Samsung mobile phone shipments up 22%, prices under pressure

Samsung mobile phone shipments up 22%, prices under pressure
(Telecompaper) Samsung Electronics announced second-quarter revenues of KRW 37.89 trillion, up 17 percent year-on-year. Operating profit rose 88 percent to KRW 5.01 trillion, and net profit improved to KRW 4.28 trillion from KRW 2.33 trillion a year ago. The results were in line with the company’s earlier forecast, with growth driven by a recovery in its components and semiconductors business, helping to offset price pressure in consumer electronics. “With intensified competition throughout the digital media and mobile industries going forward, it may become a challenge to maintain current profitability levels,” said Robert Yi, head of Samsung Electronics’ investor relations “However, we will continue to focus on introducing differentiated products and widening our technology leadership in components to meet these difficult market conditions.” Strong seasonal demand for core components is expected to drive Samsung’s performance in the third quarter, although increased market supply is also forecast. Samsung forecast that continued price competition in its CE businesses will put downward pressure on profit margins in the third quarter. Samsung’s telecom division posted an operating profit of KRW 630 billio in Q2, down from KRW 980 billion a year ago, on revenue down 4 percent to KRW 8.78 trillion. The operating profit margin fell to 7.2 percent from 10.8 in Q2 2009, as competition caused a slight decline in the average handset price and earnings were affected by the fall in the euro. Samsung sold 63.8 million handsets during the second quarter, an increase of 22 percent year-on-year but down slightly from 64.3 million in Q1 due to a slowdown in Europe. The recently launched Galaxy S and Wave handsets made little contribution in the quarter but are expected to help grow H2 sales. Samsung forecast high single digit sequential growth in shipments for the third quarter. Touch-screen mobile handsets made up 30 percent of Samsung’s unit sales during the second quarter, compared with 15 percent a year ago. Samsung said it will also launch a range of mid-end smartphones as part of its strategy to provide mobile devices for every lifestyle.[Lees verder]

Softbank’s Q1 sales boosted by mobile unit
(Telecompaper) Japanese communications provider Softbank saw its first quarter net sales grow over 5 percent while income dropped almost 30 percent. Net sales in the three months to June totalled JPY 700.84 billion, up 5.2 percent from JPY 666.33 billion in the year-ago period, reflecting steady sales at Softbank Mobile. Operating income went up 44.6 percent to JPY 156.60 billion, and ordinary income rose 61 percent to JPY 126.84 billion, driven by earnings growth in the mobile communications segment due to an increase in the number of mobile subscribers and an increase in ARPU. Softbank recorded a net income of JPY 19.44 billion, down 29 percent from JPY 27.38 billion a year earlier, mainly due to an increase in total income taxes. For the full year, Softbank expects operating income of JPY 500 billion, up 7.3 percent year-on-year.[Lees verder]

Docomo unveils LTE brand, corporate vision
(Telecompaper) Japanese mobile operator NTT Docomo has unveiled a new brand and logo for its upcoming LTE services and a new corporate vision. The LTE brand name is written “Xi” and read as “crossy.” Docomo says the The ‘X’ denotes both ‘connection’ and ‘infinite possibility’, and the ‘i’ both ‘individual user’ and ‘innovation’. Docomo’s Xi LTE service, which is scheduled for launch in December, will offer downlinks of up to 75 Mbps. Initially, Xi will be available in the Tokyo, Nagoya and Osaka areas, but coverage eventually will be expanded to other major cities and then additional areas of the nation. Xi users will be seamlessly handed over to the Foma network whenever they leave a Xi service area. Xi handsets, billing plans and other details will be announced later. The new corporate vision has been dubbed “Pursuing Smart Innovation: HEART” and seeks to achieve new growth by delivering new value to customers. For the past 10 years, the operator implemented its Vision 2010 corporate vision to create a new communications culture by delivering diverse services and enhanced value to customers and society. Under its new vision Docomo intends to use its innovation efforts to align its continued growth with the challenges and opportunities of the next 10 years, including accelerating globalisation, environmental protection, and the increasing spread of broadband. The company expects to partner with a broad range of companies to drive innovation.[Lees verder]

