Wednesday, January 29, 2014

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Apple losing in China

Posted: 29 Jan 2014 01:37 AM PST

While the Tame Apple Press was trying to tell the world that Apple was going to do well in China, TechEye received a good kicking from Apple Fanboys for daring to say it was not going to happen.

Well it looks like we were right and anyone who invested in Jobs' Mob would have a case for suing the New York Times and its ilk for trying to talk up what was obviously false.

Apple is in trouble anyway - it had a disappointing March-quarter revenue forecast, coupled with surprisingly weak holiday iPhone sales, but what is interesting is how much the Tame Apple Press over-estimated initial demand from China Mobile's 700 million-plus subscribers. This 30 million units a year over-estimation pushed Apple's share price up 18 percent higher in the fourth quarter.

The shortfall raises doubt about the country's appetite for its devices as well as broader concerns about flagging global demand for smartphones and tablets. Apple and China Mobile struck their deal in December, and iPhones went on sale in January.

The reason for the failure however was obvious. Apple was going to trot out its same business model in China that it did elsewhere using products which were expensive and more or less the same as that which was already in the market. After all that works in America, where Apple Fanboys have dosh to spend and tend to fall for marketing easily.

However in China, not only are buyers more sensible, they also have a lot less money to waste. The iPhone was selling for $740 which is about a tenth of the average urban income of $7,600. There was also insufficient high-speed 4G wireless coverage to make the phone worthwhile and persistently stiff competition from local players such as Huawei and Xiaomi.

Apple arrogantly refused to adapt and evolve for the Chinese market. Its doom was obvious. So what are the Tame Apple Press saying about this disaster and their own inability to see the obvious? Its iPhone 5C, which many had hoped would finally grant it an unassailable foothold in the market, was just $100 cheaper than the high-end 5S.

Apparently iPhone buyers may also be waiting for the next iteration, which is widely rumoured to adopt the larger screens that Samsung Electronics and other rivals have proved can be more popular with Asian buyers!

That is right, Apple is going to produce yet another expensive handset following the design of its more competent rivals. Yeah, that should do it. People often buy a more expensive version of technology which is already out there.

The other part of the reality distortion field is claiming that Apple will do better when China Mobile's high-speed 4G mobile networks start to spread. There are only 16 cities covered so far.

However that bonus will work in favour of all Apple's rivals too, who all have 4G offerings ready at a price which is much cheaper than Jobs' Mob.

Yesterday Apple CFO Peter Oppenheimer and Cook argued that investors should not be too fixated on that sales forecast, saying underlying demand remained strong. In other words don't look at the quality feel the width.

While Apple still keeps doggedly hanging on to its increasingly out of date business model it is going to get more and more of a kicking from its rivals. 

AMD preps eight-core ARM sample

Posted: 29 Jan 2014 01:49 AM PST

AMD's Andrew Feldman has told the assorted throngs at the fifth annual Open Compute Summit that the company is preparing to sample its new eight-core ARM SoC with the codename of Seattle.

It has been known that AMD was working on its own ARM server core, but announcing imminent sampling means that the company is confident of shipping the part soon.

Hot hardware said that there are a lot of maybes about Seattle.

While the eight-core chip isn't HSA compatible, it's not clear what GPU IP is used to provide a video signal. It seems that AMD is pushing into the market with a chip it could bring to market quickly, rather than working to integrate a custom IP solution based on ARM's own designs.

AMD is claiming that the eight ARM cores offer 2-4x the compute performance of the Opteron X1250. This is not too difficult, after all the X1250 is a four-core chip based on the Jaguar CPU, with a low clock speed of 1.1 - 1.9GHz. The Seattle cores clockspeed is one of life's mysteries, but the embedded roadmaps AMD has released show the ARM embedded part targeting a higher level of CPU performance than the Jaguar core.

Feldman believes that ARM cores could account for a quarter of the datacenter market by 2019, with a great deal of custom work being done between a major server owner like Google, Facebook, or Microsoft, and the vendors that supply those servers. The implication is that chips may be customised for small, highly specific workloads and relatively low production runs between companies.

Feldman predicted that x86 will still be the king of the server market, but that more workloads will have shifted to highly efficient x86 processors.

However, Feldman insisted that AMD would be at the forefront of the ARM server revolution. If it manages to do so, it would give AMD a powerful anchor in an emerging segment in years to come. 

Yahoo's results are a real Yahboo sucks

Posted: 29 Jan 2014 01:48 AM PST

The reason why Chief Executive Officer Marissa Mayer's fired Chief Operating Officer Henrique de Castro last month have become abundantly clear in its fourth quarter results.

Yesterday she had to announce that Yahoo's overall revenue fell six percent in the last three months of the year to $1.266 billion, marking four consecutive quarters of eroding revenue. The company said that prices for both online display ads and search ads declined in the fourth quarter.

