Why is Europe always at the Forefront of Technology Price Fixing and Antitrust actions

19 May, 2010
Technology,World Economy and Markets

For some time I have noticed that European Union has been coming down very strong on anti trust actions and price fixing against technology companies . These fines  usually consist of a large monetary fine plus some provisions to prevent such actions in the future.However US and Asia have not been involved in such big actions.

The main reason I suspect behind the European Action is that Technology Companies mainly tend to be non-European without any big domestic lobbies to fight for them.They earn large amount of revenues and profits from the European continent with most of these profits being repatriated to their home countries.Big Technology companies are almost absent from Europe and can be counted in fingers.Nokia,ST Microelectronics , Infineon,SAP which are some of the large European Technology Companies  have either declined to a shadow of their former selves or in the process of doing so. US leads in innovation and research while Asia is a leader in manufacturing prowess.Even in the emerging Green Industry , Europe is losing hands down to others.Though this might be a controversial statement and is speculative , I think Europe is  extracting  a Levy or a Tax from the earnings of these Foreign Technology Companies through their price-fixing and anti-trust actions.Here is a list of some of the big regulatory actions against non-European Technology companies

  1. Europe fines Memory Makers 331 million Euros
  2. Europe fines Intel 1 Billion Euros
  3. Europe vs IBM
  4. Europe vs Google
  5. Europe fines Microsoft 1.3 Billion Dollars

Nokia continues to lose marketshare in the Indian mobile market as Local Companies gain traction

16 May, 2010
Technology,Telecommunications

Nokia is  already losing the smartphone wars to Apple and Google in the developed markets.So the low end segment is where it is relatively insulated from competition from these technology giants.However local players in the Indian market are nipping at its heels even in this segment. It like a pack of dogs bringing  down a bigger prey . Nokia is trying to retain its dominant  share by introducing lower price feature rich phones but seems to me that is a losing strategy.With lower prices , Nokia hurts itself the most as it has much more volumes to lose margin dollars on. Would be interesting to see how much marketshare Nokia eventually loses as India is one of the most important markets for this company.It is already down to 60% marketshare according to the following article  from the 70%  it had in 2008.

New handset players in fray: Ringing in a desi tune – Economic Times

Nokia’s launch of a sub-Rs 6,000 full qwerty phone last month had a ring of insecurity around it. It was responding to the threat posed by the large number of Indian handset brands which have emerged over the past two years to take the market by storm. At last count, the number of new players stood at over 50.

These new players like Karbonn, Micromax, Zen, Lava, Maxx and others have been stealing market share for quite sometime now with full-featured offerings at astonishing lower price points. Consequently, Nokia’s market share has dipped from 70% in 2008 to under 60% now.

How Information Technology is Helping the World’s Extremely Poor Populations

14 May, 2010
Technology

The use of Technology has immense benefits for the world’s poor in improving governance and accountability and reducing of corruption.It has been under utilized so far though you do find instances of Information Technology aiding the world’s most poor populations.Mobile Technology coupled with Computing Power is particularly effective in helping fight corruption and improving efficiency.Some instances where information technology has been used is

  1. For Money Transfers   and Mobile Banking – Most of the poor do not have access to financial intermediaries and banks , but now they can use their cheap mobiles to access banking and  making money transfers through SMSes
  2. Accessing Weather and Commodity Information – For a lot of far off farming communities with little access to information, information technology through the use of restricted mobile/Internet devices has helped a lot in getting information about weater and farm prices
  3. Accessing Computerized Land Records – Lots of the places in India don’t have proper documentation on property rights.Information Technology is being used in some parts to alleviate this problem
  4. Call Centres in Extremely Poor Areas – Outsourcing companies are building call centres in far off hinterland areas in order to decrease their costs and provide help to underprivileged people at the same time.

This new technique of finding out fake medicines is  another good use of  IT in helping fight the fake medicine which are endemic to some off parts of the underdeveloped world.

Scratch & Win War Is Waged on Africa’s Fake Malaria Medicines – Bloomberg

At 12:30 p.m. on May 6, Ampem Dankwah sends a cell-phone message from the lobby of a downtown cafe in Accra, Ghana: “GH4F9H84B4.” His text opens a front in the war on sham malaria drugs.

Within 1.2 seconds, Dankwah’s transmission is routed to a Hewlett-Packard Co. data center in Galway, Ireland, where a computer verifies the code and responds, “OK.” It is the first test of a system developed by HP and Dankwah’s employer, mPedigree Network Ltd., to help millions of Africans avoid counterfeit malaria pills with little or no active medicine, Bloomberg Businessweek reports in its May 17 issue.

Under the plan, legitimate drugs will come with a scratch- off panel hiding 10 digits. Consumers will send the code to a widely advertised number, and receive a reply confirming or disputing the product’s authenticity. The system is designed to detect fakes that in some African nations make up half the drugs sold for malaria, a mosquito-borne disease that is the single greatest killer of African children, according to the William J. Clinton Foundation in New York.

