22 Aug 2013
HP's financial results posted today do not paint a particularly pretty picture for the IT firm; the company has many fingers in lots of pies, but most of those pies are causing minor burns.
Personal computing was down 11 percent year-on-year, while printing also fell by four percent. Its enterprise division didn't just lose 9 percent of its revenue, but also lost its chief, as David Donatelli was shifted into another role within the company. The only ray of sunshine for HP was its software division, but even that only managed a one percent increase in revenue.
So where does HP go from here? Right now, analysts are unsure, with the company not giving clear pointers as to where its focus lies. What's worse, the places in which HP is losing revenue are all totally different aspects to its business, so it can't blame one particular part of the market.
The personal computing business is of course suffering much of the decline coming from the consumer side of things, according to Ovum analyst Tom Reuner, with consumers still unwilling to upgrade their laptops as often as they used to. The firm had previously toyed with the idea of selling off its personal computing arm, but Reuner isn't so sure that would go down well with investors. "It's such a large chunk you need something to replace it because top line is still important for investors." Indeed, personal computing is HP's biggest money spinner after its enterprise business, worth $7.7bn in the last quarter.
HP was also rumoured to be looking at making a play for the smartphone market but, again, with the market so utterly saturated by a combination of Samsung, Android and Apple, it would be a hard slog that probably wouldn't amount to much. "It's such a commoditised space, when you look at PCs and smartphones as a lever for other products and services but from a smartphone point of view it's more difficult to see where the turnaround could come from," explained Reuner.
So with enterprise still the biggest earner for the company but also appearing to be in significant decline, it only makes sense to oust the current head and look elsewhere. David Donatelli's replacement is Bill Veghte, previously the firm's chief operating officer. Veghte has strong experience in the competitive and burgeoning cloud business, and HP hopes that he will be able to better unite cloud and enterprise services.
It hasn't been all bad for HP, which secured a $3.5bn US Navy contract last month but, again, these huge deals don't always result in big profits. "But it is a promising promising sign that HP is able to be selected for major projects again," said Reuner
Meg Whitman has now been CEO for two years, a long period of stability for the firm, but she will need to find focus soon if HP is to continue on the road to recovery.
Written by V3's Michael Passingham, who prefers ketchup
It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a WiFi connection. So starts Pride and Prejudice (Are you sure? – Ed), the most famous work by Jane Austen, who will appear on the new £10 notes from 2017, replacing Charles Darwin.
This is to ensure that there will be a woman represented on UK banknotes, after the decision to replace Elizabeth Fry on £5 notes with Winston Churchill was agreed by the Bank of England.
But while Austen is a worthy choice, it does mean Alan Turing’s chance of financial fame has gone.
V3 has reported in the past how the famed codebreaker and genius of World War Two, who helped the Allies win the war, was a candidate for the new £10, with a petition issued by programmer Thomas Thurman racking up huge numbers of signatures – over 27,087 to be precise.
“Alan Turing is a national hero. His contribution to computer science, and hence to the life of the nation and the world, is incalculable. The ripple effect of his theories on modern life continues to grow, and may never stop,” Thurman wrote in the introduction to the petition.
Sadly, it appears these efforts were in vain, but it was still refreshing to see at the time that so many people wanted to celebrate Turing in this way.
“Most importantly, it got the country talking: people are debating the work of Turing and discussing his legacy, and as long as that continues, he cannot be forgotten,” Thurman told V3 in March.
However, some good news for the Turing brigade has come from the Bank of England's announcement: it will be reviewing the decision-making process for selecting future historical figures, as outlined by governor Mark Carney.
"We believe that our notes should celebrate the full diversity of great British historical figures and their contributions in a wide range of fields. The Bank is committed to that objective, and we want people to have confidence in our commitment to diversity," he said.
Still, if Turing has been denied his chance of wider fame and recognition, the government could at least do the decent thing and quash his historical conviction for homosexuality. Earlier this week Lords called on the government – once again – to overturn the ruling he received after the war he helped them win.
By V3's Dan Worth, who loves a fistful of £10 notes
24 Jul 2013
For more than a year and a half, we have been hearing about the declining PC market. It began with analysts warning of slow sales from component makers and forecasts that sales would fall short of expectations.
Before long, the PC vendors themselves were confirming the predictions, warning that their revenues would in fact be taking a hit as consumers migrated towards the sleeker, cheaper allure of the tablet. By the end of the year, the PC market saw its first overall decline in over a decade as sales fell from the previous year.
Apple, however, had largely defied that trend. The company was able to pick up market share with its line of Mac desktops and notebooks as the PC vendors saw losses mount.
Now, however, it appears that the trend has even caught up with Apple. Over the last quarter the company reported that the Mac line saw a decline from the previous year's quarter. While the decline was still slight, it was the first time Apple has had to acknowledge that it too is seeing its own desktop and notebook brand suffer from the tablet surge.