Telecom NZ sells part of AAPT, stake in Macquarie Telecom
(Telecompaper) Telecom New Zealand will sell the consumer division of Australian unit AAPT to Australian ISP iiNet for AUD 60 million. The transaction is subject to iiNet shareholder and customary regulatory approvals. Telecom currently estimates the transaction will have a net negative impact on AAPT’s FY 2011 EBITDA of around AUD 10 million. Telecom also announced that is has sold its 18.2 percent stake in iiNet to institutional and sophisticated investors for approximately AUD 70 million. The carrying value of this investment was AUD 81 million at 30 June. Furthermore, the company sold its stake in Australian business communications services provider Macquarie Telecom for AUD 9.9 million. The carrying value of this investment was AUD 9.5 million at 30 June. When combined, the proceeds from the sale of Telecom’s 10.1 percent stake in Macquarie Telecom, the sale of AAPT’s consumer division and sale of the 18.2 percent stake iiNet will generate approximately AUD 140 million of sale proceeds for Telecom. AAPT will now focus all its effort on leveraging its tier 1 network infrastructure to deliver voice, data and internet solutions to the wholesale and business market. With the sale, iiNet will gain around 113,000 broadband subscribers and over 251,000 other active services to bring iiNet’s broadband subscribers to more than 652,000 and total active services to more than 1.33 million.[Lees verder]

Best Buy to use Clearwire network for Connect service
(Telecompaper) US retailer Best Buy has agreed to resell Clearwire’s Wimax service as part of its recently launched Best Buy Connect mobile internet service. Best Buy will launch the service based on a wholesale deal with Clearwire in 2011. This is Clearwire’s first wholesale agreement beyond those with its shareholders – Sprint, Bright House, Time Warner Cable and Comcast already sell the Wimax service under their own names. The Best Buy Connect service currently uses the Sprint mobile network. Best Buy said the deal will help it develop a ‘one-stop shop’ for mobile phones, accesories and services.[Lees verder]

India amends licences for network equipment security checks
(Telecompaper) The Indian government has issued changes to telecom operator licences requiring them to address security concenrs among their foreign network equipment suppliers. According to a report from the Economic Times, the government can impose penalties of up to 100 percent of the contract value if any spyware or malware is found in their imported equipment. International manufacturers who want to do business in India will have to deposit source codes and detailed designs of all products and services they sell in an escrow account in encrypted form. This can be accessed by security agencies and operators in case of an emergency. The new rules will be incorporated into the licence agreements of all telecommunication companies with immediate effect. The new norms published by the department of telecom were issued after security agencies and the home ministry raised concerns about imported equipment, especially those sourced from Chinese companies. They also equipment makers who maintain and manage mobile networks in India to employ only Indian engineers; they will have two years to comply with this. Vendors who maintain networks also will be subject to the country’s data protection laws. This implies that they can be prosecuted in India if they are found to have leaked any information or for any security breach. The government has also asked all mobile operators to submit their organisational policy on security and security management of their networks within 30 days. Mobile operators will have to get security clearance from the home ministry and third-party audits on core equipment before they can be imported. DoT also said that it was working towards setting up the Telecom Security Council of India to help increase security assurance levels. The council would be jointly funded by the government and the telecommunication industry. The new rules will also allow the centre to lift the temporary ban on 26 companies, including Chinese OEMs such as Lenovo, Huawei Technologies, ZTE, Sunsea Telecom, UTStarcom, Tongyu Communications, Wuhan Fibrehome International, Shenzhen Grentech, Maipu Communications and Israel-based Comverse from supplying mobile gear in India. Telecommunications equipment can now be imported from these companies after audits by internationally certified network security firms.[Lees verder]

Netia arranges new financing for potential acquisitions
(Telecompaper) Polish operator Netia signed a mandate letter with Rabobank Polska, Raiffeisen Bank Polska and BRE Bank regarding new financing for potential acquisitions and terminated the existing credit facility with Rabobank Polska, the lead arranger of the loan. Netia signed a mandate letter with Rabobank Polska, Raiffeisen Bank Polska and BRE Bank for arrangement of new financing for a potential market-consolidating acquisition within the telecommunications sector in Poland. In consequence of the above notice, Netia terminated its existing loan facilities totalling PLN 295 million, provided by Rabobank Polska, Raiffeisen Bank, Bank Millennium, Bank Gospodarki Zywnosciowej since 2007, effective from 5 August. Cancellation of the loan will have no adverse financial consequences for the companies in the Netia group as the company has sufficient cash on hand to fund its current organic growth strategy, including the programme of Ethernet acquisitions, and has taken steps to arrange new financing to pursue potential consolidation opportunities.[Lees verder]

