The digital business week

1 Nov 2010

A digest of the top business and technology news stories from the past week.

Corporation tax is non-negotiable, says HP managing director

Stressing the continuing importance of Ireland’s foreign direct investment community to the Irish economy, the managing director of HP Ireland said corporation tax is a non-negotiable part of the tax regime for multinationals and the 12.5pc rate must be sustained.

Murphy said that ahead of the Budget there is work to be done in making it easier for Irish people to start their own businesses and that many people who worked in multinationals in the past will have an important role to play.

“Getting people back to work is paramount for Ireland and there are two dimensions – FDI and indigenous SMEs. We are good at creating start-ups but we need to make it easier for people to set up companies and bring them through to fruition. We need to make it easier for people who leave school and college to set up businesses.”

Is Apple plotting acquisition of Sony?

With its US$51bn warchest, rumours that Apple is plotting the acquisition of Japanese technology giant Sony have been gaining pace.

Sony’s stock jumped 3pc on the foot of rumours fuelled by a recent report by Barron’s that suggested Apple could buy Sony.

Other targets suggested include Adobe, Facebook, Electronic Arts, Netflix and Disney.

It has been suggested that such an acquisition would be deemed a hostile takeover and the acquisition of Sony may not be well received in Japan.

Also fanning the flames of rumour was an interview carried out with former Apple CEO John Sculley, who revealed how fascinated Steve Jobs was by Sony in terms of its products and its manufacturing processes.

Sculley said that if there was a company Jobs would acquire it would be Sony rather than Microsoft.

Cork engineering firm reports 30pc increase in turnover

A Cork engineering firm fitting out Google’s new campus in Dublin has reported a 30pc increase in turnover from €50m last year to €65m this year based on growth in markets like life sciences, energy, manufacturing, oil, gas and electricity.

Dornan Engineering provides mechanical, electrical and instrumentation services to these markets.

“We were fortunate to have positioned ourselves in markets outside of Ireland in advance of the downturn and are enjoying considerable growth there, with established offices in London, Manchester, Dusseldorf, Antwerp and Stockholm to service those areas,” said Oliver Lonergan, the company’s managing director.

“Turnover has grown from €50m in ’09 to in excess of €65m this year. We remain fully committed to our existing client base in Ireland, however, this is a diminishing market but there is still scope for maintaining a presence with repeat business and through winning smaller contracts.”

Microsoft reports US$16bn quarter driven by Windows 7 takeup

Widespread enterprise adoption of Windows 7 and Office and the ongoing PC refresh cycle played a significant role in delivering Microsoft a US$16bn first quarter – a 25pc increase on the same quarter last year.

As a result, the company was able to deliver a US$5.4bn profit – up 51pc on last year.

The company said that revenues and profits were affected by having to defer US$1.4bn of revenue due to the Windows 7 Upgrade Option programme and sales of Windows 7 to OEMs and retailers before general availability in October 2009.

Operating income, net income and diluted earnings per share for the quarter were US$7.12bn, US$5.41bn and US$0.62 per share, which represented increases of 59pc, 51pc and 55pc, respectively, when compared with last year’s period.

Without the deferral in the prior year, first-quarter growth rates for revenue and operating income were 13pc and 20pc, and growth in net income and earnings per share were 16pc and 19pc, respectively.

Nintendo experiences loss in earnings

Nintendo has experienced losses in the first half of the year, thanks to the rising yen and falling sales.

Nintendo reported a US$2.47m loss for the first half of the fiscal year, dropping 34pc to US$4.46bn.

This loss was expected, and it has been partially blamed on the yen’s strength against the dollar. It reported a cost of US$764m in “exchange losses.”

The losses were also due to the decline in demand for its Wii console. Nintendo forecast a further drop, because of these reasons, along with sales expectations for Christmas.

LG records record third-quarter loss

South Korean electronics company LG has reported a third-quarter record operating loss largely due to poor mobile phone sales.

Faltering handset business in the most recent quarter compared to the same time last year have resulted in LG’s poor performance and the company has fallen behind in the ever-strengthening smartphone market.

The loss represents a huge downturn from results a year earlier. The company, a major television manufacturer, has also suffered from a lack in TV model sales.

Handset sales suffered in the third quarter and deteriorated to 10.2pc, compared with a 3.5pc loss margin in the second quarter.