Tab News - PJ Louis LLC

Supply Chain Management – An Art and Science – Change is Needed - Additional Thoughts

PJLouis — Mon, 13 Feb 2012 18:26:09 GMT

http://www.big4.com/accenture/accenture-report-identifies-need-for-new-supply-chain-management?utm_source=twitterfeed&utm_medium=linkedin

Accenture and the World Economic Forum have reported a growing need for supply chain management policies due to growing concerns over security.

Over the last couple of years we have seen crises like the Japanese tsunami, the global recession, ongoing national security threats, and the Chinese earthquakes adversely impact labor, raw materials, and component supplies.

There are economic and efficiency reasons for why supply chains for certain raw materials, processes, and components will concentrate in certain countries. However, efficiency and economic reasons are not sufficient to justify such a long term scenario. Rather, it is important that industries of all types re-examine the need to diversify the supply chain.

The global economy would benefit from such diversification. There would be short term pain while shifting a portion of chip manufacturing from Japan to Mexico. Mexico is an untried location for chip manufacturing but that is not the point. The Mexican government has expressed an interest in being a center for chip fabrication.

Another thought is to look to countries like Viet Nam for electronics manufacturing. Basically, the business community needs to look at emerging economies as new centers of manufacturing.

I would even suggest going back to countries like Germany for steel making and the United States for electronics and other consumer goods.

The governments cannot order the changes in supply chain management. However, the business community can if it takes the bold step towards investing capital in new locations. My proposal is an oversimplification of what needs to be done. The bottom line; one more natural or manmade disaster and the business community will actually spend the money looking to diversify suppliers around the world.

The smart thing to do is to begin making changes in the supply chain now. The food supply today is so diverse you can get fruit and vegetables of all kinds at anytime of the year because they are all grown in so many diffrerent countries. Technology and equipment can and should be treated in the same manner.

Groupon – Is it Cash Poor? Heading for a total Collapse? YES - No Change Months Later

PJLouis — Wed, 21 Dec 2011 04:25:26 GMT

I saw this blog posting that just posed a question: Is Groupon cash poor? When you run through the analysis on the posting you get the strong impression the company has serious cash issues.

http://www.nbcchicago.com/blogs/inc-well/groupon-betabeat-cash-poor-data-center-135940573.html

Read this person’s blog.

By the way in my opinion unless the company makes some drastic changes, Groupon will be heading for "bankruptcy". Rule One for running a business you need to make more money than you are spending.

The company is still cash poor.

The Apple Boycott – Why It Will Work

PJLouis — Sat, 11 Feb 2012 12:25:37 GMT

http://www.pcworld.com/article/249100/apple_boycott_urged_over_foxconn_investigation.html

There have been a number of media journalists who have supported a boycott of Apple products and there have been just as many who have not supported a boycott.

Here is a message to those who do not support a boycott: The mere mention of a boycott of Wall Street’s darling has scared the living daylights out of anyone who is making money off of Apple. Supposedly Foxconn is worried about a boycott of Apple products as well. The fear of a boycott is causing movement; imagine what a boycott can do.

Boycotting Apple products will do the one thing that boycotting another manufacturer of consumer goods will not do: Bring Attention. Bad people hate being noticed and they hate it even more when you are watching closely. Close attention forces action.

Remember, Wall Street calls Apple “the world’s most respected company”. This reputation has to account for something.

As for Apple being offended by remarks like mine: “Tough. You got the money to make the Chinese listen so make them listen and act”.

Apple – Do the Right Thing – Time to BOYCOTT Apple Products

PJLouis — Fri, 10 Feb 2012 13:16:50 GMT

http://mashable.com/2012/02/09/apple-foxconn-petitions/

This is an issue of ethics versus profit. You either care or you don’t.

What can I say except that you have to fall on one side of the issue.

Look I understand Apple is considered to be a god-like company. However, we know that is not so. The company has to operate under the same ethical rules as any other company.

All Apple has to do is force its manufacturers to put in place safety standards that actually protect the workers. However, for whatever reason because it is making a fortune on products using cheap adult and child labor, not a single politician, celebrity, average person, or investment banker has said a thing. I guess making money is more important than life.

