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B&E This Fortnight
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B&E This Fortnight

Issue Date - 23/06/2011

Riding with Germans
While rivals Hewlett-Packard and Dell made headlines in the acquisitions market last year, the Chinese computer giant Lenovo is making some big ticket bids of its own this year. Four months earlier Lenovo signed a strategically positioned JV with NEC Corp to sell laptops in Japan. The company is now all set to buy Germany’s Medion AG in a deal that values the consumer electronics company at $671 million. The deal is expected to double the market share to more than 14% of the PC market in Germany, which is Europe’s biggest economy today and give the combined company a share of around 7.5% in the western European PC market. Hewlett-Packard accounted for 17.6% of the global PC market last quarter, declining from 18% a year earlier, Taipei-based Acer dropped to 12.9% from 14.6% and Lenovo, the fourth largest, increased its share to 9.7% from 8.2%. In the past year, HP made over $7 billion in acquisitions and for its part, Dell bought IT consulting firm Perot Systems for $3.9 billion in 2009, and more recently, Boomi, a cloud computing integration service, for an undisclosed sum. Lenovo shares fell by 3% on the announcement amidst concerns of investing in a slow growing market like Germany. In addition competitors like Dell and HP are moving into the high margin consulting business, while Lenovo is still stuck in hardware.

Ford’s Smallest
Automobile companies are bracing themselves for the rising costs of transportation. Ford Motors, the world’s No. 4 auto maker is developing its smallest engine ever to squeeze out greater fuel savings. The new EcoBoost, a three cylindrical engine, is designed to have a higher fuel economy without sacrificing power & performance. The engine should be available in 90% of Ford’s vehicles in North America by 2013. The company’s profits of $6.6 billion in 2010 have indicated a long awaited rebound as Ford lost $14.6 billion in 2008.

Pandora raises IPO
The music streaming superstar Pandora has dominated the headlines with its announcement of a public offering, which would help them to raise $142 million; announcing a target price range of $7 to $9 per share price. Pandora, which tops the list in terms of music experiences, has recorded a revenue of $43 million during the first quarter by averaging a new user every second with a list of 90 million registered users. Pandora expects to raise $96 million to $142 million.

NokIa Shares Slump
This is what is called a double blow. Ever since mobile handset maker Nokia issued warnings against the slump that they expect to face in their current quarterly sales, the shares of the Finnish giant also witnessed a major downfall at NYSE by more than 14%. The company also raised a concern over the change in the preferences (towards ultra low cost handsets) in their major markets of China and Europe. By partnering with Microsoft in designing Windows Nokia Mobile, they hope to resolve their outstanding Symbian problems. Though specific sales figures were not disclosed, but the company has indicated that its target of $9 billion seems unachievable in the current quarter.

Windows 8 Coming
Windows 8, an updated version of Windows 7, will officially launch in 2012. With the updated user interface, CEO Steve Ballmer expects to be tapping all touch inerfaces, confirming to company policies of riding the new wave of technology. But he is still hopeful of selling 350 million copies of Windows 7 before its prospects in the tablet computing market take off. Meanwhile, Apple has announced its Mac OS Lion in competition, and another internecine battle is on its way.


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