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Sunday, July 23, 2017

GSMA warns of Trai spectrum pricing fallout


New Delhi: The London-based GSM Association, or GSMA, has warned that an unrealistic reserve price for 700Mhz spectrum suggested by the Telecom Regulatory Authority of India (Trai) could lead to larger amounts of unsold airwaves, creating a challenge to the government’s stated goal of connecting rural India.

“The GSMA is very concerned by Trai’s recommendation to set a starting price of $1.7 billion per MHz for pan-Indian 700Mhz spectrum,” the GSMA said in a statement

“India has one of the lowest Average Revenues Per User (Arpu) across the world ($2.45 at the end of 2015). Combined with so far limited revenue contribution from data services, competitive pressure on operators’ revenues and high capital expenditure to upgrade networks, this makes it more challenging for operators to recover from high spectrum prices,” according to John Giusti, chief regulatory officer, GSMA.

Referring to the fact that in 2014, the mobile industry contributed 6.1% to India’s GDP, the statement further said that the more the telcos are forced to spend in spectrum, the less capital is available to roll out new networks.

The letter cited the example of Australia where similar unrealistic high reserve price resulted in a valuable portion of the 700MHz spectrum being left unsold and unused.

“High reserve prices and an unrealistic predetermination of spectrum value could also reduce the willingness of potential bidders to buy the spectrum,” the statement said.

Last week, credit ratings agency Fitch said that the top four telcos, Bharti Airtel Ltd, Vodafone India Ltd, Idea Cellular Ltd and Reliance Communications Ltd may hesitate to bid for 700MHz spectrum, given their stretched balance sheets and need to preserve cash in light of impending competition from the entry of Reliance Jio Infocomm Ltd, later this year.

“As such, the price for 700MHz spectrum could exert further pressure on participating telcos’ balance sheets and cash flow, and limit their ability to invest in capex over the medium term,” Fitch said in a statement on 29 January.

“Consequently, the 700MHz spectrum auction planned in 2H16 (second half of 2016) may not be attractive to telcos, given limited device availability and that telcos possess alternative spectrum (850MHz/1800MHz/2300MHz) to roll out 4G services,” the statement added.

Reliance Jio, after having invested about $15 billion on spectrum and networks, has access to the pan-India 800MHz spectrum.

Yahoo to cut 1,700 jobs; shareholders want CEO sacked


SAN FRANCISCO: Yahoo is laying off about 1,700 employees and shedding some of its excess baggage in a shake-up that’s likely to determine whether CEO Marissa Mayer can save her own job.

The long-anticipated purge, announced on Tuesday, will jettison about 15% of Yahoo’s workforce along with an assortment of services that Mayer decided aren’t worth the time and money that the Internet company has been putting into them.

The cost-cutting is designed to save about $400 million annually to help offset a steep decline in net revenue this year.

Mayer also hopes to sell some of Yahoo’s patents, real estate and other holdings for $1 billion to $3 billion.

Products to be dumped include Yahoo Games, Yahoo TV and some of the digital magazines that Mayer started as CEO. She will also close offices in Dubai, United Arab Emirates, Mexico City, Buenos Aires, Argentina, Madrid and Milan.

In an apparent concession to frustrated shareholders, Mayer also said Yahoo’s board will mull ‘strategic alternatives’ that could result in the sale of all the company’s Internet operations. Analysts have speculated that Verizon, AT&T and Comcast might be interested in buying Yahoo’s main business, despite years of deterioration.

Mayer expressed confidence that her plan to run Yahoo as a smaller, more focused company “will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners.”

Shareholders have questioned whether she has figured out how to revive the Internet company’s growth after three-and-half years of futility. Yahoo’s stock shed 34 cents to $28.72 extended trading after details of Mayer’s latest turnaround attempt came out. The stock has fallen by more than 40% since the end of 2014 as investors’ confidence in Mayer has faded.

“The investment community has given up on this becoming a resurrection story,” said Douglas Melsheimer, managing director of Bulger Partners, a technology banking and consulting firm. “At this point, it needs to be managed for maintenance or very slow growth. Marissa is more of a visionary whose background lends itself to a more ambitious strategy. I don’t think she is the one to navigate the company through job cuts or a restructuring.”

Ken Goldman, Yahoo’s chief financial officer, said he got a “neutral” reaction after talking to some investors following Mayer’s presentation. He also acknowledged that both Mayer and he had made some mistakes that they are now trying to correct with this overhaul.