My suggestion to protesters: BOYCOTT Apple products now. I am sure Motorola, Samsung, and Nokia will be more than happy to supply product.

Remember Apple has known about the abuses for the last several years and has only paid lip service and token gestures to stop the abuses. All Apple has to do is to reduce the pressure on the Chinese and allow them to make a living and not force them to make Apple products for next to nothing. Of course this means Apple has to raise prices on its products to continue making its outraegous profit margins.

Apple it is called - behaving morally and ethically.

Here is somethign to think about - Steve Jobs was alive when all this was going on. Only now after Steve Jobs has died that truth is coming out; were people that afraid of him?

Apple and Others – Tolerate Labor Abuses in China - Outsourcing Gone Wrong? Blood Money? - BOYCOTT - Update COMMENTS

PJLouis — Sat, 28 Jan 2012 02:49:03 GMT

http://www.msnbc.msn.com/id/46143670/ns/business-us_business/#.TyFM7YHsaq0

http://www.thisamericanlife.org/radio-archives/episode/454/mr-daisey-and-the-apple-factory?act=1

http://www.thisamericanlife.org/play_full.php?play=454

Well the truth has finally come out. Apple and others are using Chinese labor to make high quality and high priced iPhones, iPads, tablets, smartphones, etc. and making a ton of money on the cheap labor and unsafe working conditions.

There is nothing wrong with using low cost labor. It is difficult for products companies to keep track of labor abuses. However, that is why companies hire auditors and have their own teams focus on labor safety. This posting started off as a look at Apple. The problem is bigger than Apple. However, because Apple is one of the companies that have become a focus of so-called mainstream media, I will focus on Apple.

Does Apple ever proclaim their manufacturers are ISO 9000 compliant? If so then someone better nail them for lying to the public and the international standards organization ought to give consideration about how corporations throw that designation around. All that aside. Let us focus on the issue.

According to recent articles, Apple has known about these abuses for years. Where are the outraged celebrities and politicians? I certainly hope this is not “an Asian thing”. Or maybe this is about “money”?

I actually think it is about “money”. I like money. I do not begrudge anyone who wants to make anyone; as long as it is done honestly.

I understand that consumers have no way of knowing what manufacturers are used by the various products companies that are selling their products. The average consumer assumes the sellers are doing what they are supposed to be doing, which is to make products that are free of blood.

They use to call these sweatshops in the US. Now that the USA hardly makes anything here it is easy to forget that we would never want our own citizens treated in the way the Chinese workers are treated.

However, if Apple really wants to be a respected brand then it needs to put its foot down and demand its outsourced manufacturers improve worker safety. Unfortunately, because Apple makes so much money, the financial world and the average consumer consider Apple the most respected company on the planet. I no longer think so.

Apple has known about the abuses for the last 4 years. Intel can make a chip without having a factory explode on them leaving injured and dead workers; why can’t Apple? Wall Street obviously has no problems making blood money otherwise they would have been demanding the abuses be stopped.

Remember, Chinese labor working on US railroads in the 19th Century? Cheap labor and a lot of them killed as a result of unsafe labor practices and other horrendous acts.

Apple can force all of its manufacturers to comply with the most rigorous safety practices in the world; if it wanted to. Yes, the company’s profit would be lower or it can simply charge more for their products. Then there could be another issue; very companies can tell the Chinese government what to do in terms of establishing safety requirements. Maybe Apple has no influence? Nah, Apple actually does have the influence it just chooses not to exercise it.

Here is a suggestion to Apple: move the manufacturing to another country that needs employment as much as China does. I am sure Mexico, Germany, Japan, India, Viet Nam, and the United States would not only benefit from having Apple spend billions in those countries but also they would manufacture Apple products safely. However, I cannot say any manufacturer in those countries would do it less expensively than China. So - Apple what will it be? Make money under safe working conditions or make money leaving a trail of bodies along the way?

Check out the discussion running below. Also check out the links above. Mike Daisey, who is not a reporter, has a one-man show running about Apple and Steve Jobs and he discusses the labor abuses he has found. Bear in mind he characterizes himself as a story teller and not a reporter.

