5-billion-baht market in Thailand.
The South Korean handset maker announced it would use a "price dumping" strategy in the low-cost handset segment, with the aim of doubling its share to 20 percent in the local handset market next year.
"The policy was in response to the Finnish giant which has controlled more than 60 percent of the Thai handset market for years," said Kwang Kee Park, the managing director of Thai Samsung Electronics Co.
In the upcountry market, he added, Nokia's market share is even bigger, at more than 70 percent.
Mr Park said Thailand's handset market contracted by 5 percent in terms of value this year even as industry-wide sales volume rose by 12 percent, indicating most of sales were cheap products.
He attributed the negative growth to what he called an "unbalanced market structure" at the supply level, defined and shaped by Nokia.
Mr Park said the low-cost segment of the handset market was currently dominated largely by Nokia, with a total market share of 90 percent in the segment. Nokia is expected to earn up to $1 billion in sale revenue out of $1.5 billion total in the Thai market this year.
He said Nokia's dominant position had led to dealers stocking Nokia phones at more than 60 percent of their total products, leaving little room for other brands to compete for bigger market shares.
By global standards, he said, a company with a 40 percent market share is already described as a monopoly player.
For the Thai handset market, which Mr Park sees as having matured, Nokia should not control more than 30 percent at most. Nokia now controls a 60 percent share, followed by i-Mobile of Samart with 10- 12 percent, Samsung 9-10 percent and Motorola with 8-9 percent.
Mr Park admitted that Samsung had been severely affected this year as its premium handset sales fell far short of the target.
He said Samsung planned to introduce up to six low-end handset models in the Thai market next year, priced between 2,000 baht and 3,000 baht.
"We don't care about the profit margins next year as we want to balance the market structure and promote fair competition."
Mr Park said Samsung expected to sell 1.5 million handsets out of a total of nine million units, with revenue of $200 million in 2008, up from 1.1 million out of 8.5 million industry-wide with revenue of $120 million this year.
The company sold 960,000 units, generating revenue of $89 million in 2006.
He said Samsung planned to implement a direct-to-the-retail strategy in which distributors would be bypassed next year after facing a lawsuit by one of its major distributors on charge of deceit.
Mr Park said Samsung aimed to transform its mobile phones from a "technology gadget" to a "fashion and lifestyle" product next year.
He also said that Samsung planned to spend up to $5 million to build a lifestyle avenue for young people over the next three months. The site, potentially located at Siam Square, is aimed at symbolising the Samsung brand.
To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.
Copyright (c) 2007, Bangkok Post, Thailand
Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
Ne
MOT in discussions with Arima/Compal for 3.5G orders
TAIPEI (Dow Jones)--Motorola Inc. (MOT) has discussed orders for mobile phones in 2008 with Arima Communication Corp. (8101.TW) and Compal Communications Inc. (8078.TW), the Apple Daily News reported Thursday, citing unnamed sources at the Taiwan firms.
Motorola may buy between 1 million and 2 million 3.5-generation phones from the contract handset makers with shipments likely scheduled for the second half of 2008, the Chinese-language newspaper said, citing the sources.
Newspaper Web site: http://www.appledaily.com.tw
-By Taipei bureau, Dow Jones Newswires; 8862-2502-2557; djnews.taipei@dowjones.com
(END) Dow Jones Newswires
December 12, 2007 19:44 ET (00:44 GMT)
LG ups 07 Sales goal
December 12, 2007 (FinancialWire) LG Electronics (NYSE: LPL) has raised its 2007 sales goal by two million phones and now says that it expects a fourth quarter operating profit margin of around 8%.
LG is the world's fifth largest mobile phone maker, behind rivals including Motorola (NYSE: MOT), Nokia (NYSE: NOK), and Samsung. The company expects to sell 80 million mobile phones this year, above its earlier target of 78 million, and it expects to ship up to 100 million phones in 2008. According to LG executive vice president Bae Jae-hoon demand for LG phones is strong at home and abroad as the South Korean company tries to enhance its brand image.
The company has introduced a variety pf premium mobile phones intended to strengthen its position globally.
FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation from any company for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, visit http://www.investrend.com/contact.asp.
There are 756,600 Call option shares at the $22.50 strike, due to expire on 12/22.
Make no mistake, "the boys" will fight real hard to prevent them from being exercised.
A news flag that brought our SP above that price by that date, would cause the sale of a few more Alka Seltzers tabs.
IMO, Brown sounds like he may be more ready for a license than Zander.
New MOT CEO aims to "WOW" markets, and quickly:
Dec. 9---- Back when Greg Brown was running a San Francisco-based software company, he did some career plotting. He knew he wanted to move to a large public company, and he knew that Motorola had a reputation for hiring smart people as well as a strong legacy.
Here's what he did next:
"I wanted to be part of this organization," Brown said. "I took it upon myself, picked up the phone and called the CEO."
The somewhat brash act won Brown a position in early 2003 as division president, two levels below Christopher Galvin, the grandson of Motorola's founder. Brown thrived under Galvin's successor, Edward Zander, and now he is set to take the reins himself as CEO of the Schaumburg-based technology giant on Jan. 1.
At Motorola, Brown has been known more for steady work than busting down doors. But he will need to shake things up. He has to restore profitability, revive an ailing stock price and regain market share in mobile handsets -- all while facing pressure from shareholders like Carl Icahn to break up the company.
Brown, 47, who ascended from division chief to president and chief operating officer in four years, acknowledges that he doesn't have the luxury of time to turn around Motorola.