“None of us are perfect in all of our decision making, but I feel good about the plan that we put in place and believe it’s the right one,” Goldman told The Associated Press.

Some of Yahoo’s most outspoken shareholders, such as SpringOwl Asset Management, already have concluded that Mayer should be laid off, too.

Mayer, a former rising star at Google who helped that company eclipse Yahoo, defended her performance.

“Yahoo is a far stronger, more modern company that it was three-and-half years ago,” she said in a video presentation Tuesday.

She also lashed out at reports that Yahoo spent $7 million on its holiday parties in December, labeling the figure as an “untruth” that is more than three times the actual cost of the festivities.

Even after the mass firings are completed by the end of March, Yahoo will still have about 9,000 workers — three times the roughly 3,000 people that SpringOwl believes the company should be employing, based on its steadily declining revenue.

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“We would like to see a higher stock price, and we think Marissa and her current management team have become a hindrance to that,” said Eric Jackson, SpringOwl’s managing director. He declined to disclose the size of SpringOwl’s Yahoo investment.
Yahoo’s revenue has been shrinking through most of Mayer’s reign, even though she has spent more than $3 billion buying more than 40 companies, while bringing in new talent and developing mobile applications and other services designed to attract more traffic and advertisers.

Top Comment
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The decline has persisted while advertisers have been steadily increasing their digital marketing efforts. Most of that money has been flowing to Google and Facebook — two companies once far smaller than the now 20-year-old Yahoo Inc.
Yahoo’s fourth-quarter report provided fresh evidence of the company’s deterioration. After subtracting ad commissions, revenue plunged 15% to $1 billion compared with the previous year — the biggest drop since Mayer became CEO in July 2012. Things continue to look bleak, as Yahoo forecast a net revenue decline of 12 to 17% this year.
The Sunnyvale, California, company reported a fourth-quarter loss of $4.4 billion, reflecting the eroding value of its services. The amount included a $1.2 billion hit for acquisitions made under Mayer, including a $230 million decrease in the value of blogging service Tumblr, which the company bought for $1.1 billion in 2013.

Consumers are turning away from tablets and towards 2-in-1 tabtops


According to new data from Strategy Analytics, consumers have officially fallen out of love with tablets. Despite numerous reports in the lead up to the 2015 holiday season that put devices like the iPad very much at the top of people’s tech gift wish lists, the year ended with tablets experiencing their worst year-on-year performance since the device category’s creation.

Strategy Analytics’ figures show that shipments fell 11 percent over the last quarter of the year and 8 percent over 2015 as a whole — or 224.3 million devices sold in total. Consumers’ growing preference for phablets — i.e., handsets with a display larger than 5.1-inches — has been eroding the appeal for smaller tablets for some time, but the drop-off in interest is about more than simply screen size. Unlike other mobile devices, tablets have remained largely stagnant in terms of what they offer their users.

Peter King, Research Director, Tablet & Touchscreen Strategies service, said, “Apple suffered big setbacks this year as a lack of innovation during the last several years caught up to iPad sales.”
As well as a growing demand for bigger phones, this lack of perceived innovation could explain why tablets with the 2-in-1 form factor, such as Microsoft’s Surface devices, are bucking the trend. Strategy Analytics’ data shows shipments jumped by 379 percent year on year.

Eric Smith, Senior Analyst, Tablet & Touchscreen Strategies service, added, “2-in-1 detachable tablets have reached an inflection point in 2015. As computing needs continue to trend, more and more mobile and tablets with Windows 10 can compete against iOS in the premium and high price bands, and equally well against Android in the mid and lower price bands. The Q4 2015 launch of Surface Pro 4 and Surface Book was met with many “Surface clones” by Microsoft’s OEM partners at lower price points. This variety of devices will bolster momentum of Windows tablets going forward.”

There is belief that Apple’s iPad Pro will develop into a very desirable device: “We see real long-term potential for [it] in the enterprise and verticals,” said King. But experts believe it will take time. However, reports suggest that Apple will be addressing this lack of innovation in its mainstream iPad range as soon as March. Several sources have claimed the iPad Air 3, Apple’s 9-inch slate, is going to get a better camera, complete with flash, four rather than two speakers, and, most importantly, considering the booming popularity of 2-in-1s, the same smart connector that’s on the iPad Pro for clipping to proper keyboards and other peripherals.