People care more about their iPhone than the working conditions in China. A tragedy.

Maybe protesters ought to boycott Apple products.

KKR & China - Water & Wastewater - The New Gold/Hidden Treasure?

PJLouis — Fri, 05 Aug 2011 22:28:38 GMT

http://www.ft.com/cms/s/0/1aa23b40-bc2e-11e0-80e0-00144feabdc0.html#axzz1UByejzkc

It looks like KKR has made significant inroads in the water treatment and by association the wastewater markets in China.

Water and waste are the new gold. Bottom line, clean water is big business.

Given the nature of the industry, it made sense for KKR to do the deal through convertible bonds. KKR gets all the safety of cash flow from the coupons while being able to get the upside of growth by converting to common stock.

Smart.

Given all of the attention KKR is giving the Green sector, the attention ought be giving some PE firms ideas about clean water here and abroad. The mere fact that a telecom/technology/media professional, like myself, is even paying attention to this is amazing.

With all of the various environmental efforts like Green energy and recycling reduction, water and waste have been largely ignored. It goes without saying clean water is a global problem. The problem with “global” statements like that is they are not specific. I will be specific; clean water is not only a problem in China but also in the United States. The problem is huge in China and it is a growing problem in the United States.

I may not be an environmental engineer but I have been reviewing “green” businesses, in particular water and wastewater related businesses for the last 12 years. All of the technologies that are being promoted by companies have been around in various states of development for years. Commercializing those technologies, like low power desalinization technology, is the challenge.

China is one big investment opportunity especially in the area of basic infrastructure.

KKR’s actions are right on target. Hopefully KKR's actions begin to light a fire under investors and money begins to flow more heavily into Green startups. I say that because I believe Green startups and projects are the new GOLD or maybe hidden treasures. When I first started reviewing Green businesses in the composting and biodegradable sectors I began viewing the sectors as hidden treasures. For one company I had been involved with my catch phrase was "your garbage is our treasure"; not exactly Shakespeare but it spoke volumes about the company.

Proctor & Gamble – The Price of Progress – The Web equals Layoffs – Thank You Facebook

PJLouis — Wed, 08 Feb 2012 11:44:38 GMT

http://www.businessinsider.com/pg-ceo-to-lay-off-1600-after-discovering-its-free-to-advertise-on-facebook-and-google-2012-1

I will be the first to say Facebook appears to have done a successful job in building a large enough and diverse enough customer base that it has effectively created the perfect mass market advertising customer pool.

It is difficult to criticize P&G’s CEO, Robert McDonald. I think P&G’s timing is perfect. Could McDonald have implemented this strategy last year? Maybe. But at least he did something.

P&G is a juggernaut consumer products company and hence I am less inclined to pound P&G’s lateness to the web. Besides, at least they got the Old Spice campaign right.

I think the challenge for many consumer products companies as it relates to the web has been that cross over in the use of the web. The web as a business and marketing tool has been morphing over the last 15 years. It has gone from the GEEK world to the business world (B2B, enterprise, wholesale, non-retail, etc.) and now to the consumer space. Over the last 15 years the Internet has matured as a commercial tool. Like all marketing and advertising, retail businesses target certain demographics to sell to. The broadest group is one that is typically called the mass market; basically includes all age groups and all ethnic groups. If you are going to use a brand new advertising venue, you should use it on a younger population rather than an older population. Let us face facts the younger generation will have the greatest tendency to use new information technology than an older generation.

Over the last 15 years the customers P&G had considered to be young children and teens have grown up with the Internet and have been exposed to the Internet for more than half their lives. Hence, P&G’s timing is right. The customers who buy the largest percentage of high ticket items are now adults and these adults will be using the very media platforms P&G is hoping to leverage for marketing purposes.

I have always found the consumer space to be infinitely more challenging than the wholesale space. It’s easy to criticize McDonald. However, I believe the Old Spice campaign ought to be considered P&G’s grand experiment in monetizing the web.

The loss of jobs is the price of progress. It is an unfortunate reality but a necessary one.