Renesas to target JPY 110 bln in cost reductions
(Telecompaper) Semiconductor maker Renesas Electronics unveiled a major restructuring plan aimed at cutting JPY 110 billion in costs and pushing the company to a 7-10 percent CAGR for chip sales over the period to March 2013. The company targets JPY 40 billion in savings to 2013 from completing integration of the NEC semiconductor activities. Another JPY 70 billion will come from changing its production strategy to rely more on outside foundries. The latter change will lead to impairment charges of JPY 33.1 billion this year on existing prodcution facilities. The restrucing plan will lead to 5,000 job losses at the company, mostly in the current fiscal year to March 2011. In terms of strategy, Renesas plans to focus more on overseas sales, particularly in China, and keep its product portfolio centred on the “advanced information-communications area”, targeting areas such as cloud computing, smart home and smart grid technologies, auto electronics, consumer electronics and the mobile activities acquired from Nokia. The restructuring came alongside fiscal Q1 results showing a net loss of JPY 33.1 billion on sales of JPY 292 billion. For the full year, Renesas raised its sales outlook slightly by JPY 20 billion to JPY 1.19 trillion, amid expected growth in all three of its product divisions thanks to the overall market recovery. Semiconductor sales are forecast up 16 percent year-on-year on a pro forma basis. The group forecast a small operating profit of JPY 7 billion for the year, while the net loss is estimated at JPY 80 billion, including the planned impairment charges.[Lees verder]

HTC poaches CTO, product chief from Sony Ericsson
(Telecompaper) Smartphone maker HTC has named Ron Louks as Chief Strategy Officer. In the new position, Ron Louks will be responsible for driving new strategic initiatives, technology incubation and will work closely with HTC’s engineering and operation departments. Prior to joining HTC, Louks was the CTO at Sony Ericsson. Kouji Kodera has been appointed as chief product officer. As HTC’s newly created chief product officer, Kouji Kodera will be responsible for HTC’s global product portfolio planning and management. Kodera has a track record of building device portfolio strategies. Prior to joining HTC, he worked for Sony Ericsson as its head of products. Previously vice president of product development, David Chen has been promoted to chief engineering officer. Chen, who is one of HTC’s first employees, will continue to drive HTC’s product development and engineering. Under his leadership HTC has created many smartphones. HTC’s chief innovation officer Horace Luke and HTC’s chief marketing officer John Wang will work closely with Kodera and Chen to strengthen HTC’s overall product offerings around the world. Previously VP of HTC North America, Jason Mackenzie has been promoted to president of HTC North America and Latin America. As president, Mackenzie will continue to drive HTC’s strategy and market growth in North America and Latin America, where he has contributed to HTC’s performance. As one of HTC’s founding North American members in 2005, Mackenzie has led HTC’s growth in North America. Previously vice president of HTC EMEA, Florian Seiche has been promoted to president of HTC EMEA. As the founder of HTC’s EMEA operations in 2005, Seiche has grown HTC’s business and brand in EMEA. HTC’s senior executive VP Jason Juang has left the company to pursue other opportunities.[Lees verder]

DST hires banks for IPO in 2011 – report
(Telecompaper) Russian internet company Digital Sky Technologies has hired investment banks to organize an initial public offering in 2011, a person familiar with the plans told the Wall Street Journal. DST chose Goldman Sachs, which has a stake in the company, and two other investment banks for an IPO on a global stock exchange, most likely in London, the paper reports. In the offering, DST investors may sell stakes and the company may also issue new shares. The exact timing and the target market valuation are unknown. DST, which is valued at about USD 4 billion, owns Russian internet portal Mail.ru and is buying the ICQ instant-messaging system. DST’s affiliated international investment vehicle, DST Global, has also invested in Facebook, gaming company Zynga and other internet firms. A spokesman for DST said that “an IPO was always in DST’s strategic agenda” but that “no details or timetable of the possible transaction have been agreed upon.”[Lees verder]