Toshiba Develops a Wide-Input-Voltage-Range High-Efficiency Switched-Capacitor DC-DC Converter for Wireless IC


Toshiba Corporation (TOKYO:6502) today announced the development of an on-chip switched-capacitor DC-DC converter for wireless ICs that offers up to 95.8% efficiency with a 0.85-to-3.6V wide input voltage range, and a 0.1-to-1.9V wide output voltage range. The DC-DC converter extends the battery life of wireless devices, and supports use of both 3V lithium battery and 1.5V alkaline battery with the same design. This advance was announced at the 2016 IEEE International Solid-State Circuits Conference (ISSCC) in San Francisco, California, on February 2.

Many of today’s wireless ICs have embedded DC-DC converters instead of LDO regulators to reduce the power consumption of the ICs. However, mainstream inductor-based DC-DC converters require an inductor that is relatively bulky and expensive. Capacitor-based DC-DC converters have gained attention recently on their ability to offer a compact, low cost module. However, switched-capacitor DC-DC converters offer high efficiency only in a limited input and output voltage range, since they are based on a discrete conversion ratio; inductor-based DC-DC converters have a continuous conversion ratio. Conventional techniques solve this by connecting multiple switched-capacitor units in series, but this incurs an efficiency penalty.

Toshiba has solved the issue by developing a new unified switched-capacitor topology with 3 capacitors and a multiple switch control architecture, that achieves multiple conversion ratios. Switched between the appropriate configurations of capacitors, this switched-capacitor DC-DC converter offers up to 95.8% efficiency with a 0.85-to-3.6V wide input voltage range, and a 0.1-to-1.9V wide output voltage range. It also supports auto-configured step-up and step-down power conversions, and can provide 2 channels of regulated output voltages.

Toshiba will continue to research this technology toward providing lower-cost and thinner wireless device modules, and plans to use the switched-capacitor in a low-power wireless IC released in three years time.

About Toshiba

Toshiba Corporation, a Fortune Global 500 company, channels world-class capabilities in advanced electronic and electrical product and systems into five strategic business domains: Energy & Infrastructure, Community Solutions, Healthcare Systems & Services, Electronic Devices & Components, and Lifestyles Products & Services. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations and is contributing to the realization of a world where generations to come can live better lives.

Founded in Tokyo in 1875, today’s Toshiba is at the heart of a global network of over 580 consolidated companies employing 199,000 people worldwide, with annual sales surpassing 6.6 trillion yen (US$55 billion).
To find out more about Toshiba, visit www.toshiba.co.jp/index.htm

Lenovo Delivers Strong Q3 Profit


Innovative products, operational efficiency and realignment actions drove Lenovo’s strong performance in Q3, despite economic and industry headwinds

  • Return to profitability in Q3 – with pre-tax income (excluding non-cash, M&A-related accounting charges) of US$397million, reported pre-tax income of US$320 million, up 17% year-over-year, and net income of US$300 million – after the restructuring and one-time charges that drove a loss in Q2
  • Revenue was US$12.9 billion, down 8% year-over-year or down 2% in constant currency
  • Lenovo swiftly concluded its restructuring plan and is on track to deliver savings of US$650 million in the second half of the year and US$1.35 billion annually
  • Lenovo achieved its stated goals of achieving breakeven in its mobile business 4-6 quarters after the close of the Motorola deal, and remains on track to reach US$5 billion in Enterprise revenue, on a constant currency basis
  • Lenovo grew its PC market share and achieved a record high 21.6% share*
  • Basic EPS of 2.71 US cents, or 21.01 HK cents
Lenovo Group (HKSE: 0992) (PINK SHEETS: LNVGY) today announced results for its third fiscal quarter ended December 31, 2015. Quarterly revenue was US$12.9 billion, an 8 percent year-over-year decrease, or 2 percent year-over-year in constant currency. Third quarter pre-tax income, excluding non-cash, M&A related accounting charges of US$77 million, was US$397 million, while reported pre-tax income was US$320 million, up 17 percent, exceeding analyst’s estimates. Net income was US$300 million, up 19 percent, also exceeding analyst’s estimates.

The decisive realignment actions that Lenovo announced in August 2015 are on track to realize US$1.35 billion in full year run-rate savings. These savings are giving Lenovo a cost structure that is significantly lower than its peers. Combined with its solid execution and innovation pipeline, Lenovo is transforming its business model, processes and organization, positioning itself to maintain a healthy business even in the current environment.