Now on to business. What does Proctor & Gamble plan on doing with the Internet? It can use it to not only promote but also sell. However, will proctor and gamble risk its relationships with major retail outlets and supermarkets to sell products on their own via the web? There has to be some details to the company’s Internet plans.

Groupon’s Troubles Just Keep Piling On – Maybe Groupon is Nothing More than a Giant Penny Saver - Comments Update

PJLouis — Thu, 18 Aug 2011 16:58:28 GMT

http://www.businessinsider.com/groupon-low-on-cash-2011-8

Groupon is suffering from three problems:

1. Negative Working Capital
2. Competition
3. Low Barrier to Market Entry

The company’s available cash is not as great as one may think. A massive portion of what it collects on the sale of discount coupons has to be eventually paid out to merchants.

Competition is eating away at Groupon’s take of each voucher/coupon. Instead of taking 50% of each voucher, Groupon will be taking less as time goes by. This means it will be generating even less revenue for itself.

The barrier to entry is low. There are a ton of competitors now. Competition is springing up everyday. Even worse there are national, international, and local competitors of Groupon.

Groupon’s business is a cash flow business, where the value in the company is not in the assets but in the actual cash flowing through the company and the float it can sustain. Groupon’s business model works it just is a low margin business.

I do not blame the early investors in the company. Those investors had a right to take their cash early because I am sure they understood the company is really not an Internet company but a giant penny saver. By the way there is nothing wrong with penny savers, they are low margin businesses that require a lot of hard work

Groupon is looking at eroding revenue because of growing competition. Even if Groupon continues to grow in the number of merchants it is working with, the reality is that the merchants are not sticky customers. The merchants can go to any coupon company that is willing to give the merchants a bigger piece of the action.

The discount coupon business is and always will be a low margin business. Is there value in Groupon? I think there is value in the discount coupon business; however, my margin needs are not as high as most investors.

Yahoo – Bostock agrees to Step Down - Update

PJLouis — Wed, 08 Feb 2012 02:45:39 GMT

http://online.wsj.com/article/SB10001424052970204136404577209440958658740.html?mod=WSJ_Tech_LEADTop

About time.

Bostock and three other directors will be stepping down sometime this year. The sooner, the better.

The story now is that Bostock and the three other directors will not seek re-election on the board. Therefore rather than simply resigning now, the 4 board members will simply fade away.

The board has already brought on board two new board members; Alfred Amoroso, former chief executive of Rovi Corp., which creates digital guides for TV listings, and Maynard Webb Jr., former chief operating officer of auction site eBay Inc. and currently the chairman of call-center provider LiveOps Inc.

These new board members might actually help the company. Yahoo has already stated that it will be seeking additional new board members.

It makes sense that Bostock's successor be one of the new board members. The old guard cannot take the position of Chairman of the Board; the message an action like that will send to Yahoo shareholders would be bad. Therefore the new Chairman must be one of the new board members.

Since 2008, Yahoo has been the poster child for ZERO Corporate Governance and ZERO Accountability to Shareholders.

It is now apparent that the Yahoo board is now taking its shareholders’ demands seriously.

Now the question remains: What is Yahoo’s turnaround plan? Getting rid of dead wood and brining on board new people is a nice thing but it is not enough.

What is Yahoo's turnaround plan?

Facebook’s Russian Friend – Yuri Milner

PJLouis — Mon, 06 Feb 2012 05:21:52 GMT

http://online.wsj.com/article/SB10001424052970203889904577201330085961516.html?mod=WSJ_Tech_LEFTTopNews

All I can say is that I thought the angel all but disappeared. More to the point I thought the big time angel investors disappeared. This is a good news story.

Frankly, Yuri Milner’s restrictions are minor. He stands to make a fortune. The fact that he has agreed to the restrictions makes the Facebook IPO look even more appealing. By the way I am assuming Milner understood his actions. This restriction not only helps Facebook deal with the perception that it could sway the price of a stock but also helps attract new investors as well.

Milner obviously has made several smart bets.

Facebook owes Milner. My suggestion to Milner is that if he has any influence at all then he needs to make sure that Facebook’s IPO is not treated the same way as Groupon’s IPO was treated. I suggest that Facebook be transparent. Unfortunately with Goldman Sachs in the mix I am not quite sure how transparent Facebook will be.