His strategy, he said in an interview conducted via e-mail last week, is to wow the markets with a strong lineup of mobile devices in 2008 and to spark a new sense of urgency into research and development.
"I plan to draw on the talent already here and infuse the organization with new people as well -- to enhance Motorola's profitability, expand our product portfolio, and create value for our shareholders," Brown wrote in an e-mail to the Tribune. "A fresh perspective, along with the right team, can create momentum and results."
Brown said he believes that the crucial battlefront in mobile handsets won't be fought with flashy design, but with functionality. This view aligns with that of many industry analysts, who note that consumers are demanding more from their cell phones, including the capacity to handle intensive media content like video and music; the ability to surf the Web as easily as on a home computer; and the power to link to other devices like digital cameras and televisions.
Undoubtedly, Brown will draw on his software background, having spent nearly three years as CEO of Micromuse, a San Francisco firm that specialized in software for businesses and was acquired by IBM in early 2006.
"Micromuse was a software company, and software is critical to Motorola's future," Brown said. "In handsets -- like in any product -- design, quality and reliability are all key, but I believe that software will be an even more important driver of Motorola's success."
Brown also said, "You have to focus on the markets you can compete and win."
Much of Motorola's fate rests with the mobile division, which accounts for roughly two-thirds of revenues and brought in $27 billion in the first nine months of the year. One thing Brown said he's learned at Motorola is that "talent is crucial." He pointed out last week that in the past few months, while he's been president, the company replaced half of the leadership positions in the mobile devices unit.
Brown takes over for Zander, who announced his retirement earlier this month as chief executive after a tenure that started well but turned troubled after the hot-selling Razr phone cooled and Motorola didn't have an equally successful follow-up. Zander will remain as chairman through May 2008 and serve as "strategic adviser" to Brown, whom Zander tagged as his successor two years ago.
Zander's strategy was "seamless mobility," or making equipment that would allow consumers to easily transport digital content -- for example, watching a television show at home and then transferring it to a hand-held device without interruption. Brown seems inclined to continue on that track.
To accomplish seamless mobility, Motorola has to be competitive in all of its products, from network equipment to cable set-top boxes to mobile phones. The company's trouble so far in harmonizing its various divisions is one reason why activist shareholders have called for a break-up. Brown has inherited this challenge from Zander, whose close adviser -- chief strategy officer Rich Nottenburg -- was recently tapped as interim chief technology officer to replace Motorola veteran Padmasree Warrior, who's now at Cisco.
"There's no doubt that [Brown] has done well by the company from an operational standpoint," said John Jackson, a wireless industry analyst at Yankee Group. "He came from a successful line, albeit one that wasn't as sexy as devices. ... But it's not clear that there's a strategic thread that can weave all these things together in a logical fashion."
Jackson said it could take four quarters for Brown to produce visible results -- "the sell-side equivalent of forever." Motorola's stock is down 21 percent from where it was in January. It closed Friday at $16.30 a share.
The steady worker
Brown's ascent at Motorola has been marked by quiet consistency, which his colleagues describe as suiting the divisions he ran -- businesses that reliably generated revenue for Motorola, but lacked the glamour, dynamism and fast-moving consumer trends that distinguish the mobile device sector. His first job at Motorola was running the unit that made communications equipment for governments and businesses -- some of the same clientele he had served while at Micromuse.
Brown sold Motorola's automotive equipment unit, offloading a business that was no longer profitable. And he negotiated the $3.9 billion acquisition of Symbol Technologies in 2006, stepping in as Motorola's point man on the deal after Zander made the first overtures in 2005.
"He was a hard negotiator, but a fair one," said Sal Ianuzzi, who was Symbol's CEO at the time of the deal and is now CEO at online recruiter Monster.com. Ianuzzi said, "We had a lot of very blunt, very candid one-on-one conversations" over the course of a year, during which Motorola fended off other companies that also came courting.
The addition of Symbol was an important one for both Motorola's revenues and product portfolio for business clients. Motorola already produced network equipment for large areas, but Symbol added a complementary line-up of products for connecting mobile devices to local wireless networks that cover smaller spaces.
"I think [Brown] is always thinking ahead -- he's always thinking what has to happen in the next three months, but also the next 24 months," Ianuzzi said. "It's a key thing that was responsible for the success of the merger."
Milk Duds a vice
Those who know Brown describe him as energetic but even-tempered and straightforward. He's less prone to the off-the-cuff remarks that made Zander a colorful and sometimes unpredictable presence at conferences. Ianuzzi said Brown's greatest vice is Milk Duds -- he sent him 10 pounds of the candy to congratulate him on the promotion to CEO.
"I just found him to be a likable, knowledgeable person -- just a regular guy," said David Stern, commissioner of the National Basketball Association, who's worked with Brown on corporate sponsorships. "When you talk business with him, you understand that he both talks the talk and walks the walk. But he comes across as being the most regular person who's not quite 'Aw, shucks,' but is easily accessible."
Stern, who carries a Motorola Krzr phone, said he talks both basketball and technology with Brown. Richard Brown, Greg's older brother, said Brown has loved basketball since he was young and "was always analyzing sporting teams, strategizing how he could win -- player personnel kind of thinking."
Richard Brown is also a technology industry veteran who most recently was CEO at Plano, Tex.-based Electronic Data Systems, the technology-services firm that Ross Perot founded in 1962.