“Last quarter, although we were impacted by the global macro-economic slowdown, currency fluctuations in key markets, and PC market decline, Lenovo still achieved record high profit and delivered on our commitment to turn around the Mobile business,” says Yuanqing Yang, chairman and CEO of Lenovo. “Next, in PCs, we will leverage the consolidation trend, commercial PC replacement, and opportunities in innovative product categories to drive growth. In Mobile, we will build scale and efficiency to accelerate our growth in emerging markets, breakthrough in mature markets with innovative products and premium brands, and expand in the open market in China with a stronger product portfolio. And finally, in Enterprise, we will leverage leading technologies and strategic partnerships to drive profitable growth.”

The Company’s gross profit for the third fiscal quarter decreased 10 percent year-over-year to US$1.9 billion, while gross margin stood at 14.6 percent. Operating profit for the quarter was US$379 million. Basic earnings per share for the third fiscal quarter was 2.71 US cents, or 21.01 HK cents. Net debt reserves as of December 31, 2015, totaled US$49 million.

Business Group Overview**

In the PC Group, or PCG, which includes PCs and Windows tablets, Lenovo’s quarterly sales were US$8 billion, down 12 percent, with pre-tax income of US$405 million, down 18 percent year-over-year. Greater than expected slowdown in the PC market and foreign exchange fluctuations hurt the PC group’s results. Pre-tax income margin of 5 percent, was comparatively stable, declining 0.4 points year-over-year, showing Lenovo’s operational strengths.

Lenovo remained #1 for the 11th straight quarter. It achieved a record high 21.6 percent market share, widening its lead over the #2 vendor. It shipped 15.4 million PCs in the quarter, with a 6.7 point premium to the overall market decline of 10.9 percent. In the worldwide consumer segment, Lenovo had record 19.7 percent market share. In China, Lenovo’s market share grew 1.7 points allowing it to break the 40 percent market share threshold for the first time ever. Lenovo will leverage industry consolidation, a strong commercial refresh driven by Windows 10, and dazzling new convertible and detachable products to grow market share and achieve its goal of 30 percent worldwide PC market share, while maintaining strong profitability.

In the Mobile Business Group, or MBG, which includes products from Motorola, Lenovo-branded mobile phones, Android tablets and smart TVs, Lenovo met its commitment to breakeven 4-6 quarters after acquiring Motorola, with successful restructuring and a strong performance in Emerging Markets outside China. The unit’s quarterly sales were US$3.2 billion, down 4 percent from Q3 FY 2014-15, which included two months of Motorola’s results. Motorola contributed US$2 billion to Lenovo’s MBG revenues. MBG’s total pre-tax loss was US$30 million, with a pre-tax loss margin of 0.9 percent, up 7.2 points quarter-to-quarter.

Total smartphone volume declined 18.1 percent year-over-year with 20.2 million units sold. Outside of China, Lenovo saw a 15 percent growth rate year-over-year, driven by Emerging Markets outside of China. Lenovo saw hypergrowth in smartphone shipments in India and Indonesia, which were up 206 and 318 percent, respectively. Last quarter, 75 percent of volume was outside China; this quarter it increased to 83 percent. Also, Motorola saw shipments jump 25 percent quarter-to-quarter, showing further stabilization. In China, Lenovo’s restructuring has begun to pay off. And a new solid dual-brand strategy – with two main brands Lenovo Moto and Lenovo Vibe — is set driving consistency and efficiencies for the smartphone business.

In the Enterprise Business Group, or EBG, which includes servers, storage, software and services sold under both the ThinkServer and System x brands, sales were US$1.3 billion, up 8 percent year-over-year and 12 percent quarter-to-quarter. System x had approximately US$1 billion in sales. Reported PTI – which included non-cash, M&A-related accounting charges – was negative US$14 million, improving both annually and sequentially. EBG was operationally profitable in the quarter. Moreover, it has delivered improving revenues and operational pre-tax income each quarter since System x was acquired.

This performance was driven by hyperscale wins in China. EBG stabilized its traditional data center-focused business, while attacking fast growing cloud, hyperscale and hyperconverged opportunities. On the partnership front, promising new partnerships with software and hyper converged players – Nutanix, Red Hat and, just recently, SAP – differentiate Lenovo’s offerings and strengthen its competitiveness. Lenovo remains on track to achieve its US$5 billion target for the Enterprise business in the 2015-16 fiscal year, on a constant currency basis.

Geographic Overview

In China, consolidated sales in the third fiscal quarter, declined 14 percent year-over-year to US$3.5 billion, accounting for 27 percent of the Company’s worldwide sales. Pre-tax income margin fell 1 point to 4.7 percent year-over-year.