The level of negative scrutiny Groupon received was about withholding negative information. Once it became known that Groupon’s expenses were larger than originally believed and that the founders and early investors cashed out early, well things went straight downhill. The news was not bad but it was not good. However, Groupon kept it secret. Remember the adage: “it is not the crime that gets you the time but the cover-up will get you put away for a long time”.

Facebook – IPO – Comments

PJLouis — Sat, 04 Feb 2012 13:41:13 GMT

http://online.wsj.com/article/SB10001424052970204879004577110780078310366.html?mod=WSJ_hp_LEFTTopStories

http://money.msn.com/investment-advice/latest-4.aspx?post=0a25d312-9521-45d9-8d8d-e3d8fdf4cca0

The Facebook IPO story is moving faster than I expected. I should not be surprised. The company is seeking to raise $5 Billion to $10 Billion in its raise. I actually think it is reasonable; given the company’s revenue of $3.71 Billion last year. Despite disappointment from analysts who have complained the company’s 2011 revenue actuals is lower than hoped for, I still think it is a respectable number.

The site is becoming more and more popular. The company sells both advertising and fee based services. The company is being managed by grownups. I still think a $5B raise on an IPO is reasonable but not for a valuation of $75B to $100B. The multiple is outrageous. How in the world did they calculate the valuation? I know most analysts will point to a comparable; meaning the last company that received an outrageous valuation. Setting corporate valuation is both math and art.

As has been pointed out to me, the analysts are now pushing for a valuation of $75 Billion to $100 Billion. Now that is just plain nuts. The $100 Billion valuation appears to have been based on Google’s IPO. However, Google launched at a different time when the Internet was recovering from the crash and there were no other competitors and no stories about Madoff. In other words, investors were less intelligent and more naive than they are today.

I was hoping Zukerberg would have better control of his bankers but I fear these are the same types of yahoos who managed Groupon’s IPO. Come to think of it I think Goldman Sachs I sin the mix.

Does this have the same chance of being another Groupon? I hope not.

Unlike Groupon, Facebook has a brand name. When Groupon’s IPO was launched the company had very little history behind it and frankly its expenses were out of control. There was so much more wrong with Groupon.

Of course the bad news is that Facebook’s expenses are now growing faster than its revenue. However, that is not new or bad for a company that is transitioning.

My fear for Facebook is that the bankers will position it so that the company’s valuation will be absolutely outrageous; resulting in another Groupon-type of IPO.

I like Zuckerberg’s attitude towards the business side of Facebook. It is a healthy approach to staying centered in the midst of an IPO tornado.

I need to think about this more.

Canon – No Line of Succession? What Not to Do?

PJLouis — Tue, 31 Jan 2012 01:56:00 GMT

http://online.wsj.com/article/SB10001424052970204652904577192132163888756.html?mod=rss_Technology&utm_source=twitterfeed&utm_medium=twitter

Are they kidding? Am I hearing this correctly, Cannon does not have a standing plan for line of succession? Holy smokes! Yikes!

If you plan on promoting people within, the process is one that takes time. You don’t just simply and suddenly find a suitable group of executives. Companies are supposed to train the next generations of executives over a period of years.

You know what Cannon ought to be afraid of is picking someone based on age. The biggest mistake to make is to select an executive based on him being the oldest in the bunch. If the Japanese actually selected qualified managers based on age, they would be committing a massive error.

How in the world do you not have a succession plan in place? Even most large American companies have something that approximates a succession plan for management teams. I just realized that Canon is a ripe target for a turnaround expert.

Canon should consider hiring outside consultants to assist them.

Apple becomes the largest Smartphone Vendor

gdt — Sat, 28 Jan 2012 02:07:22 GMT

According to the latest report from Strategy Analytics, Apple has now overtaken Samsung to become the world’s largest smartphone vendor by volume. Apple achieved 23.9% market share during Q4 2011, narrowly beating out Samsung’s 23.5% share.