The two brothers are 13 years apart, the bookends of a set of five children raised by a mathematics-teacher father and stay-at-home mother in South Brunswick, N.J. The age difference meant the two siblings saw little of each other growing up. When Greg graduated from Rutgers University with a bachelor's in economics, Richard said he advised his younger brother to "go to a business that isn't so heavy in bureaucracy and needs some leading-edge thinking. I encouraged him to go toward telecommunications."
When Greg Brown landed at Ameritech early in his career, his brother was already there, rising to become vice chairman. Richard said the two siblings worked in different areas and were careful to keep it that way, though they've watched each other's careers. Richard Brown is no stranger to leading an embattled technology company -- he was forced out of EDS in early 2003 after the company missed profit targets and saw its stock price plummet.
"A lot of what you do as CEO, you have to do alone," Richard Brown said. "The buck stops with the top person. You have to be ready to accept that and own that, and Greg is able to do that."
wawong@tribune.com
To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicagotribune.com.
Copyright (c) 2007, Chicago Tribune
DD, That kind of post is beneath you. You gain nothing by that kind of low blow. MHO
Goldman Sachs cuts Tech Sector
Goldman Cuts Estimates, Targets for Slew of Tech Stocks
posted on: December 02, 2007 | about stocks: ADP / PAYX / GPN / MA / MGI / DOX / CVG / CSGS / SNCR / NTGR / GLW / CSCO / NT / ARUN / JNPR / DELL / DEIX / EMC / ELX / IBM / IVAC / ISLN / LXK / NTAP / JAVAD / BRCD / ACN / BE / SAPE / ACS / CSC / EDS / UIS / CTSH / EXLS / INFY / SAY / WIT / AMD / ATMI / BRCM / ENTG / FORM / IRF / INTC / ISIL / MCHP / MCRL / MRVL / MU / MXIM / NSM / NVDA / TER / TXN / VLTR
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Wary comments by Goldman Sachs Friday morning on the outlook for enterprise technology spending are apparently weighing on tech shares.
Goldman analysts Jim Covello, Sarah Friar and Derek Bingham wrote that they have become “incrementally more cautious on tech fundamentals given the current macroeconomic backdrop,” which suggests soft capital spending in 2008, in particular for the U.S. “We believe CIOs may delay their purchases in the early part of 2008,”they wrote.
The Goldman analysts write that “this is not a call to sell all tech stocks,” and that “while there is likely little upside for some areas of tech,” in particular software, on which the firm turned cautious earlier this week, other areas have underperformed this year, including hardware and semis, and “already likely reflect the pending fundamental weakness.”
That said, Goldman reduced estimates and cut price price targets for many names, “with particular focus on companies with large enterprise exposure and significant dependence on the U.S. consumer.”
The list of companies affected by today’s Goldman call is long:
In the communications sector, they cut estimates and/or price targets for:
* Netgear (NTGR)
* Corning (GLW)
* Cisco (CSCO)
* Nortel (NT)
* Aruba (ARUN)
* Juniper (JNPR)
In the hardware sector, Goldman cut estimates and/or price targets for:
* Dell (DELL)
* Directed Electronics (DEIX)
* EMC (EMC)
* Emulex (ELX)
* IBM (IBM)
* Intevac (IVAC)
* Isilon (ISLN)
* Lexmark (LXK)
* Network Appliance (NTAP)
* Sun Microsystems (JAVAD)
* Brocade (BRCD)
Payment processing companies affected by estimate and/or price target changes include:
* ADP (ADP)
* Paychex (PAYX)
* Global Cash Access (GCA)
* Global Payments (GPN)
* Master Card (MA)
* MoneyGram (MGI)
* Amdocs (DOX)
* Convergys (CVG)
* CSG Systems (CSGS)
* Synchronoss (SNCR)
IT services companies affected include:
* Accenture (ACN)
* Bearing Point (BE)
* Sapient (SAPE)
* Affiliated Computer Services (ACS)
* Computer Sciences (CSC)
* EDS (EDS)
* Unisys (UIS)
* Cognizant (CTSH)
* ExlService (EXLS)
* Infosys (INFY)
* Patini
* Satyam (SAY)
* Witpro (WIT)
Chip stocks affected by estimate cuts and/or price target changes include:
* Advanced Micro Devices (AMD)
* ATMI (ATMI)
* Broadcom (BRCM)
* Entegris (ENTG)
* FormFactor (FORM)
* International Rectifier (IRF)
* Intel (INTC)
* Intersil (ISIL)
* Microchip (MCHP)
* Micrel (MCRL)
* Marvell (MRVL)
* Micron (MU)
* Maxim (MXIM)
* National Semi (NSM)
* Nvidia (NVDA)
* Teradyne (TER)
* Texas Instruments (TXN)
* Volterra (VLTR)
Goldman earlier this week made similar moves on software and analog semis.
Friday’s Goldman calls helps explain the relative underperformance of tech stocks today; while the Dow gained almost 60 points or 0.45%; the Nasdaq Composite is off 7 points, or 0.3%.
New Cost Pressures coming for the phone Manufacturers:
Nov. 30--The wireless industry is embarking on a new era, with open networks and more choices for customers arriving as soon as next year. But the consumer revolution comes with a price -- one that may ultimately slow the pace of change.
As major companies such as Verizon Wireless and Google start championing open phone networks, the wireless market is evolving to give consumers greater say in selecting a handset and loading it with applications. For the independent software developers creating those programs, which could range from music sharing to social networking, the potential for tapping millions of mobile phone users appears lucrative and rapidly approaching.
