Tuesday, January 26, 2010

HP seeks to make their offer more attractive to the online community

As more consumers turn online to listen to music and on such sites as Spotify, it is being made clear that to attract more customers these sites are a good tie up potential. HP has recognised this and has agreed a deal with subscription music provider Omnifone for 16 of its PCs in ten European countries to offer access to unlimited streamed music from all four major labels and leading independents.

Consumers who buy Pavilion, Presario and Envy PCs will be offered a 14-day free trial for the Musicstation service. The downside of this offer is that the service is time barred and that consumer, after the 14-day trial will be asked to pay £8.99 a month to continue receiving streaming access of up to ten MP3 downloads each month. Is this worth it after all?

Michael Paull, executive VP of global digital business for Sony Music Entertainment, said, “Consumers are asking for innovative digital music services that blend both access and ownership, and come pre-bundled with devices.” However my concern is that, will customers be lured to buy an HP because they are offering a 14day free trial? Most probably such free trials are already being offered by some of the sites themselves and hence this offer could end up not being attractive at all.

What is your opinion on this?

Wednesday, January 20, 2010

Kraft made it...Finally it managed to get Cadburys commitment to sell

As they say the deal is no...and with this, Kraft have managed to get Cadbury's Board of Directors agreement to sell the company. This doesn't come for free to Kraft that has agreed to pay 840p per share which brings the total deal price of £11.6bn in a deal that involves both a cash and share element.

This is the second offer that Kraft made is much higher than the 745p which Kraft had made last September and that Cadbury had totally refused. The market was also expecting a move from either Ferrero or Hersheys as Cadbury preferred to be takenover in a friendly way (rather then in a hostile deal as Kraft tried to do in its initial approach) however both companies took to long to come up with an offer.

This deal did not go down really well with the famous US investor Warren Buffett who said that he had a lot of doubts on the deal. Kraft investors will not have the chance to vote on the deal, which involves the Kraft issuing 265m new shares, equivalent to about 18 per cent of its existing share capital, because that is below the 20 per cent level at which shareholder approval is required.

Mr Buffett, who holds more than 9 per cent of Kraft, said the company was worth more than its current stock price, which fell by 2 per cent at $28.72 in early Wall Street trading on Wednesday and hence the use of stock payment by Kraft make Cadbury's purchase a “very expensive deal”.

What do you think about the deal? Was it an ideal one or could Cadbury have made a better deal by waiting a bit more?

Thursday, January 14, 2010

Google takes action against Censorship

Google has made the first step forward towards keeping faith to it's mission of providing free access to information. In the regards, Google’s issued a threat to China that it is considering pulling out of the country rather than accept to continue self-censorship.

Google declared that it was the victim of a series of cyber-attacks that originated from China. The cyber attacks where not the usual one as these were very sophisticated and targeted Gmail accounts of Chinese Activists. Google said that only two accounts were hacked into and emails were not read.

Although one would expect that other companies would follow suit given that the first step has been taken, Microsoft decided to back out. The chief executive officer of the company, described the Google affair as “a Google problem” and said: “Every large institution is being hacked. I don’t think it’s a fundamental change in the security environment on the internet.”

How will this go ahead? Will Google back down and continue to pursue large earning potentials that China offer or will it step up it's battle?

Friday, January 8, 2010

Google to launch Nexus One

Google have developed and finally launched a new mobile headset that is set to be a direct competitor of iPhone. This phone is Google's first official mobile phone device from the time it acquired mobile operating system company Android in 2005 (the mobile is being built by manufacturer HTC).

The strategy that Google will adopt will be different from that of iphone when it comes to distribution. Although Google will launch the Nexus through Vodafone in the UK, the operator partner will not be granted full exclusivity (Iphone launched in the UK with partner O2 on an exclusive basis). The phone is set to go on sale in the US, Singapore and Hong Kong initially and will later be rolled out in the UK.

The touch screen, sleek phone will cost $179.00 (£111) for a two-year contract with T-Mobile USA. Nexus One can also be purchased for around $529 (£324) on its own. Verizon Wireless in the US will plan to offer services to customers in the near future.

Like the iPhone, Android offers fully integrated web-browsing and video applications with a five megapixel camera. The phone will offer 18,000 apps and but unlike the iPhone, Nexus One allows multiple use of applications at the same time. Users will also be able access Google maps, emails and aggregated contacts. A voice enabled keyboard has also been embedded for speaking text messages, emails, tweets and Facebook updates.

Monday, January 4, 2010

Royal Mail figures published

Royal Mail posted an increase in profitability for the first half of the year up to September 2009. The Postal Company said that its modernisation programme is a key reason why postal workers staged national strikes in October however it helped boost operating profit by £7m to £184m in the six-month period.

Various modernisation techniques were introduced including a walk-sequencing machine which involves a device which organises letters into the order the postmen and women will deliver them the next morning. Adam Crozier, the chief executive of Royal Mail, said the profits and improved delivery figures on record in the spring proved modernisation of the letters business was working.

The figures reported although they show an increase in profitability it also shows a decline in mail volumes . Mail volumes fell about 8 per cent in the period. This decrease resulted in an increase in rivals' volumes such as TNT Post UK and UK Mail are gaining share. To date, one in three letters is handled by rival companies, Royal Mail admitted.

The figures reported here do not include the effect of October's industrial action by 121,000 staff. This could mean that Royal Mail might lose more share to competing companies. Let's wait and see what the next results will report.