RIM’s CEO – A Few Thoughts – He has Already Made One Big Mistake

PJLouis — Fri, 27 Jan 2012 21:20:00 GMT

http://www.wirelessweek.com/News/2012/01/RIM-CEO-Heins-Clarifies-Stance-on-Change-Devices/

http://www.reuters.com/article/2012/01/23/us-rim-idUSTRE80M04920120123?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29

When I first started writing this posting Thorsten Heins had not clarified his statements.

I was like so many, dismayed by Heins comments. However, I had decided to cut him some slack.

On the surface you could have taken Thorsten Heins’ earlier comments as either being disconnected from reality and investors or you can take Heins’ comments as being cautious.

People need to keep in mind that Heins has employees to think of. When a new CEO comes in and says there will be drastic change the first that happens is that employees panic and run for the doors. Of course the company has already lost a lot of very solid employees, which implies there may not be enough of the right kind of talent left to actually propel the company forward.

Bottom line Heins needs to generate a sense of change, a sense of stability, a sense of confidence, and a sense he has everything under control. He has a big job ahead of himself. One tactic Heins could have taken when he stepped out into the spotlight is he could have proclaimed a plan of change, while simultaneously proclaiming how the team will need to stay together to get the job done. That is what he finally sort of did by stating he wants change but nothing seismic. I actually understand what he means. His new comments fall into line with what I initially believed.

As for the company having a lot of cash sitting around. That is a nice cushion to have around but that does not guarantee success. Heins’ predecessors had the same pile of cash and they did everything wrong.

What people need to worry about is that Heins may be pretty much like his predecessors. Folks need to keep in mind that when Heins was hired Balsillie and Lazaridis were firmly in charge. What I am saying is managers procreate versions of themselves; hire and promote people like themselves.

There are a few things Heins can do right now and all at once:

• Stick to whatever plan he has in terms of deploying the BB 10
• Shop the company around to be bought
• Look to acquire someone that can transform the company’s culture and product line
• Get on his hands and knees and beg the applications development community to come in and work with RIM. I suggest he turn the Blackberry operating system in an open platform.
• Develop strategic alliances with other handset and software companies right now.

Why bother going through all of that trouble? The answer is: Heins has to hedge his bets and run through a bunch of parallel paths. It is like throwing a bunch of ideas against the wall to see which will stick. By the way he also has to run the company, hence the need to continue work on BB 10.

In regards to opening up the platform, RIM is not BlackBerry; there are no young cool developers and customers out there that worship the company. The cult of personality of Blackberry existed with guys like me 10 years ago when we were (sort of) young business professionals but now I am not that young audience that products companies target.

Since Heins plans on promoting the BB 10 as key component of his plan to save RIM, I would start looking for a turnaround expert to help with the implementation.

Now here is my real problem with Heins. He has already made his first mistake as CEO. The mistake being: he did not communicate what he really meant. Tiny error? Absolutely not. One of the key things a CEO must do is: communicate with his/her shareholders. He did a pretty poor job of that Day One. Communicating is a critical skill necessary to run a company. If he cannot say what he means, then heaven help the shareholders. RIM needs to hire Heins a better publicist.

I give Heins 15 months, tops. By the end of the 3rd or 4th quarter of his tenure we will all know if he is going to be successful or not.

Why Apple outsources the iPhone - COMMENTS

gdt — Sun, 22 Jan 2012 22:12:41 GMT

It's not just about money ... The original article came from the NYTimes http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&ref=technology but there is a good analysis also at businessinsider.com. The real reasons Apple makes iPhones in China, therefore, are as follows: Most of the components of iPhones and iPads — the supply chain — are now manufactured in China, so assembling the phones half-a-world away would create huge logistical challenges. It would also reduce flexibility — the ability to switch easily from one component supplier or manufacturer to another. China's factories are now far bigger and more nimble than those in the United States. They can hire (and fire) tens of thousands of workers practically overnight. Because so many of the workers live on-site, they can also press them into service at a moment's notice. And they can change production practices and speeds extremely rapidly. China now has a far bigger supply of appropriately-qualified engineers than the U.S. does — folks with the technical skills necessary to build complex gadgets but not so credentialed that they cost too much. And, lastly, China's workforce is much hungrier and more frugal than many of their counterparts in the United States.