Of course, Apple is in a much better position than the likes of Dell, HP and many other Windows PC vendors. The company owns one of the chief culprits for the PC market's decline, the fantastically successful iPad. The tablet is not only helping to cut into PC sales, but it also brings in a tidy profit for Apple due to the firm's generous retail markup.
Furthermore, Apple's decline is hardly comparable to what many PC vendors have been hit with since early 2012. The company noted that while it lost some sales, the PC market has seen an even bigger drop over the same time period, suggesting that Apple actually managed to pick up market share due to attrition.
Still, the numbers remain significant in what they say about the market. Tablets are winning, PCs are losing, and not even Apple is immune to a trend that looks as if it will shape the way we look at both the consumer and enterprise IT markets in the coming years.
Dell shareholders are nearing the vote on the company's proposed buyout plan, and opponent Carl Icahn is upping his offer hoping to halt a deal at the last minute.
The investor activist said he would up his bid to acquire outstanding shares in the company with the addition of warrants, which could increase the per-share price stakeholders would collect in the sale and offer them the chance to re-purchase their shares at a later date.
The bid comes in the wake of announcements from Dell that three outside appraisal firms brought in to review the offers have accepted the company's original plan. That offer, backed by founder Michael Dell and an investment group, would purchase all outstanding Dell shares and effectively take the company private.
Icahn has long opposed the bid, claiming that the company's $13.65 per-share offer undervalues the company and rips off shareholders. He has since formed his own group, but the viability of the offer has been called into question by the company's special committee.
Now, as the vote nears, the company is trying to quell talk of an Icahn buyout once and for all. Additionally, it has spoken out against a call from Icahn to have Dell stock appraised.
“The Special Committee cautions Dell stockholders that Carl Icahn’s latest entreaties that they pursue appraisal with respect to the Dell acquisition misrepresent the risks and costs involved in this course of action,” the company said in a statement.
“Mr Icahn’s letters claim that seeking appraisal is a 'no-brainer' involving 'no risk' and that stockholders 'might get lucky' if they follow his advice.”
While we enjoy a lovely, balmy summer (Is this right? – Ed) it's easy to forget that, as they say in Game of Thrones, Winter is Coming.
Ah, the crackle of a crisp winter’s night, eating hearty food, sitting in front of the telly without feeling guilty, running up astronomical heating bills…it’s part and parcel of the Great British Winter.
Of course, most people would rather do away with the huge bills we have to fork out to keep ourselves warm, especially when we’re often wasting energy on heating when we’re not even in, or it’s coming on too early or going off too late.
While this may be good news for the energy companies in theory, they’re actually making moves to simplify and improve our use of their services, both through smart metering technology, but also apps that allow us to run our heating more efficiently.
One such intiative that’s growing in size and awareness is the British Gas Connected Homes project run (obviously) by British Gas, which is centred around a mobile application called Remote Heating Control (RHC) that works on Android and iOS devices.
The app allows you to both control the timer for the heating in your home, and simply turn your heating on and off, from any location, so can ensure you’re not wasting money by pumping out heat when you’re not at home, or don’t really need it on.
Speaking with Kassir Hussain, the technology director of the British Gas Connected Homes project, it’s clear the firm is keen to end the issues seen by its customers around heating management, and it sees mobile technology as a key to this conundrum.
“How many times do you really look at your boiler interface? Most people just set it once and leave it and it’s the last thing on their mind to keep changing it, as they’re rushing around in and out of the house,” said Hussain.
“About £142 is wasted per year this way, and that’s a huge sum of money, so the RHC app should help reduce this: it doesn’t require any training and is easy to use, like most mobile apps.”
Installing the necessary kit on your boiler isn't cheap - a fully qualified engineer installation and the kit costs £229, although existing British Gas customers get a £30 discount. As this implies, the service is open to all homes, not just those with British Gas. The apps are free, though.
So far the firm has got about 20,000 units into people’s homes, but is hoping to increase this in the coming months and years by making people more aware of the capabilities on offer.
“We actually find people use it more when they’re just at home to adjust the temperature, whether in bed or in the living room, and this helps them better manage what they’re using. For some people the boiler is in an awkward place, under the stairs or in a cupboard, and they just can’t be bothered to alter it,” added Hussain.
While the idea of controlling your heating from your phone or tablet is a bit far out for most people, it’s clear British Gas is determined that it can revolutionse this, and Hussain makes a valid point as to the future of the project.
“In the future we’ll wonder how we did without connected home technologies, just like we can’t imagine the world without lightbulbs now. We need to get out there and make people understand why this technology is so important to them.”
Come the winter, perhaps there will be a few more home owners able to use technology to save themselves a few pounds, while they curl up on the sofa with a plate of sausage and mash and the Game of Thrones boxset on the TV.
In the online world, natural disasters can bring out the worst in people. Whether it's troll comments, scam campaigns or bogus fundraisers, major storms and events often bring no shortage of bad news to report.
But they also bring about some remarkable stories of communities banding together and looking to help those on the other side of the world. One such story has arisen in the aftermath of the deadly Oklahoma tornadoes as one families courage to stand up for their convictions has united thousands of people around the globe.
