The digital business week


2 Jul 2012

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RIM's headquarters in Waterloo, Ontario, Canada

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

RIM reports Q1 loss and 5,000 job cuts – talk of a major Nokia-style deal with Microsoft

Research in Motion (RIM) chief executive Thorsten Heins has said he is not happy with the company’s performance in Q1, revealing its first quarterly loss in eight years. The company has had to delay the launch of BlackBerry 10 and will reduce staff numbers by 5,000 people.

The company reported revenues of US$2.8bn, down 33pc from US$4.2bn in the prior quarter. The company reported a net loss of US$518m, its first in eight years.

Coding and implementation of BlackBerry 10 are taking longer than expected and the company now expects to launch the first BlackBerry 10 smartphones in Q1 of 2013.

The company also plans to cut an additional 5,000 jobs beyond its recent round of layoffs in a move calculated to save the company US$300m.

It has been reported that the board of RIM is under increasing pressure to sell its network business or form an alliance with Microsoft as the rate of decline of the former smartphone market leader accelerates.

Among the options being presented is the potential of abandoning its own operating system and adopting Microsoft’s Windows 8 – a move that would no doubt prove unpalatable to many BlackBerry diehards and supporters of a company that made the mobile messaging business a reality.

However, it is believed the RIM board also sees this move as unconscionable and would rather stay on the road of developing BlackBerry 10.

Ulster Bank to have normal service back early this week

The 100,000 customers who have been affected by a technical glitch at Ulster Bank since 20 June may finally see the restoration of normal service early this week.

Ulster Bank had said a corrupted software upgrade to the payment-processing system caused the original technical problem.

The glitch disrupted salary transfers, direct debits and social welfare payments, causing a delay in processing certain payments to bank accounts.

“We’re making progress on this and are confident that this will help us restore a full service for the start of next week in Ulster Bank,” the bank said on Friday. “We are grateful for your patience.”

Ulster Bank had extended its opening hours all of last week and took thousands of calls on its help desk in an effort to help customers access their funds and answer their questions.

Sony appoints Kazuo Hirai as president and CEO

Electronics giant Sony has appointed the former head of its games division Kazuo Hirai as president and chief executive officer in an effort to bring the company back to profitability.

Shareholders approved the appointment of Hirai following an annual meeting in Tokyo, Japan, where the shareholders grilled Hirai and other board members over how Sony would turn its fortunes around, the Associated Press reported.

In March, Sony reported its worst loss in its 66-year corporate history, for the fiscal year that ended that month. A soaring yen, flooding in Thailand, global economic slowdowns, and the earthquake and ensuing tsunami in March 2011 all battered Sony’s profitability.

In April, Sony confirmed it would cut 10,000 staff globally as part of a major restructuring of its business to become more competitive.

In his new role, Hirai replaces Howard Stringer, who is now chairman of Sony’s board.

Facebook COO Sheryl Sandberg joins its board of directors

Social networking giant Facebook’s chief operating officer Sheryl Sandberg has joined the company’s board of directors in a move that makes her Facebook’s first female director.

Sandberg, who oversees Facebook’s business operations, including sales, marketing, business development, legal, human resources, public policy and communications, said she feels lucky to be part of a company that is having a profound impact on the world.

She also serves on the boards of The Walt Disney Company, Women for Women International, the Center for Global Development and V-Day.

In addition to Sandberg and Facebook CEO Mark Zuckerberg, other members of Facebook’s board are Marc L Andreessen, Andreessen Horowitz; Erskine B Bowles, president emeritus, University of North Carolina system; James W Breyer, Accel Partners; Donald E Graham, chairman and CEO, The Washington Post Company; Reed Hastings, chairman and CEO, Netflix; and Peter A Thiel, Founders Fund.

IBM opens two new branch offices in China

Technology giant IBM has opened two new branch offices in the Chinese cities of Yantai and Yinchuan, bringing its total number of locations in the country to 50.

The new offices are part of IBM’s ongoing investment in the world’s second-largest economy, encompassing the creation of new offices, facilities, training and recruitment, sales and marketing and corporate citizenship.

"China is a key market for IBM and we have a major programme of geographic expansion in place to ensure that we tap into the country’s best growth opportunities – wherever they are," said Qian Daqun, chairman and CEO of IBM Greater China Group.

"As the IT market in China’s regional cities matures, we are experiencing greater demand for advanced solutions and services, meaning that a local physical presence is essential for our business."

Study reveals growing importance of technology for retailers

Digital signage, payment processing, and other IT innovations are playing increasingly important functions in the retail sector, suggests new research by CompTIA, a non-profit association for the IT industry.

Seventy-two per cent of retailers said technology is important to their business, and that figure is forecast to rise to 83pc by 2014, CompTIA’s Retail Sector Technology Adoption Trends Study reveals.

The study also shows that 63pc of retailers expect to increase their IT spending this year.

One in three retailers now use digital signage, with an additional 20pc intending to do so soon. The most popular uses for digital signage are promotional announcements and other direct engagement with customers, cited by 71pc of respondents.

Among all emerging technologies, adoption intent is highest for geolocation services. About one in five retailers now use geolocation technologies and other location-based solutions to reach customers.

Retailers are experimenting with technologies that improve upon point-of-sale systems or leapfrog those systems entirely and leverage new platforms for payment processing.

In the CompTIA study, 13pc of retailers are using a mobile payment system, and 19pc plan to do so over the next year.

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