Reaction to Google's Privacy Changes Hitting the Web

gdt — Thu, 26 Jan 2012 01:16:29 GMT

Google is planning to use content from all there offered services to begin targeting you with Ads. This new Privacy policy change now include private information on Android devices as will as private emails in gmail. Security researcher Matt Blaze offered his own interpretation of Google's announcement on Twitter: "'Be Evil' is a simplified and easier to understand version of 'Don't be Evil.'"

RIM – co-CEOs Leave - Comments

PJLouis — Mon, 23 Jan 2012 05:10:58 GMT

http://www.bloomberg.com/news/2012-01-23/rim-replaces-ceos-as-it-struggles-to-answer-apple.html

RIM’s co-Chief Executive Officers Jim Balsillie and Mike Lazaridis have stepped down. Thorsten Heins, RIM’s chief operating officer who joined RIM four years ago from Siemens AG, will replace the pair in the CEO post effective immediately

According to the RIM board, Balsillie and Lazaridis stepped down on their own and not a response from outside pressure. Total nonsense; it had to be outside pressure or was this the biggest coincidence you could imagine?

Stock is crashing to earth like a meteor. The company has no plans on how to respond to either the Android and iPhone and these two co-CEOs just decide it was time to step down. I wish the RIM board would leave now. The RIM board is just as responsible for this mess as Balsillie and Lazaridis were. Lying about why the two co-CEOs does nothing but protect the feelings of two individuals who have caused thousands of people and I am sure pension funds as well to lose millions in value at a time when regular folks cannot afford to lose a dime. It is insulting.

Now it is time for the board to leave. The board just does not get it; they work for the shareholders.

Solar Cells in Smartphone Screens – Nice!!

PJLouis — Sat, 21 Jan 2012 23:54:44 GMT

http://spectrum.ieee.org/consumer-electronics/portable-devices/solar-cells-in-smartphone-screens/?utm_source=techalert&utm_medium=email&utm_campaign=011912

Using the screen as a charging surface is clever. Thin film technology has certainly come a long way from 10 years ago.

Using solar energy to charge a phone is not new. For those who do a lot of backpacking/camping in the woods there are portable devices that convert solar energy into electricity to charge your cell phone. The neat thing about this technology is that it is built into the screen using state of the art thin-film technology plus capacitor technology plus transistor technology. The screen is the largest real estate on the handset. Makes sense to use the display screen. Very nice.

There is work underway using induction coils to generate an electrical charge, which could then be used to charge a cell phone.

A lot can go wrong between development and commercialization. This is something to keep an eye on.

Skype to be an integrated feature on Microsoft Windows Phone? COMMENTS

gdt — Tue, 17 Jan 2012 01:23:53 GMT

Skype as an integrated feature in a MS Windows phone is actually a feature that gives this phone a one up on the Apple iPhone. I would have thought Google would have done a better job of integrating VoIP in to the Android OS, but to see this from Microsoft - who would have guessed!

Rumors of a RIM sale?

gdt — Wed, 18 Jan 2012 17:21:50 GMT

As you would imagine there are rumors circulating on the web that RIM is shopping around for a buyer. This article has a different twist: But RIM may not be preparing to sell the company in full: on January 4, Barron's quoted an analyst from Jefferies and Co. as saying that RIM had agreed to license its BlackBerry OS to "Samsung, HTC, and possibly others." BlackBerry sales are increasing outside the U.S. - so a good move for Samsung or HTC?

Jerry Yang - RESIGNS From YAHOO !!!

PJLouis — Tue, 17 Jan 2012 23:03:59 GMT

http://money.msn.com/investing/news.aspx?feed=AP&date=20120117&id=14700951

Jerry Yang has resigned form Yahoo. He has also given up his title of Chief Yahoo.

Yang is also stepping down from the boards of China's Alibaba Group and Yahoo Japan. Yahoo is negotiating to sell its stakes in both companies.