It's a different story for major handset manufacturers, whose long-standing and complicated marriage with wireless carriers will take far more time to change. The prevailing business model for the wireless industry has brought costs down for users through carriers' heavy subsidies of handset prices.
Therein lies the challenge for phonemakers: Without the carriers, there are no subsidies. And without subsidies, manufacturers will have to ask customers to pay much more for their handset than what they've been accustomed to for years.
Sharp rise in costs
"We can't subsidize our handsets ourselves," said Nokia spokesman Keith Nowak.
If phonemakers start selling many more non-subsidized phones directly to consumers, say, at retail electronics outlets or their own stores, costs would go up sharply. Roger Entner, senior vice president of the communications sector at IAG Research, said subsidies vary widely, but $250 is an approximate figure. In theory, a consumer wanting to purchase a phone from a manufacturer would thus pay not only $250 more to make up for the cost of the carrier's subsidy, but the additional markup for the phonemaker to generate a profit. These days, Entner said, 80 percent of Americans spend less than $100 for their phones.
"You have the challenge that 80 percent spend less than what the device costs," Entner said. "That is a major inhibitor."
Another hurdle is that bypassing the carrier also means giving up the technical support that service providers otherwise offer for the phones they sell. Verizon has said that aside from verifying network compatibility, it won't be responsible for subscribers' issues with outside devices. Customer service is a sticking point for consumers such as Toby Herr, who visited a Verizon store on Michigan Avenue to hunt for a camera phone with a Web browser for under $125.
"When I have a problem, I want it fixed that day," said Herr, 64.
The current relationship between service providers and phonemakers limits consumers' choices of phones and carriers. In many cases, phonemakers sign exclusive contracts with carriers so that certain models are available only through a particular wireless company. This is the case with Samsung's Juke music phone, for example, which is serviced exclusively by Verizon. In other instances, the manufacturers make multiple versions of the same phone to meet the specifications of each carrier, as Motorola did for its new Razr 2.
The carriers' "current business model is really to pick and choose and validate which handsets ultimately make it to their retail outlets and which don't," said Mark McKechnie, an analyst at American Technology Research. "They're like a gatekeeper."
The U.S. model developed because the driver of early growth in the wireless industry came from the carriers, who were eager to sign up as many subscribers as possible and subsidized the cost of handsets for consumers, said Ed Snyder, an analyst at Charter Equity Research. The power rested with the service providers, who were able to request phones to be customized for their networks. The partnerships between carriers and manufacturers also developed to accommodate the alphabet soup of competing technologies -- CDMA, GSM and IDEN -- that proliferated.
Some consumers are willing to pay much higher prices for the phones they want. James Simms, a Verizon subscriber on the fence about switching to AT&T so he can get Apple's iPhone, studied the similar LG Voyager at a Verizon store. The 33-year-old Chicagoan didn't blink at the Voyager's $299 price tag because he already spent that much on his current phone last year. The reason for this year's purchase?
"My phone doesn't fit in my tight jeans," Simms said. "Sleeker is better, right?"
Analysts and industry players say Simms' demographic remains a niche market, one likely to grow as networks open up but unlikely to unseat mass-market practices in the short term.
Technology aficionados
Nowak of Nokia pointed out his company operates two flagship retail stores in the U.S., including one on Michigan Avenue, for "that technology aficionado" who will happily purchase a device for hundreds of dollars that isn't tied to a specific carrier. Nokia's N95, which features a five-megapixel camera, costs $699 at the Chicago location.
Carriers such as "AT&T and Verizon meet the demands of the majority of consumers," Nowak said.
As for smaller manufacturers hoping to get into the handset business, high entry barriers will likely prevent boutique designers from entering the industry. Snyder pointed out that the high technical standards and required economies of scale for cell phones distinguish the industry from other consumer electronics.
"You have to supply this thing in millions of units at a small failure rate," Snyder said. "That makes it very difficult for Joe Blow to get in and supply it on a large scale."
------
To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicagotribune.com.
Copyright (c) 2007, Chicago Tribune
This just hit the wires:
Rating reiterations for Wednesday from Briefing.com:
Company Symbol Brokerage Firm Reiterations
ADC Telecom ADCT UBS Neutral
American Eagle AEO Lazard Capital Buy
American Eagle AEO Friedman Billings Mkt Perform
Analog Devices ADI AmTech Research Buy
Big Lots BIG Wedbush Morgan Buy
Canadian Natrl Res CNQ Friedman Billings Mkt Perform
Canadian Natrl Res CNQ RBC Capital Markets Sector Perform
Casual Male CMRG RBC Capital Markets Outperform
Casual Male CMRG Wedbush Morgan Hold
Dress Barn DBRN CL King Strong Buy
Eli Lilly LLY UBS Neutral
Interdigital Comm IDCC Boenning & Scattergood Market Outperform
Marvell MRVL Friedman Billings Mkt Perform
Marvell MRVL Kaufman Brothers Hold
Merck MRK Bear Stearns Outperform
Micron MU JMP Securities Mkt Outperform
Powerwave PWAV Credit Suisse Neutral
PrivateBancorp PVTB RBC Capital Markets Sector Perform
Rohm and Haas ROH UBS Neutral
Tellabs TLAB UBS Neutral
Wells Fargo WFC Deutsche Securities Hold
Wells Fargo WFC RBC Capital Markets Outperform
(END) Dow Jones Newswires
November 28, 2007 10:30 ET (15:30 GMT)
Careful there good person. Simmer down! You're about ready to cross over a line that you don't want to cross.