“A big advantage of it is that it empowers the consumer,” said Paul Newton, a Vientiane, Laos-based researcher from the U.K.’s University of Oxford who studies counterfeit drugs. Pharmaceutical makers may welcome the development “because it would increase public confidence in medicines,” Newton said in a telephone interview.

HP plans to sign a contract with mPedigree within the next month, said Mick Keyes, a senior official in HP’s chief technology office. The two companies intend to introduce the system with malaria pills in Ghana and Nigeria by December, and may expand later to Kenya, Tanzania, Liberia, Benin and Uganda.

Technology Wars – Nokia reshuffles its Management and Divisions once again to turn the Tide of the Smartphone War

11 May, 2010
Technology

Nokia has been losing the smartphone wars to RIMM,Apple and Google . Despite having a long history,R&D and supply chain in the mobile handset market,it has lost the initiative to these  technology behemoths.With a pleothera of new entrants lining up new devices , Nokia chances of regaining its dominant position and reversing its marketshare losing trend is very close to zero.After reporting a horrendous first quarter results,Nokia is trying a different tack.It is shuffling the managment  once again and creating a new “smartphone” division to bring new ideas into its staid mobile division.Despite plenty of resources , Nokia has been way behind the product curve in the smartphone market.Though it shows the company has realized its precarious position in the technology space,I don’t think it will take a massive effort to turnaround.Not to say that it has not been done before . IBM , Kodak and plenty of other companies managed to turn themselves around and are quite successful.

Nokia Names New Smartphone Executive to Fend Off Apple, Research In Motion – Bloomberg

Nokia Oyj, the world’s biggest maker of mobile phones, promoted a 20-year company veteran to head a new smartphone division as it tries to stem customer losses to Apple Inc. and Research In Motion Ltd.

Anssi Vanjoki, who has been with Nokia since 1991 and currently runs the marketing unit, will be the new smartphones chief, the Espoo, Finland-based company said in a statement today. Mary McDowell, who heads corporate development, will take over as the head of low-end mobile phones, replacing Rick Simonson, who will leave company.

Chief Executive Officer Olli-Pekka Kallasvuo’s changes today mark the third time in nine months the company has reshuffled executives and operations as Nokia loses ground to Apple’s iPhone and RIM’s BlackBerry. He announced a “solutions unit” to speed cooperation in August, and shifted Simonson from finance chief to low-end phones in October.

“This continuous set of reorganizations gives just one message to investors — that Nokia is really unaware of what they should be doing,” said Jari Honko, a Helsinki-based Swedbank analyst with a “reduce” rating on Nokia shares. “The catchup game is still going on.”

Nokia fell 10 cents, or 1.1 percent, to 8.70 euros. The shares have dropped 2.5 percent this year, valuing the company at 32.6 billion euros ($41.5 billion).

‘Negative Reaction’

“The negative market reaction is probably due to Rick Simonson leaving,” said Sami Sarkamies, a Helsinki-based analyst at Nordea Bank who has a “strong buy” rating on Nokia. “He was well appreciated by investors as former CFO and hadn’t been that long in his current position.”

Kai Oistamo will leave as devices chief and replace McDowell as the head of corporate development. McDowell and Vanjoki will report directly to Kallasvuo in their new positions. Simonson, who has headed low-end mobile phones in the seven months since stepping down as chief financial officer, will exit the company at the end of the year, Nokia said.

Three years after Apple introduced the iPhone, Nokia is still struggling to develop a handset with the same mass appeal. Nokia reported first-quarter earnings on April 22 that missed analysts’ estimates and cut its margin target, sending the stock down 14 percent.

Smartphone prices declined to 155 euros in the first quarter from 190 euros in the third as new lower-priced models outsold the outdated high-end portfolio, the company said.

The Rise and Rise of Technology Behemoths – Google to sell digital books

4 May, 2010
Technology

Apple,Google,Microsoft and Amazon which earlier used to compete in separate technology segments are now competing head to head with each other in Smartphones,Digital Ebooks,SAAS,Music Players etc. You can see the technology consolidation around these 5-10 major technology behemoths which are now straddling large parts of the the technology spectrum. Cisco , HP and IBM are competing in the networking ,server and storage markets while the four mentioned above are colliding head to head in the consumer technology space.It will be interesting to see them compete and collaborate (Yahoo and MSFT) with each other. We might ultimately see only 10 big companies with smaller ones like Juniper,Yahoo,RIMM and others get absorbed by these technology giants. With their huge cash warchests and large free cash flows you should see an increasing amount of M&A in technology

Google to sell digital books in June or July: WSJ

Google I said it will start selling digital books in late June or July, heralding a three-way battle with Amazon and Apple , The Wall Street Journal reported Tuesday in its online edition. The plan was announced at a conference hosted by the Book Industry Study Group in New York, the newspaper said. Google hopes to distinguish itself from competitors by allowing users to access books from a wider range of sites using multiple devices, according to the Journal

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