Yahoo online ad prices slid again in the fourth quarter and Alibaba, the Chinese e-commerce giant in which it owns a big stake, saw revenue growth decelerate.

Yahoo's shares were down 3.7 percent at $36.82. What is bad for Yahoo is that the figures should have been for its best quarter which means that its core business is shrinking.

Mayer has been aggressively to trying to improve the company with product makeovers, acquisitions and big media hires. But the ad sales business continues to struggle at a time when rivals such as Google, Facebook and Twitter are posting strong revenue growth.

To be fair, Yahoo's stock has more than doubled since Mayer, a former Google executive, took the helm in July 2012. However, analysts say much of the gain is due to aggressive stock buybacks and the expected IPO of Alibaba, in which Yahoo owns a 24 percent stake.

Yahoo bought back $3.3 billion worth of its stock in 2013, the company said.

The Chinese company's revenue increased 51 percent year-over-year to $1.776 billion. While still robust, that growth rate was slower than the 61 percent clip that Alibaba delivered in the second quarter and the 71 percent growth rate in its first quarter.

Yahoo said that net revenue, which excludes fees paid to third-party websites, would range between $1.06 billion and $1.1 billion in the first quarter.

In the fourth quarter, Yahoo's revenue from display ads was down 6 percent year-over-year, while the price per ad, excluding Korea, fell seven percent.

Yahoo's fourth-quarter net income of $348.2 million rose from the $272.3 million earned in the year-ago period 

Oracle cracks down on third party software support

Posted: 29 Jan 2014 01:45 AM PST

Oracle has widened its war against third-party software support providers it claims are violating its intellectual property.

Last week, Larry Ellison set his legal hounds onto StratisCom, a Georgia company that offers customers support for Oracle's Solaris OS. Oracle claims that StratisCom had "misappropriated and distributed copyright, proprietary software code, along with the login credentials necessary to download this code from Oracle's password-protected websites."

Oracle said in its complaint filed in the US District Court for the Northern District of California that StratisCom had taken, or facilitated the taking of software patches and updates for Oracle's proprietary Sun Solaris and 'Solaris Updates. Once StratisCom distributed a copy of the entire Solaris operating system itself, Oracle moaned.

StratisCom was a subcontractor hired by DLT Federal, which Oracle sued in 2012 on similar grounds. DLT hired StratisCom to work on a number of US government accounts, including the US Space and Naval Warfare Systems Command and the Food and Drug Administration.

DLT gave customers a phone number to call in requests for support, which was answered by StratisCom workers.

The latest lawsuit's language is similar to something Oracle brought against third-party Solaris support providers, Terix and Maintech. Its lawyers did not get all of their own way. A judge dismissed Oracle's assertion those companies engaged in software trafficking, but declined to dismiss a number of other Oracle claims.

However, companies and others have maintained they operate within the bounds of their customers' licence agreements with Oracle. 

Qualcomm about to have a China crisis

Posted: 29 Jan 2014 01:28 AM PST

US chipmaker Qualcomm is about to be bitten in the rump with a record $1 billion fine by the Chinese antitrust watchdogs.

China's National Development and Reform Commission (NDRC) investigated Qualcomm last year and according to Reuters is having a quiet word with the US outfit.

Qualcomm has said it was still in the dark about the basis of the scrutiny, but it seems the NDRC is targeting IT providers which license patent technology for mobile devices and networks.

Cynics claim that the Chinese are using the NDRC to force foreign IT companies to lower domestic costs as it rolls out its faster 4G mobile networks this year.

What the NDRC is doing is trying to force Qualcomm to make all sorts of commitments regarding its technology and the licensing of it.

Qualcomm will make a bomb in licensing fees for the chip sets used by handsets in China, the world's biggest smartphone market as Chinese telecom firms invest $16.4 billion in equipment for 4G networks.

Under China's anti-monopoly law, the NDRC can impose fines of between 1 and 10 percent of a company's revenues for the previous year. Since Qualcomm earned $12.3 billion in China for its fiscal year ended September 29 that could be a serious amount of dosh.

The fine could be even higher if Qualcomm fails to make concessions in its talks with the NDRC.

In December, the head of the NDRC's anti-price-fixing bureau told state media there was "substantial evidence" against Qualcomm in the antitrust probe. Details, however, remain sketchy.

But there could be a lot more foreign outfits in a little trouble in big China. China's regulators are trying to target key industries to shield consumers from practices that could lead to what they call "unreasonably" high prices.

In 2011, the agency imposed one of its first major penalties against a foreign company, a $300,000 fine on Unilever Plc for violations of the pricing law.

The NDRC has also slapped Chinese and foreign companies with investigations and fines in the past year. 
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