Sony Corp. posted an unexpected quarterly loss on Wednesday, demonstrating the depth of the problems facing its electronics business and deflating a sense of optimism that was reflected in a recent share-price rally.
While Sony said recent restructuring measures undertaken by Chief Executive Kazuo Hirai are starting to pay off, the company’s eighth-straight quarter in the red highlights the shifting landscape of consumer electronics, as smartphones encroach on traditional gadgets. It also heightens the importance for Sony to crack the smartphone duopoly of Samsung Electronics Co. and Apple Inc.
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Apple Inc. (AAPL) plans an overhaul of iTunes that would mark one of the largest changes to the world’s biggest music store since its 2003 debut, according to people with direct knowledge of the matter.
Apple will unveil the changes by year’s end, said the people, who asked not to be identified because the plans aren’t public. The company will more closely integrate its iCloud file- storage service with iTunes so users can more seamlessly access and manage their music, videos and downloaded software apps across different Apple gadgets, the people said. Apple also plans new features for sharing music, the people said.
ITunes has been critical to Apple’s success over the past nine years, generating revenue of almost $1.9 billion last quarter alone as well as tethering users to a widening family of Apple products. Any changes will have implications for the media industry, because the store is the gateway for millions of iPhone, iPad, iPod and Mac users to buy music, movies and television shows.
Tom Neumayr, a spokesman for Cupertino, California-based Apple, declined to comment.
Apple’s iTunes Store has more than 28 million songs and 45,000 movies. It also houses the App Store, which offers more than 650,000 applications that can be downloaded for the iPhone, iPad and iPod Touch devices.
With an increasing amount of content available on the store, the overhaul is intended to improve how people to share songs, a popular feature of Spotify Ltd.’s music-subscription service. Apple has been negotiating with major record labels for rights that would let a user listen to a song sent to them from a friend for free, one person said.
Apple also has announced tighter integration of social networks Facebook Inc. and Twitter Inc. in iTunes, allowing people to share what they are listening to.
Apple co-founder Steve Jobs, who died in October, often spoke about making Apple the “digital hub” in people’s lives. ITunes has been the critical product to fill that role, starting with music sales and expanding to movies and TV shows.
Customers also use the software to activate and update iPhones, iPads and iPods, as well as to synchronize their libraries of music, videos, photos and applications. Yet as more content is being stored on people’s mobile devices, organizing all that material has become increasingly difficult. The further integration of the iCloud Internet-based storage service is aimed at fixing some of those problems, according to the people familiar with the changes.
Apple is creating separate applications for features that had been included within iTunes. Podcasts now are a separate app on iPhones, iPads and iPod Touch devices, instead of being part of the iTunes app.
To add more multimedia features to iTunes, Apple has been asking music labels for more band photos and videos that can be included, one person said.
ITunes also is part of Apple’s plans to expand in Asia. The company this week announced that it will be opening the digital store in Hong Kong, Singapore, Taiwan and nine other markets in Asia.
Music labels also have been urging Apple to offer a music- subscription service similar to Spotify’s, so customers could pay a monthly fee to get unlimited access to songs, said one person familiar with the matter. Still, Apple isn’t likely to announce that type of service, another person said.
Apple’s shares fell 0.5 percent to $571.79 at 9:33 a.m. in New York. Through yesterday, the stock had increased 42 percent this year.
Apple launched its iTunes Store in 12 Asian markets on Wednesday, giving consumers access to millions of songs and movies, but regional giants China, India and Indonesia were not on the list.
The move by California-based Apple, which has sold more than 16 billion songs worldwide on the online store, enables it to make more money from digital content in markets where its devices have become hugely popular.
Asian musicians would also benefit from having a secure new platform to sell their work to local fans in a region rife with intellectual piracy.
“What took them so long?” said Chen Wei Li, a 28-year-old Singaporean who owns an iPhone, iPad and MacBook Pro laptop.
“I personally am looking to download some music off the iTunes store,” he added.
The iTunes Store is now open to consumers with credit cards issued in Brunei, Cambodia, Hong Kong, Laos, Macau, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Sri Lanka and Vietnam.
It was already available in Japan, Australia and New Zealand.
Customers will now be able to choose from more than 28 million songs, including hits by Asian stars.
They will also be able to rent or buy movies from studios such as 20th Century Fox, Paramount, Universal, Disney and Warner Brothers.
“We know that people will pay for content if they are able to access good services,” said Jasper Donat, the Hong Kong-based president of Music Matters, an annual gathering of executives from the music industry in the Asia-Pacific region.
“Having promoted the Asian music industry around the world for nearly eight years, we are genuinely excited about today’s iTunes announcement and look forward to welcoming more digital entertainment platforms and services to the region soon.”
But China, India and Indonesia — the three most populous Asian countries — were notable omissions from Wednesday’s launch.