Samsung mobile phone shipments up 22%, prices under pressure
(Telecompaper) Samsung Electronics announced second-quarter revenues of KRW 37.89 trillion, up 17 percent year-on-year. Operating profit rose 88 percent to KRW 5.01 trillion, and net profit improved to KRW 4.28 trillion from KRW 2.33 trillion a year ago. The results were in line with the company’s earlier forecast, with growth driven by a recovery in its components and semiconductors business, helping to offset price pressure in consumer electronics. “With intensified competition throughout the digital media and mobile industries going forward, it may become a challenge to maintain current profitability levels,” said Robert Yi, head of Samsung Electronics’ investor relations “However, we will continue to focus on introducing differentiated products and widening our technology leadership in components to meet these difficult market conditions.” Strong seasonal demand for core components is expected to drive Samsung’s performance in the third quarter, although increased market supply is also forecast. Samsung forecast that continued price competition in its CE businesses will put downward pressure on profit margins in the third quarter. Samsung’s telecom division posted an operating profit of KRW 630 billio in Q2, down from KRW 980 billion a year ago, on revenue down 4 percent to KRW 8.78 trillion. The operating profit margin fell to 7.2 percent from 10.8 in Q2 2009, as competition caused a slight decline in the average handset price and earnings were affected by the fall in the euro. Samsung sold 63.8 million handsets during the second quarter, an increase of 22 percent year-on-year but down slightly from 64.3 million in Q1 due to a slowdown in Europe. The recently launched Galaxy S and Wave handsets made little contribution in the quarter but are expected to help grow H2 sales. Samsung forecast high single digit sequential growth in shipments for the third quarter. Touch-screen mobile handsets made up 30 percent of Samsung’s unit sales during the second quarter, compared with 15 percent a year ago. Samsung said it will also launch a range of mid-end smartphones as part of its strategy to provide mobile devices for every lifestyle.[Lees verder]

Softbank’s Q1 sales boosted by mobile unit
(Telecompaper) Japanese communications provider Softbank saw its first quarter net sales grow over 5 percent while income dropped almost 30 percent. Net sales in the three months to June totalled JPY 700.84 billion, up 5.2 percent from JPY 666.33 billion in the year-ago period, reflecting steady sales at Softbank Mobile. Operating income went up 44.6 percent to JPY 156.60 billion, and ordinary income rose 61 percent to JPY 126.84 billion, driven by earnings growth in the mobile communications segment due to an increase in the number of mobile subscribers and an increase in ARPU. Softbank recorded a net income of JPY 19.44 billion, down 29 percent from JPY 27.38 billion a year earlier, mainly due to an increase in total income taxes. For the full year, Softbank expects operating income of JPY 500 billion, up 7.3 percent year-on-year.[Lees verder]

Docomo unveils LTE brand, corporate vision
(Telecompaper) Japanese mobile operator NTT Docomo has unveiled a new brand and logo for its upcoming LTE services and a new corporate vision. The LTE brand name is written “Xi” and read as “crossy.” Docomo says the The ‘X’ denotes both ‘connection’ and ‘infinite possibility’, and the ‘i’ both ‘individual user’ and ‘innovation’. Docomo’s Xi LTE service, which is scheduled for launch in December, will offer downlinks of up to 75 Mbps. Initially, Xi will be available in the Tokyo, Nagoya and Osaka areas, but coverage eventually will be expanded to other major cities and then additional areas of the nation. Xi users will be seamlessly handed over to the Foma network whenever they leave a Xi service area. Xi handsets, billing plans and other details will be announced later. The new corporate vision has been dubbed “Pursuing Smart Innovation: HEART” and seeks to achieve new growth by delivering new value to customers. For the past 10 years, the operator implemented its Vision 2010 corporate vision to create a new communications culture by delivering diverse services and enhanced value to customers and society. Under its new vision Docomo intends to use its innovation efforts to align its continued growth with the challenges and opportunities of the next 10 years, including accelerating globalisation, environmental protection, and the increasing spread of broadband. The company expects to partner with a broad range of companies to drive innovation.[Lees verder]