In addition to being a "questionable" retraction, it never appeared on the Schwab streamers. Sheesh!
The correction is as bad as the original. Witness the Headline.
http://www.reuters.com/article/marketsNews/idUKWNAS313820071126?rpc=44
Ellis, This guy's on the other side's payroll
Avg Estimate $59.11
Earnings Est Current Qtr
Dec-07 Next Qtr
Mar-08 Current Year
Dec-07 Next Year
Dec-08
Avg. Estimate 0.15 0.22 0.60 0.95
No. of Analysts 6 5 5 7
Low Estimate 0.13 0.15 0.58 0.63
High Estimate 0.17 0.35 0.62 1.50
Year Ago EPS 0.37 0.34 4.04 0.60
Revenue Est Current Qtr
Dec-07 Next Qtr
Mar-08 Current Year
Dec-07 Next Year
Dec-08
Avg. Estimate 59.11M 58.49M 238.24M 248.23M
No. of Analysts 5 4 6 5
Low Estimate 56.99M 52.50M 236.36M 216.80M
High Estimate 61.57M 63.07M 240.95M 263.00M
Year Ago Sales 65.07M 67.82M 480.47M 238.24M
Sales Growth (year/est) -9.2% -13.8% -50.4% 4.2%
Looks like, AAPL's changing the Browsing/Buying experience:
Apple Retail Stores Revamp for Holidays
Published: November 24, 2007
Filed at 1:31 a.m. ET
LOS GATOS, Calif. (AP) -- Not a cash register is in sight. The electronics on display are all powered up and ready for use. Personal trainers, specialists and newly minted concierges in aqua blue shirts make the Apple Store feel part salon, part Internet cafe -- just without the espresso.
Over the past year, Apple Inc. has revamped its 201 stores, changing the layout, adding services and increasing its staffing. The ''concierge'' service that Apple launched last week is only the latest initiative designed to draw more visitors and bolster already record-breaking sales.
''Apple indeed does things differently from the rest of the retail gang,'' said Kurt Barnard, president of the Barnard Retail Consulting Group.
Clipboard-carrying concierges greet customers at the door to direct them to the right section of the store or to the personal shopper or trainer with whom they had made an appointment. Several others mill the floor in case someone has a question or is ready to buy an iPod, an iPhone or a Macintosh computer.
With cash registers removed, a common question nowadays is, ''Where do I pay?'' The store employee would instantly reply, ''Right here,'' and whip out a portable scanner from a hip holster. Receipts are e-mailed on the spot or, if the customer prefers, a paper version emerges from printers hidden underneath display tables.
The products are usually brought in from storage in the back, but starting Friday and through the holiday season, Apple has designated an ''express shopping'' section, with inventory on the store floor ready for purchase.
A few customers who were using cash on Black Friday, though, experienced some delays, said Glenn Branney, who was visiting from Belfast, Northern Ireland, and bought an iPod Touch and iPod Nano before dawn at Apple's flagship store on New York City's Fifth Avenue.
Apple started eliminating checkout areas at stores last year and has now finished arming each store employee with handheld scanners for faster transactions.
That has freed up space for shiny wares or one-on-one consultations. The 11-foot counter used in the past for the ''Genius Bar,'' the in-store technical support section, has been extended to about 35 feet per store.
It's not uncommon to find people dropping in to hang out, use the Internet or let their children play on the Macs on low-legged tables. Personal blog entries, complete with snapshots of the authors in the store, are sometimes written on the spot.
''We try to pattern the feeling to a 5-star hotel,'' said Apple's retail chief, Ron Johnson. ''It's not about selling. It's about creating a place where you belong.''
Nonetheless, sales are flying high.
The retail stores hosted more than 100 million visitors and produced about $4.2 billion in revenue in Apple's fiscal year that ended in September, up nearly 24 percent from $3.4 billion the previous year -- in line with the Cupertino-based company's overall sales growth.
The ''one-to-one'' personal training service that Apple stores launched two years ago is also becoming more popular, Johnson said. He declined to give specific growth figures.
For $99 a year, a customer gets up to one hour a week to learn about a wide-range of subjects tailored to the customer's interest or abilities. The program is for beginners and experts alike and can cover how to set up computers, make movies, build Web sites or put together a scrapbook or family newsletter.
Analysts say Apple's approach to retailing is exemplary in the industry. But most merchants don't have the same concentration of products or the coveted gizmos that are luring people to Apple to begin with, many for the first time.
''Nothing responds more quickly in attracting consumers than a new experience and a new merchandise assortment,'' Barnard said. ''And Apple has that going for it.''
Apple has sold more than 120 million of its market-leading iPod digital media players, introducing millions of people to Apple's design aesthetics.
And Apple says that more than half of the computers sold at Apple stores are to people new to the Macintosh platform. After hovering for years with a 2 percent to 3 percent share of the PC market in the United States, Apple's slice has now grown to 8 percent, according to market researcher Gartner Inc.
The iPhone, launched in June as Apple's first foray in the cell phone market, has also brought newcomers, Johnson said.
The stores are ''the front face for Apple now,'' Johnson said. ''And we've got so many new customers that we really have to help them understand our services.''
------
Associated Press staff writer Adam Goldman contributed to this story from New York.
OT mschere - LOL - Good catch!