“We’re always working to bring the iTunes Store to more customers around the world, as conditions permit,” Apple said in a written reply to AFP when asked why China and India, which have a combined population of 2.5 billion, were not yet included.
Neha Dharia, a Mumbai-based analyst with business research firm Ovum, said several criteria including support for intellectual property rights are considered by Apple before opening up the iTunes Store to any market.
“These include the adoption of Apple devices, consumer preferences for digital distribution of content, ability to forge partnerships for procuring local content and, of course, levels of piracy and the measures to combat it,” Dharia told AFP.
Apple’s Asian expansion, which followed the December launch of the iTunes Store in Brazil and 15 other Latin American markets, now makes commercial sense despite concerns over piracy, another analyst said.
“Up to a certain point, piracy in the whole region was something they were looking at with a critical eye,” said Melissa Chau, a Singapore-based regional research manager with US market intelligence firm IDC.
“But what has changed in the last couple of years was how popular iPads and iPhones have become in this region.
“It makes sense for them to capture revenues from these users who have iPads and iPhones.”
Apple is estimated to have shipped 35 million iPhones and iPads in the Asia-Pacific region excluding Japan in 2011, Chau said.
“This is the natural evolution of an integrated ecosystem for their own products and services,” said Chau.
Apple’s latest earnings report showed it made a profit of $11.6 billion on revenues of $39.2 billion in the March quarter, thanks largely to booming demand for iPhones and iPads in Asia including China.
Senate minority leader Mitch McConnell adamant that al-Qaida suspect Suleiman Abu Ghaith be interrogated at Gu ntanamo
The White House clashed with Republicans on Friday over the decision to prosecute Osama bin Laden’s son-in-law in a civil court in New York rather than holding him at Guant namo.
The Republican leader in the Senate, Mitch McConnell, accused Barack Obama of putting his desire to close Guant namo ahead of the country’s security needs. The decision denied the intelligence community the opportunity to interrogate Suleiman Abu Ghaith to obtain information about possible harm to the US, McConnell claimed.
But the White House spokesman Josh Earnest brushed aside McConnell’s claim. “With all due respect, that’s not the assessment of the intelligence community,” Earnest said.
The row came as Abu Ghaith appeared in a US federal court on Friday to plead not guilty to a charge of conspiring to kill Americans. During a 15-minute arraignment hearing at the southern district court in lower Manhattan, close to where the September 11 attacks took place in 2001, Abu Ghaith spoke only to confirm that he understood his rights.
In a statement on Friday, McConnell said: “The decision of the president to import Suleiman Abu Ghaith into the United States solely for civilian prosecution makes little sense, and reveals, yet again, a stubborn refusal to avoid holding additional terrorists at the secure facility at Guant namo Bay despite the circumstances.
“At Guant namo, he could be held as a detainee and fulsomely and continuously interrogated without having to overcome the objections of his civilian lawyers.”
McConnell added: “From public reports it is clear that Abu Ghaith possesses valuable knowledge of al-Qaida’s activities within Iran. Abu Ghaith has sworn to kill Americans, and he likely possesses information that could prevent harm to America and its allies. He is an enemy combatant and should be held in military custody.”
Other Republicans, including senators Lindsey Graham and Kelly Ayotte, expressed similar sentiments to McConnell. Graham and Ayotte put out a joint statement on Thursday saying they were disturbed by the decision to try him in New York rather than Guant namo and claimed it made the country less safe.
Asked about McConnell’s statement, Earnest, the White House deputy press secretary, said the Pentagon, the Justice Department and the Department of Homeland Security agreed that Abu Ghaith be tried in a civilian court.
These courts “have shown that there are, in many ways, a more efficient way for us to deliver justice to those who seek to harm the United States of America. That is the consensus view of the president’s national security team and of agencies all across the federal government,” he said.
Earnest, speaking at the White House daily briefing, added: “The crimes he has committed are terrible. From at least May 2001 up to and around 2002 Abu Ghaith served alongside Osama bin Laden … This is somebody who is going to be held accountable for his crimes and it will be done in accordance with the laws and values of this country.”
The White House-Republican clash echoes one in 2009 over the Obama administration’s decision to try the alleged 9/11 mastermind Khalid Sheikh Mohammed in New York. The administration, faced with an outcry and warnings that it would pose a security threat to the city, backed off and opted instead for Guant namo.
Obama, unable to fulfill a 2008 election pledge to close Guant namo within a year of becoming president, has gradually been reducing the number of prisoners held at the Cuban detention centre.
In court on Friday, US district judge Lewis Kaplan said that Abu Ghaith faces accusations that “in or about May 2001 to 2002 you conspired with others to kill US nationals”.
Ghaith is accused of being summoned by Bin Laden on the evening of 9/11 and asked to assist in the al-Qaida chief’s campaign.