Telecom NZ sells part of AAPT, stake in Macquarie Telecom
(Telecompaper) Telecom New Zealand will sell the consumer division of Australian unit AAPT to Australian ISP iiNet for AUD 60 million. The transaction is subject to iiNet shareholder and customary regulatory approvals. Telecom currently estimates the transaction will have a net negative impact on AAPT’s FY 2011 EBITDA of around AUD 10 million. Telecom also announced that is has sold its 18.2 percent stake in iiNet to institutional and sophisticated investors for approximately AUD 70 million. The carrying value of this investment was AUD 81 million at 30 June. Furthermore, the company sold its stake in Australian business communications services provider Macquarie Telecom for AUD 9.9 million. The carrying value of this investment was AUD 9.5 million at 30 June. When combined, the proceeds from the sale of Telecom’s 10.1 percent stake in Macquarie Telecom, the sale of AAPT’s consumer division and sale of the 18.2 percent stake iiNet will generate approximately AUD 140 million of sale proceeds for Telecom. AAPT will now focus all its effort on leveraging its tier 1 network infrastructure to deliver voice, data and internet solutions to the wholesale and business market. With the sale, iiNet will gain around 113,000 broadband subscribers and over 251,000 other active services to bring iiNet’s broadband subscribers to more than 652,000 and total active services to more than 1.33 million.[Lees verder]

Best Buy to use Clearwire network for Connect service
(Telecompaper) US retailer Best Buy has agreed to resell Clearwire’s Wimax service as part of its recently launched Best Buy Connect mobile internet service. Best Buy will launch the service based on a wholesale deal with Clearwire in 2011. This is Clearwire’s first wholesale agreement beyond those with its shareholders – Sprint, Bright House, Time Warner Cable and Comcast already sell the Wimax service under their own names. The Best Buy Connect service currently uses the Sprint mobile network. Best Buy said the deal will help it develop a ‘one-stop shop’ for mobile phones, accesories and services.[Lees verder]

India amends licences for network equipment security checks
(Telecompaper) The Indian government has issued changes to telecom operator licences requiring them to address security concenrs among their foreign network equipment suppliers. According to a report from the Economic Times, the government can impose penalties of up to 100 percent of the contract value if any spyware or malware is found in their imported equipment. International manufacturers who want to do business in India will have to deposit source codes and detailed designs of all products and services they sell in an escrow account in encrypted form. This can be accessed by security agencies and operators in case of an emergency. The new rules will be incorporated into the licence agreements of all telecommunication companies with immediate effect. The new norms published by the department of telecom were issued after security agencies and the home ministry raised concerns about imported equipment, especially those sourced from Chinese companies. They also equipment makers who maintain and manage mobile networks in India to employ only Indian engineers; they will have two years to comply with this. Vendors who maintain networks also will be subject to the country’s data protection laws. This implies that they can be prosecuted in India if they are found to have leaked any information or for any security breach. The government has also asked all mobile operators to submit their organisational policy on security and security management of their networks within 30 days. Mobile operators will have to get security clearance from the home ministry and third-party audits on core equipment before they can be imported. DoT also said that it was working towards setting up the Telecom Security Council of India to help increase security assurance levels. The council would be jointly funded by the government and the telecommunication industry. The new rules will also allow the centre to lift the temporary ban on 26 companies, including Chinese OEMs such as Lenovo, Huawei Technologies, ZTE, Sunsea Telecom, UTStarcom, Tongyu Communications, Wuhan Fibrehome International, Shenzhen Grentech, Maipu Communications and Israel-based Comverse from supplying mobile gear in India. Telecommunications equipment can now be imported from these companies after audits by internationally certified network security firms.[Lees verder]

Netia arranges new financing for potential acquisitions
(Telecompaper) Polish operator Netia signed a mandate letter with Rabobank Polska, Raiffeisen Bank Polska and BRE Bank regarding new financing for potential acquisitions and terminated the existing credit facility with Rabobank Polska, the lead arranger of the loan. Netia signed a mandate letter with Rabobank Polska, Raiffeisen Bank Polska and BRE Bank for arrangement of new financing for a potential market-consolidating acquisition within the telecommunications sector in Poland. In consequence of the above notice, Netia terminated its existing loan facilities totalling PLN 295 million, provided by Rabobank Polska, Raiffeisen Bank, Bank Millennium, Bank Gospodarki Zywnosciowej since 2007, effective from 5 August. Cancellation of the loan will have no adverse financial consequences for the companies in the Netia group as the company has sufficient cash on hand to fund its current organic growth strategy, including the programme of Ethernet acquisitions, and has taken steps to arrange new financing to pursue potential consolidation opportunities.[Lees verder]