OT- lastchoice, I don't know who these people at trustmuch are, but with a typo on their opening page, they sure don't inspire a whole lot of confidence.
From - The Skeptic: Nokia Slogs It Out With QCOM:
By Angelo Franchini
A DOW JONES NEWSWIRES COLUMN
LONDON (Dow Jones)--Nokia's second defeat in two months in its legal wrangle with Qualcomm should make investors wonder whether it's the company or its lawyers that stand to benefit the most from taking on its U.S. rival over mobile technology patents.
But the hundreds of millions of dollars at stake for Nokia, quite apart from the fundamental are a strong argument in favor of pursuing its case through Europe's courts.
That said, even a company of Nokia's heft and track record needs to pick its battles carefully when it's operating in as fast-moving a sector as mobile telecommunications.
At stake are the royalty fees Nokia has been paying to use the CDMA mobile technology, a standard for the mobile phone industry, mostly developed by Qualcomm.
Those fees are between 4% and 5% of the average wholesale price of Nokia's phones. Some analysts estimate Nokia was paying Qualcomm about EUR340 million a year before the patent expiry but others put it nearer EUR1 billion.
The Dutch court ruled against Nokia's objections to Qualcomm's patent demands Wednesday, and ordered Nokia to pay legal costs amounting to about EUR2 million.
Nokia has about another 10 intellectual property right cases pending in courts around the world, suggesting a minimum, optimistic annual cost of EUR20 million.
A more conservative estimate of the legal expenses that Nokia might nearer EUR140 million which is one estimate of the legal fees that Qualcomm may have to pay in 2007, though Qualcomm has other litigation on its hands.
A saving of at least EUR200 million for the coming year, not to mention the forward annual savings once the legal battle is won, against the worst-case scenario of a possibly one-off EUR140 million loss, make the fight worthwhile.
And when intangibles like IPR make up to two thirds of a company's market value, as it is the case for leaders in the technology industry, a strenuous defense of such assets is all the more important.
The issue for Nokia is more one of picking up the right fight and finding allies, while avoiding the scattergun approach of its recent suits in Germany and the Netherlands.
Nokia has sided with Ericsson, Broadcom, Texas Instruments, NEC and Panasonic Mobile Communications in asking the European Commission to investigate Qualcomm's licensing fees.
The request was filed two years ago. The EC's antitrust division asked for Qualcomm's feedback to its preliminary inquiry only on Oct. 1.
That's a long time for Nokia to wait when there's so much money at stake, hence Nokia's frustration, and decision to pursue Qualcomm on a country-by-country basis. The problem is that Nokia's lawyers seem to have done a sloppy job, at least in the Netherlands, in presenting its case.
Nokia has received strong verbal backing from Ericsson in its fight with Qualcomm, but so far the Finnish company is the only handset maker whose contract with Qualcomm has expired, so it can't expect much more than that for now.
Legal wrangles are complex enough at the best of time, so if Nokia needs to keep fighting Qualcomm through Europe's courts, it needs to get its act together or try a different approach in terms of protecting its intellectual property without wasting shareholders money.
(Angelo Franchini, a Special Writer on Dow Jones Newswires' Skeptic team, has previously worked in research and development in the biotechnology and software sectors. He can be reached at +44 20 7842 9458 or by e-mail: angelo.franchini@dowjones.com)
TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackEurope@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments
(END) Dow Jones Newswires
November 15, 2007 10:37 ET (15:37 GMT)
For some outspoken opposition to the Patent Reform Act, read:
http://news.google.com/news?client=safari&rls=en&ie=UTF-8&oe=UTF-8&tab=wn&ncl=1123184581&hl=en
OT Sonetirot - Cramer thinks you're on to something good. One of his 4 Horsemen of China.
BIDU
BAIDU.COM
:: News :: Charts :: Community :: Stats
Recently Added By:
Pro: Essex Investment Management
Pro: Oberweis Asset Management
Pro: Pequot Capital Managment
Michaelid : dov's techs
ele : ele Portfolio 1
Price : 385.95
Change : 0.00
% Change (for day) : 0.00%
People owning BIDU also tend to own:
AMAT AMT AMX FMCN KRY RACK STP
TheStreet.com Rating: C-
What is this?
What amazed me, oddly, was that any of the critics really thought I believed that Baidu "deserved" to be at $500. I could care less what Baidu's worth. I care about what it could trade to. I couldn't care less if it is "overvalued." Of course it is overvalued. It was overvalued at $100, $200 and now $300. Oh, and stop trading, it will be overvalued at $400.
OT - No wonder NOK's margins are so good....LOL
HELSINKI (AP)--Some 3,000 technological workers in Finland began a strike Monday after wage talks with employers broke down over the weekend.
The technicians' strike, called by the 120,000-member Union of Salaried Employees, targeted selected plants of seven Finnish companies, including stainless steel maker Outokumpu Oyj (OUT1V), shipbuilder Aker Yards Oy (AKER.OS)and metals group Wartsila Corp (WRTBV.HE).
If no agreement is reached in labor talks the union will expand the strike on Oct. 30 to 20 more companies, including the world's largest mobile phone maker, Nokia Corp (NOK) and forest products group Metso Corp (MEO1V.HE), officials said.
National Conciliator Juhani Salonius, who mediated the talks between the union and employers, said the two sides were too far apart for him to propose a solution.
"We demanded 8.5% (wage hike) but the employer offered only 5.9%," union president Antti Rinne said.