Rebecca Vitsmun was one of countless people in the Oklahoma City area to see her family's home ravaged by the tornado. Grateful to be alive along with her young child, Vitsmun recounted her story to CNN reporter Wolf Blitzer.
Towards the end of the report, Vitsmun was prodded by the reporter as to whether she “thanked the Lord” for her survival. The woman was quick, but gracious to note that she was an atheist, leaving Blitzer somewhat dumfounded and caught off guard.
While Atheism is gaining acceptance in much of the western world, in the extremely religious Bible Belt region of the south, where Vitsmun lives, such views can be few and far between. That the mother would assert her stance at such an emotional and vulnerable moment touched home with many atheists around the globe.
In response, they kicked off a fundraising campaign to help recoup the family's losses and get them into a new or rebuilt home. Backers include comedian Doug Stanhope, who jokingly offered to send atheist “prayers” on behalf of donors.
The result has been nothing short of stunning. As of the end of the week, a campaign that had orignially set its target at $50,000, had raised more than $100,000 with more than 50 days remaining in the donation window.
In such a time of devastation, it is great to see communities of all religions, beliefs and convictions band together to help those in need.
Feature phones died in the developed world years ago. With telecoms offering smartphones for free on contract, nobody was really buying a smartphone in places like the US and UK.
However, smartphones were not as common in developing nations until recently. In places like China and Brazil feature phones still served a slice of the handset market. In fact, until 2013 feature phones still outsold smartphones globally.
That changed in Q1 of this year. According to the IDC, smartphones outsold feature phones for the first time ever last quarter. The report is another reminder that the world has moved passed just phone calls and the developing world is now a lucrative market.
In some developing countries, smartphones are many people's primary internet access point. The ease of a 3G network connection in your pocket makes it possible for millions of new users to have access to the web.
While in developed countries phone calls are not even the primary use of smartphones. With text and data, the need for mobile voice communication has decreased.
Now with the growth of smartphone use those numbers should continue to rise. Smartphones have continued to become cheaper and cheaper. Gone are the days of only expensive smartphones.
Today, a person can get a clever handset for free on contract or close to it off. The market has moved to build a paradagim full of low, mid, and high range smartphones. With the new paradagim, feature phones have become phased out.
The market for cheap smartphones in the developing world is now a huge industry. It's why Samsung leads the world in sales. It's also the reason why Apple keep's hearing rumors of a lower priced iPhone.
Apple is not in the cheap device industry. The firm lives off of big margins and high quality electronics. That somewhat changed with the release of the iPad Mini. The cheaper tiny iPad was the firm's first mobile foray into cheaper end devices.
It seems likely that Apple will have to continue to push its margins lower. Apple won't do it because they want to, they'll do it because they have to. The smartphone game is changing and the developing world is the new frontier.
The smartphone arena is just as much about software as hardware. Apple makes money from ads and apps featured on iOS. With more users on an iPhone, Apple stands to gain more money through software.
Google has always been about getting Android in as many paws as possible. Now, Apple has a chance to do something similar. If the firm builds its user base in the developing world it can get more people onboard with iOS.
With more users on-board it can gain in software what it might lose in hardware margin profits. The world is changing and Apple's current strategy just doesn't fit with it. Apple will have to offer a larger smartphone portfolio if it wants to keep its crown as a leader in the smartphone world.
Google had a pretty good quarter. The search giant saw decent revenue and continued success with its core products. Yet, investors still want more.
During the company's conference call with investors, many Google stock owners questioned the firm's significant investment in future technologies. Investors wondered why Google dollars were going towards things like self-driving cars and virtual reality glasses.
Analysts didn't understand why Google was putting money into products that only have the potential to make profit down the road, grilling company bosses on how they decide appropriate levels of investment for the blue-sky projects.
Google chief executive Larry Page reported that those types of projects are necessary for its future success. He said his responsibility as chief of Google was to make sure that the firm didn't get lazy and invest in only incremental upgrades.
But at Google they're making sure they don't get blindsided by the future. Page and co-founder Sergey Brin have always been looking to find the cutting edge of technology. From cloud computing to Google Fiber, the search giant has always made crazy bets on crazier technology.
That's why it must be so frustrating for Page to hear investors wonder why Google spends so much money on currently unprofitable technology. Google has made a lot of people a ton of cash. Yet, some still wonder if the powers that be know what they are doing.
It's smart to ask questions, but Page and company clearly have a plan that's been working. Most of the time, you'd complain if a company decided to rest on their laurels. But investors are worried about Google taking measured risks.
Investors absolutely have a right to question what Google is doing. Even the company's supporters must be starting to question its Motorola purchase. However, investors should be more trusting of Google in one category: R&D.
Google knows how to make things and even if those things won't always make money right away they are still good products.
So, maybe, the time has come for Google investors to have a little bit of faith. Googlers know what it takes to make money in the internet age and by investing in the future they'll make sure they make money on whatever comes next.