The digital business week

12 Jul 2010

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

EI firms to create 60,000 jobs by end 2015 – O’Keeffe

Enterprise Ireland-supported companies are set to create 60,000 new jobs by the end of 2015, the Minister for Enterprise, Trade and Innovation Batt O’Keeffe TD said as the government’s agency’s annual report for 2009 was published.

According to O’Keeffe, the EI 2009 report shows a “resilient” performance by Irish firms during 2009, with the agency’s client companies continuing to win new export sales, start new high-potential enterprises, invest in high-value research and development projects and create jobs last year.

The report showed that total export sales by Enterprise Ireland client companies in 2009 were almost €13bn and included new export sales of €693m. This represents 90pc of the levels achieved in 2008, which itself was a record year. Many companies maintained their existing export business while a number of sectors recorded growth in total export sales, including software, internationally traded services and life sciences, EI said.

According to its annual report, Enterprise Ireland made seed-capital investments in 73 new high-potential start-up companies across 2009. Together these firms will create more than 900 new jobs and achieve total sales of more than €600m within the next three years, the government agency said.

In all, Enterprise Ireland’s investment in more than 800 start-up companies over a 20-year period (1989 – 2009) has yielded more than €1bn in Irish exports and in excess of 14,000 jobs.

SME teleworking/working from home doubles

The number of SME directors teleworking or working from home has doubled over the last five years, according to a survey by O2.

Today, nearly half (49pc) of SME directors in Ireland telework at least one day a month, up from 25pc five years ago, according to the survey of more than 300 SMEs which was conducted for O2 by Behaviour & Attitudes.

“The growth in teleworking by SMEs has been greatly facilitated by the continued uptake of services such as mobile broadband and O2’s new fixed line service for SMEs,” said Alan Brown, business sales director with Telefónica O2 Ireland.

Just over a quarter (26pc) of SME directors work from home more than four days a month, the survey showed, while 23pc say that the teleworking habit will rise in the future. A quarter of senior executives in SMEs who don’t currently use mobile broadband are also considering using it, according to the study.

AMOLED display shortage could dull Android’s edge

A global shortage of small-sized active matrix organic light emitting diode (AMOLED) displays used in Android and Samsung Bada smartphones could slow the display technology’s bid to challenge the dominance of the incumbent AMLCD technology in the smartphone market.

According to iSuppli, shipments of small-sized AMOLEDs used in mobile phones like the Samsung Wave HD and other applications are projected to reach 184.5 million units by 2014, up from 20.4 million units in 2009, for a Compound Annual Growth Rate (CAGR) of 55.1pc during the period, according to a revised forecast from iSuppli.

While such growth is impressive, the AMOLED shipments pale next to small-sized AMLCDs, which are forecasted to rise to 1.75 billion units by 2014 from 1.3 billion in 2009.

“Starting with the Nexus One introduced in January, Android-based smartphones have aggressively adopted high-quality AMOLED displays as a competitive differentiator against the advanced-technology AMLCD screen used in the iPhone,” said Vinita Jakhanwal, principal analyst for small and medium displays at iSuppli. “However, rising demand — combined with a limited supply base — has led to the constrained availability of AMOLEDs.”

Businesses acquiring customers through social networks

Forty per cent of businesses in Ireland have used social networks to win new business, according to a new global survey commissioned by Regus.

The survey also found that 26pc of Irish businesses have set aside a proportion of their marketing budget specifically for social-networking activities.

In Ireland, 41pc of companies plan to devote a proportion of their marketing budget to social-networking activities by the end of 2010. Some 48pc of respondents in Ireland used social networking to keep in touch with contacts, slightly below the global average (58pc).

The same percentage of Irish-based respondents (48pc) said the main usefulness of social networks is the ability to manage and connect to customer groups (compared with 51pc globally), while 53pc use them to find important business information (54pc globally). Just over one-fifth (21pc) of respondents said they are sceptical that social networking could ever become an effective customer retention or prospecting tool (34pc globally).

US$204bn European IT services returning to growth, IDC says

A forecast return to relative economic stability has meant IDC is keeping its forecast for Western European IT services unchanged for this year, with demand set to pick up in the Nordics first.

IDC’s second quarterly revision for 2010 of its Western European IT services forecasts estimates that total end-user spending on external IT services in 2010 will be close to US$204bn in Western Europe, and that demand growth will pick up from 2011 to reach $232bn in 2014.

IDC revises its forecasts each quarter in the light of economic and industry trends, and its forecasts are in constant currency, thus excluding the effects of currency movements.

Demand in the Germanic and Nordic regions is expected to pick up first, while growth in France and the UK will be slower. Demand in the UK is subject to more uncertainty, as new government initiatives to be announced in the autumn could affect not only direct government spending, but also the overall economy in a manner that would lead to reduced IT services spending in the short term.

IT services include project-oriented services (such as IT consulting, systems integration and custom application development), outsourcing services (such as data centre outsourcing and application management), and support services (such as IT training and hardware and software deployment). IT services exclude business consulting and business-process outsourcing (BPO).

Samsung predicts 14pc increase in sales for Q2

Korean consumer electronics giant Samsung said it is predicting a 14pc jump in second-quarter sales and will reap an operating profit of KRW5trn (US$4bn) based on continued success in the mobile phone and TV business.

Samsung, which has just unveiled its Wave HD smartphone as well as the Android-based Galaxy S smartphone, is continuing to press home its advantage in the consumer electronics area. The company is busy consolidating its No 2 position in the global mobile business as well as driving innovation in terms of web-connected HD TVs.

According to the company, its second-quarter revenues are likely to come in at KRW34.6trn, up 14pc on year-ago sales of KRW32.51trn.

For 2009, the company had consolidated sales across all divisions of US$116.8bn.

The company, which employs 188,000 people worldwide and whose semiconductors even feature in rival devices like the iPhone, has been achieving marked success in the mobile-phone industry in a relatively short time.

According to IDC, Samsung’s shipments grew 18pc year on year in the first quarter of this year to to 12.5 million units and market share increased from 27pc in Q1 2009 to 29pc in Q1 2010.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years