The following morning, Abu Ghaith, along with Bin Laden and then al-Qaida deputy Ayman al-Zawahiri, released a video in which he warned the US that “a great army is gathering against you” and calling on “the nation of Islam” to fight “the Jews, the Christians and the Americans”.
He later gave a speech in which he warned Muslims “not to board any aircraft and not to live in high rises”. Friday’s court session took place on the ninth floor of a building just a few blocks from the site of the World Trade Center, where nearly 3,000 people died in the worst terrorist atrocity to have been carried out on US soil.
In late February it became known that cable provider Cablevision was suing Viacom over alleged anti-competitive activities involving the bundling of television channels. Viacom blasted the lawsuit as little more than a “transparent attempt [...] to renegotiate our existing two month old agreement [with Cablevision].” Cablevision continues to pursue the lawsuit. Today its complaint against Viacom – a mildly redacted copy – was released. Viacom has several tiers of content, including the Tying Networks, the Core Networks, and the Suite Networks. The Tying channels are the largest, and most commercially critical. Think of Comedy Central, and so forth. All Tying channels are part of the Core channels. The Core channels are therefore must-carries for Cablevision. The Suite channels are lower-value, given their lesser viewership.
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Social networking apps have climbed nine places year-on-year in the App Annie rankings of monthly revenues (via The Next Web), moving from 12th place last January to third place in January 2013.
As of January 2013, the Social Networking category ranked third in monthly revenues, behind only Games and Productivity in the iOS App Store. And that’s up 87% compared to January 2012 monthly revenues, representing 3% of total iOS App Store revenue. Its growth is impressive and nowhere near its ceiling.
The study data shows that the messaging and dating apps are registering as the most significant revenue generators among social networking apps, with LINE, WhatsApp Messenger, and Zoosk leading the way in various countries.
Notably, Apple’s Find My Friends made a climb from 17th place to 2nd in downloads, while Facebook Messenger overtook the main Facebook app to take first place. App Annie attributes the rise of Find My Friends to the App Store splash screen introduced in iOS 6 that encourages users to download several free apps from Apple, including Find My Friends.
As is true for many aspects of Apple’s business, China was one of the fastest-growing markets for social networking apps, with the United States and China now combining to account for half of all social networking downloads worldwide.
An iOS developer has made an app to sync the Philips Hue iOS-controlled LED light bulbs with music.
The $2.99 Ambify pulls tracks from the music library on an iPhone or iPad and plays them while simultaneously controlling the colors and brightness of the Philips Hue lights, creating a rave-like atmosphere with blinking multi-colored light bulbs synced to the music.
Ambify – the Hue enabled jukebox turns music into light using Philips Hue Smart Bulbs.
Being the first of it’s kind, Ambify combines the simplicity of a jukebox with the endless new possibilities offered by Philips’ Hue System.
It’s a s simple as starting the app, selecting your lamps and choosing a playlist.
Ambify then applies our nifty algorithms to analyse and visualise your music in real-time using the lamps you’ve previously selected.
Ambify for iPhone and iPad is available for $2.99 on the App Store. [Direct Link]
New day, new bet on Web video. This one comes from ABS Capital, which is plowing $30 million into Alloy Digital, better known as the home to Smosh.
And if you’re not a teenage boy, here’s what Smosh is:
Seriously? Yup, seriously. This stuff is hugely popular, both on YouTube and on Smosh’s own site, which is a crucial part of the story: While lots of YouTube’s biggest stars are trying to figure out how to make money on the world’s largest video site, the Smosh guys — Ian Hecox and Anthony Padilla, both 25 – figured out early on that they wanted a home that wasn’t owned by Google.
That has helped them create a business that Forbes thinks generated $10 million in revenue in the last year, and that’s why Alloy bought their services in 2011.
Now ABS is putting money into Alloy, which has an array of Web video stars following similar strategies. “The monetization model is Smosh,” says Alloy CEO Matt Diamond.
Which means: Attract eyeballs, and some ad money on YouTube, where Alloy says it has more than 12 million subscribers for the channels it owns (unlike other big YouTube players, it doesn’t spend much time representing other people’s clips on the site).
And then really blow things out outside of YouTube, via more ads, merch deals, iTunes tie-ins and stuff you create directly for sponsors, like this promo/parody paid for by the people behind the Assassin’s Creed videogame franchise:
Alloy and ABS won’t comment on the valuation that comes with the $30 million A round. But it’s worth noting that last year Maker Studios and Machinima raised rounds of $36 million and $35 million, both of which valued the companies in the $200 million range. It’s entirely possible this deal is even richer.
A few years ago when Bank of America Corp. wanted to study whether face time mattered among its call-center teams, the big bank asked about 90 workers to wear badges for a few weeks with tiny sensors to record their movements and the tone of their conversations.
The data showed that the most productive workers belonged to close-knit teams and spoke frequently with their colleagues. So, to get more employees mingling, the bank scheduled workers for group breaks, rather than solo ones.
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