In PCs, China saw record 40 percent market share. In Mobile, actions were taken to improve channel performance. With the new dual-brand strategy and a better product portfolio, mobile performance is improving. Enterprise revenue grew 30 percent from strong ThinkServer shipments to hyperscale customers Baidu, Alibaba and Tencent, allowing Lenovo to maintain its number one position in the China x86 server market.

In the Asia Pacific region, Lenovo achieved sales across the region of nearly US$2 billion or 15 percent of Lenovo’s worldwide sales, while operating margins were down 4.4 points to 1.0 percent year-over-year, mainly due to the contraction in the Japan PC market and impacts from currency fluctuation.

In PCs, Lenovo kept its #1 position with 18.9 percent market share, up 2.8 points year-over-year. This performance was driven by India which grew 55 percent year-over-year. Mobile saw strong smartphone shipment growth of 123 percent across the region, driven by strong momentum in India, and Indonesia, which grew by 206 percent and 318 percent, respectively. Finally, the Enterprise business grew share and improved profitability.

Lenovo in Europe, Middle East & Africa had consolidated sales in the third quarter of US$3.5 billion, a year-over-year decrease of 15 percent, hit by foreign exchange moves and a soft PC market. EMEA accounted for 27 percent of Lenovo’s total worldwide sales. Pre-tax income margin was 1.7 percent, a 1.3 point decrease year-over-year.

Lenovo maintained its #2 position in the PC market regionally, with 19.4 percent share. In consumer PCs, it was #1 for the eighth straight quarter. In Mobile, Lenovo had a record 4.7 million shipments, up 48 percent year-over-year. In Enterprise, Lenovo invested resources to continue to stabilize the top line.

In the Americas, Lenovo saw consolidated sales fall 7 percent year-over-year to approximately US$3.9 billion in the third quarter. This represented 31 percent of Lenovo’s total worldwide sales. Operating profit in the region was US$76 million, versus a loss of US$22 million recorded in the same period last year. Operating profit margin was 1.9 percent. The improved performance was a result of recent overall business realignment and restructuring actions in Brazil and Latin America.

Regionally, PC market share increased by 1.9 percentage points from a year ago to 13.1 percent, according to preliminary industry estimates. The solid performance was driven by the strong growth in the critical US PC market, where shipments grew by 21 percent year-over-year against a market decline of 4 percent. This brought Lenovo’s U.S. market share to 12.5 percent, up 2.6 percentage points year-over-year. In mobile, new Motorola phones drove a strong 52 percent increase in quarter-to-quarter shipments in North America, while some hyperscale opportunities generated good results for Enterprise.

* see IDC data 4Q 2015

** The Company provided financial breakdowns by product through the FY14/15 Q2 results announcement. After the Motorola and System x investments closed during Lenovo’s FY14/15 Q3, Lenovo began reporting by business group in order to aid understanding of the performance of these businesses.

About Lenovo

Lenovo (HKSE: 0992) (PINK SHEETS: LNVGY) is a $46 billion global Fortune 500 company and a leader in providing innovative consumer, commercial, and enterprise technology. Our portfolio of high-quality, secure products and services covers PCs (including the legendary Think and multimode YOGA brands), workstations, servers, storage, smart TVs and a family of mobile products like smartphones (including the Motorola brand), tablets and apps. Join us on LinkedIn, follow us on Facebook or Twitter (@Lenovo) or visit us at www.lenovo.com.



For the fiscal quarter ended December 31, 2015

(in US$ millions, except per share data)

Q3 15/16 Q3


Revenue 12,913 14,092 -8%
Gross profit 1,885 2,097 -10%
Gross profit margin 14.6% 14.9% -0.3 pts
Operating expenses (1,506) (1,772) -15%
Expenses-to-revenue ratio 11.7% 12.6% -0.9 pts
Operating profit 379 325 17%
Other non-operating expenses (59) (51) 16%
Reported pre-tax income 320 274 17%
Pre-tax income (*excluding non-cash M&A related accounting charges) 397 348 14%
Taxation (26) (17) 50%
Net profit for the period 294 257 14%
Non-controlling interests 6 (4) N/A
Profit attributable to equity holders 300 253 19%
Earnings Per Share (US cents)







* Non-cash M&A related accounting charges of US$77 million were excluded from this metric (FY14/15 Q3: US$74 million).

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