There were no immediate plans to continue negotiations, officials said.
(END) Dow Jones Newswires
October 22, 2007 06:11 ET (10:11 GMT)
QCOM's P. Jacobs says it will adjust its tactics following court losses
By Jeffry Bartash
While Qualcomm Inc. (QCOM) plans to stick to its overall legal strategy in a growing patent war with rivals, Chief Executive Paul Jacobs says the wireless company will adjust its tactics following a string of court losses.
Jacobs told reporters Wednesday at a breakfast in Washington that he believes the San Diego company still holds a winning hand in its effort to defend its substantial portfolio of patented technology.
But he warned that investors should not expect a quick resolution of the issues that are currently being litigated with rivals such as Broadcom Corp. (BRCM) and Nokia Corp. (NOK).
"Some of this technology is complicated and the distinctions are subtle," Jacobs said about the patent disputes. "The process does work, but it gets stretched out a fairly long time."
Qualcomm's stock has seesawed repeatedly over the past year with the ebb and flow of court and regulatory rulings.
Qualcomm, a maker of chipsets and other technology used in wireless phones, has suffered several legal defeats this year at the hands of rival Broadcom.
In its most recent loss, the vendor was slapped with an injunction by the International Trade Commission after the agency found that Qualcomm infringed on patents held by Broadcom.
The company lobbied the Bush administration to veto the ITC ruling, but the White House declined to get involved.
"We knew it was a long shot," Jacobs said. "It's not a thing that most administrations would have done."
Qualcomm did receive some good news earlier this month when the U.S. Court of Appeals in Washington, D.C., granted a stay on the ITC injunction, which banned the import of wireless handsets containing Qualcomm's chipsets.
The company's technology is used by millions of wireless customers who subscribe to the services of such providers as Verizon Wireless, Sprint Nextel Corp. (S) and Alltel Corp. (AT).
In the meantime, Jacobs said the company is getting closer to hiring a new general counsel to oversee litigation of the company's numerous patent disputes. Longtime legal advisor Lou Lupin resigned in August and was replaced on an interim basis by former U.S. Attorney Carol Lam.
Despite the shakeup in Qualcomm's legal team, Jacobs said the company would continue to appeal the Broadcom decision and fight its other rivals in court.
"From a strategic standpoint, we're not fundamentally changing our strategy," Jacobs said. "We are changing our tactics."
Another thing unlikely to change soon is the dispute between Qualcomm and Finnish mobile-phone giant Nokia over patent claims and cross-licensing fees. A prior cross-licensing agreement expired April 9 and has not been renewed.
Nokia and other competitors such as Ericsson LM (ERICY) and Texas Instruments Inc. (TXN) have demanded lower cross-licensing fees - the money paid to use proprietary Qualcomm technology. As part of the dispute, they've also challenged the legal basis of Qualcomm's patents.
Jacobs said that neither side has ceded much ground and that it probably would take outside intervention to resolve the dispute. That could involve a clear-cut legal victory or pressure by suppliers and mobile-phone carriers on both companies to compromise.
"We've been talking a very long time and there's been very little progress," he said.
Jacobs also expressed skepticism about current efforts in Congress to reform patent-protection laws. He said the bill under consideration would too heavily favor large, established companies at the expense of innovative startups.
Had such rules been in place years ago, he said, "we never would have been able to build a company."
A tiny startup when it was founded in 1985, Qualcomm has transformed itself into a $67 billion company whose once-doubted but innovative technology has shaken up the wireless world.
"We still look at ourselves as a David," mused Jacobs, "but when we walk into court, people look at us like we're Goliath."
-Jeffry Bartash; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
September 19, 2007 13:28 ET (17:28 GMT)
IDCC show and tell
KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--
InterDigital, Inc. (NASDAQ:IDCC) today announced that a company executive will present at the America's Growth Capital Fourth Annual Emerging Growth Conference. The presentation will take place on Thursday, September 20, at 9:30 a.m. Eastern Time at the Sheraton Boston Hotel in Boston, MA.
A company executive will present InterDigital's strategy, an update on the business, and the company's unique positioning to capitalize on growth trends in the wireless industry. The presentation will be web cast live and archived for replay for one month following the conference in the Investing section of InterDigital's web site.
From another Board:
More on the Patent Reform Bill -
September 6, 2007
The House vote on H.R. 1908, the Patent Reform Act of 2007, is scheduled for Friday, but rumors are flying that the Democratic leadership will pull the bill because of voiced opposition by organized labor. Trepidation is palpable.
Some information that recently flowed this way -
A sophomoric YouTube video; unnecessary adjective: YouTube is nothing but sophomoric videos. Oh, but we have our fun.
A summary of amendments submitted to the Rules Committee for H.R. 1908.
The Republican Study Committee preliminary assessment of H.R. 1908, and comments on the July markup from Republican Rep. Lamar Smith, a proponent.
Comments on PRA 2007 from universities (from May), and a letter from the presidents and chancellors of the "Big Ten" universities to the leading Senators on the Judiciary committee (from June), expressing concerns on various issues.
Posted by Patent Hawk at September 6, 2007
From another Board. Another view.....
POPA - the Patent Office Professional Association, comes out against The Patent Reform Act
September 2, 2007
If there is any single interest group sincerely interested in a quality patent regime for its own sake, as point of professional pride, it is patent examiners. POPA, the examiners' professional organization, is firmly against the Patent Deform Act of 2007.