Renesas to target JPY 110 bln in cost reductions
(Telecompaper) Semiconductor maker Renesas Electronics unveiled a major restructuring plan aimed at cutting JPY 110 billion in costs and pushing the company to a 7-10 percent CAGR for chip sales over the period to March 2013. The company targets JPY 40 billion in savings to 2013 from completing integration of the NEC semiconductor activities. Another JPY 70 billion will come from changing its production strategy to rely more on outside foundries. The latter change will lead to impairment charges of JPY 33.1 billion this year on existing prodcution facilities. The restrucing plan will lead to 5,000 job losses at the company, mostly in the current fiscal year to March 2011. In terms of strategy, Renesas plans to focus more on overseas sales, particularly in China, and keep its product portfolio centred on the “advanced information-communications area”, targeting areas such as cloud computing, smart home and smart grid technologies, auto electronics, consumer electronics and the mobile activities acquired from Nokia. The restructuring came alongside fiscal Q1 results showing a net loss of JPY 33.1 billion on sales of JPY 292 billion. For the full year, Renesas raised its sales outlook slightly by JPY 20 billion to JPY 1.19 trillion, amid expected growth in all three of its product divisions thanks to the overall market recovery. Semiconductor sales are forecast up 16 percent year-on-year on a pro forma basis. The group forecast a small operating profit of JPY 7 billion for the year, while the net loss is estimated at JPY 80 billion, including the planned impairment charges.[Lees verder]

HTC poaches CTO, product chief from Sony Ericsson
(Telecompaper) Smartphone maker HTC has named Ron Louks as Chief Strategy Officer. In the new position, Ron Louks will be responsible for driving new strategic initiatives, technology incubation and will work closely with HTC’s engineering and operation departments. Prior to joining HTC, Louks was the CTO at Sony Ericsson. Kouji Kodera has been appointed as chief product officer. As HTC’s newly created chief product officer, Kouji Kodera will be responsible for HTC’s global product portfolio planning and management. Kodera has a track record of building device portfolio strategies. Prior to joining HTC, he worked for Sony Ericsson as its head of products. Previously vice president of product development, David Chen has been promoted to chief engineering officer. Chen, who is one of HTC’s first employees, will continue to drive HTC’s product development and engineering. Under his leadership HTC has created many smartphones. HTC’s chief innovation officer Horace Luke and HTC’s chief marketing officer John Wang will work closely with Kodera and Chen to strengthen HTC’s overall product offerings around the world. Previously VP of HTC North America, Jason Mackenzie has been promoted to president of HTC North America and Latin America. As president, Mackenzie will continue to drive HTC’s strategy and market growth in North America and Latin America, where he has contributed to HTC’s performance. As one of HTC’s founding North American members in 2005, Mackenzie has led HTC’s growth in North America. Previously vice president of HTC EMEA, Florian Seiche has been promoted to president of HTC EMEA. As the founder of HTC’s EMEA operations in 2005, Seiche has grown HTC’s business and brand in EMEA. HTC’s senior executive VP Jason Juang has left the company to pursue other opportunities.[Lees verder]

DST hires banks for IPO in 2011 – report
(Telecompaper) Russian internet company Digital Sky Technologies has hired investment banks to organize an initial public offering in 2011, a person familiar with the plans told the Wall Street Journal. DST chose Goldman Sachs, which has a stake in the company, and two other investment banks for an IPO on a global stock exchange, most likely in London, the paper reports. In the offering, DST investors may sell stakes and the company may also issue new shares. The exact timing and the target market valuation are unknown. DST, which is valued at about USD 4 billion, owns Russian internet portal Mail.ru and is buying the ICQ instant-messaging system. DST’s affiliated international investment vehicle, DST Global, has also invested in Facebook, gaming company Zynga and other internet firms. A spokesman for DST said that “an IPO was always in DST’s strategic agenda” but that “no details or timetable of the possible transaction have been agreed upon.”[Lees verder]

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