What is most significant is that no one in Congress thought to ask POPA, as the statutory sausage had been stuffed by bribes from geek boys in the computer biz who just want to get on with da bidness of intellectual property theft, and paying no mind, or tab, for doing so.
In an open letter, doubtlessly for those in Congress willing to see somewhat beyond their wallet, POPA pops off:
The proposed Patent Reform Act of 2007 (S. 1145 and H.R. 1908) would make many significant changes to the U.S. Patent System. The Patent Office Professional Association (POPA) believes, however, that a number of these changes would actually hurt rather than help the patent system.
On requiring a prior art search from patent applicants (an "Applicant Quality Submission (AQS)") -
A good idea on its surface, but the devil is in the details.
There is no reason to believe that the Applicant Quality Submission will put better information in front of the examiner during prosecution than is already provided for by 37 C.F.R. § 1.56. Nor is there any reason to believe that the USPTO will provide any more time to examiners to consider this additional information.
The only real potential benefit to the Agency of the AQS is to increase efficiency by taking time away from examiners to search and have them rely upon the AQS as the search of the case. This is tantamount to outsourcing the search to the patent applicant and would contravene the protections on outsourcing set forth in 35 U.S.C. 41(d) as amended by Title VIII of H.R. 4818, the Consolidated Appropriations Act of 2005. POPA believes this would negatively impact the quality and integrity of the patent system.
On gutting inequitable conduct -
[T]he legislation would make it more difficult to invalidate a patent on the basis of inequitable conduct of patent applicants or their agents.
[W]hile the USPTO would now require Applicant Quality Submissions to be submitted by all applicants, making inequitable conduct less of a threat removes the very enforcement mechanism the agency would use to insure the quality of the AQSs.
On granting the patent agency greater leeway in fee setting -
POPA is very concerned of giving the agency broad rule-making authority to set fees.
Taking the authority to set or create new fees away from Congress and giving it to the agency, would hinder the ability of the American public to have a strong voice, through Congress, in determining agency direction and actions. Further, this level of fee setting authority could allow the agency to change fees in such a way as to eliminate the outsourcing protections of 35 U.S.C. 41(d).
On eliminating the best mode requirement -
The best mode requirement of 35 U.S.C. § 112 represents the very quid pro quo of the patent system. The U.S. Patent System is based on disclosure of inventions to the American people. In exchange, the American people grant an inventor the exclusive rights to his/her invention for a limited time. To eliminate the best mode requirement from the patent law would permit applicants to gain a limited monopoly on their invention and yet not put the full disclosure of the invention into the public domain. Eliminating the best mode requirement would significantly diminish the very worth of the patent system, i.e., to disclose information to the American public.
Hat tip to David Vandagriff of Helius.
Posted by Patent Hawk at September 2, 2007
From another board - IEEE objections to Patent Reform Bill
Engineering Failure
August 27, 2007
In a letter to Sen. Harry Reid, Senate Majority Leader:
IEEE-USA, which represents the interests of more than 215,000 engineers, scientists and allied professionals in the U.S., opposes the Patent Reform Act of 2007 (S. 1145). We believe that much of the legislation is a disincentive to inventiveness, and stifles new businesses and job growth by threatening the financial rewards available to innovators in U.S. industry. Passage of the current patent reform bill language would only serve to relax the very laws designed to protect American innovators and prevent infringement of their ideas.
Continuing with the letter:
IEEE-USA believes that, left as is, the patent reform legislation will create an environment that is harmful to individual inventors and small businesses. We are concerned that S. 1145 favors the companies with the financial resources that enable them to tread on others’ patent rights by commercializing works and inventions they did not create.
IEEE scoffs at the "microentity carve-out," and opposes: revision of § 102; post-grant review; apportionment of damages; letting USPTO management run amok with rule making, as it already has; third-party prior art submission; mandatory application publication; and first-to-file.
On post-grant review:
The proposed post-grant procedures could be used by large entities as a tactical litigation delay (of up to one-and-a-half years), giving larger businesses an unnecessary competitive advantage. Post-grant procedures may also cloud the validity of issued patents, thus reducing the value of patents held by start-up companies and universities (particularly, from the view of venture capitalists).
On third-party prior art submission, IEEE fears inequity:
[P]re-issue submissions could be used disproportionately by large corporations to block smaller entities attempting to protect innovations. Large corporations have the resources to research and follow the patent applications of start-up companies which are potential competitors. On the other hand, start-up companies have minimal resources to operate their endeavors, and likely do not have the time and resources to follow and submit prior art against the patent applications of large corporations. Accordingly, there will not be an equal level of scrutiny and prior art submission for all patent applications, creating a varying presumption of validity for patents.
IEEE is wrong about third-party prior art submission. Patents shouldn't be granted unless valid. That exceptions occur isn't a good excuse for making that regular practice, which is how we got here in the first place: lax examination during the 1990s. If a patent is granted over third-party prior art submission, its presumption of validity de facto is that much stronger. Let large corporations get their patents under less scrutiny. Any patent worth its salt ends up in court anyway, because nobody takes a first license without putting up some kind of fight, and, with the state of ease for declaratory judgment, the only safe way to enter licensing negotiations is for the patent holder to initially file a court complaint.
A similar letter was sent to Rep. Nancy Pelosi, House Majority Leader.
The big picture is that IEEE drives one more nail in the coffin of the the Patent Deform Act of 2007, and that's a good thing.
Posted by Patent Hawk at August 27, 2007