Predicting Tablets will replace laptops

gdt — Tue, 10 Jan 2012 22:14:04 GMT

"A full 46% of Americans think tablets will replace laptops in the future, according to a poll of 1,155 American adults." Just think about what this will do the need for more and more bandwidth on wireless networks. With Applications like Facetime, iMessage, Skype, etc. The carriers will continue to see declining voice usage on their networks and through the roof data usage.

LightSquared's LTE interference issues deemed real by nine government agencies.

gdt — Sun, 15 Jan 2012 01:19:49 GMT

Nine agencies making up the National Space-Based Positioning, Navigation and Timing Executive Committee (PNT ExComm) all agreed that the problems are real and any attempts at mitigation are futile. http://www.computerworld.com/s/article/9223447/Federal_body_concludes_LightSquared_can_t_work_with_GPS

AT&T – The Network is Performing Very Well – But Still Facing an Uphill Battle

PJLouis — Mon, 09 Jan 2012 19:05:01 GMT

http://money.cnn.com/2012/01/09/technology/att_network_gets_better/

According to industry experts, AT&T’s wireless network is outperforming expectations. Better yet it is meeting customer network needs, not necessarily perceptions.

Unfortunately for AT&T, its own customers have been bashing the carrier. The customer dissatisfaction is the result of past sins, genuine concerns from the customers, bad press over the handling of the T-Mobile disaster.

Bottom line, we are seeing an example of where perception is reality. Despite the fact the network is genuinely performing better, well in fact, the customer does not think so.

I have been impressed with AT&T’s network performance. I have not done any formal network testing. I have been using AT&T cell phones and have been impressed with the speed and level of interactivity.

The challenge for any retail operation is trying to convince the customer they are wrong without sending them into a rage. Remember never ever tell the customer they are wrong; just shut your mouth and make the customer happy. Customers don’t need a whole lot to set them off. Customers expect premium service and rightfully so, service providers make their money off of customers.

AT&T needs to spend the money on a PR campaign convincing customers the company has improved. Just remember, AT&T is not trying to convince the customers they are wrong. Customers don’t like being told they are wrong they just want the provider to serve without the provider complaining about them.

Of course fearing the customer is correct. My advice to AT&T is to determine when the survey was done versus when the network improvements started taking hold. This could be a simple matter of timing. Customers have long memories and simply cannot just forget service problems.

So what we know is this: AT&T’s network is performing well, excellently in fact. Customers are bashing AT&T over quality.

Stankey has it right; the company has made progress but its work is not over. Just never say the customer is wrong.

Being a service provider is not easy.

Groupon – Sinking Faster and Faster - May Become its Own Low Cost Deal?

PJLouis — Sun, 08 Jan 2012 04:41:58 GMT

http://www.bloomberg.com/news/2012-01-04/groupon-s-drop-reflects-daily-deal-risks.html

At the rate Groupon’s stock price is crashing and more information about the pitfalls of its business model become public, Groupon will soon become its own daily deal. Someone will end up buying it up CHEAP as a going concern.

The problem with buying a company like Groupon is that it’s only value lie in the short term contracts and the non-sticky customers.

To merchants, the brand name is not key to their survival. Despite the bad economy there are emerging local daily deal businesses popping up. Competition is coming on strong.

Have you heard of Restaurant.com or OpenTable? Restaurant.com vouchers do not expire. OpenTable has pretty good deals with 30% discounts.

I do not intend this to be an ad for other companies. The point I am making is that there are plenty of solid daily deal sites. Further there are more local and regional daily deal sites opening up all the time.

Groupon’s costs are going to continue to escalate. What will this company be worth next year?

The company would have been in better shape if the early investors and Groupon’s CEO had not cashed out early – makes you wonder what they have not told the investment community.

Tech bloggers seem to like the new Microsoft Windows Phone

gdt — Mon, 09 Jan 2012 18:23:57 GMT

The tech blogger community seems to be giving generally positive reviews of the New Microsoft Phone from Nokia. It will be interesting to see if the consumer thinks the same thing. 1. Windows Phone Has A Totally Unique UI 2. Originality Means Fewer Forays Into The Patent Wars 3. Uniformity Across All Devices and Carriers 4. Zune Is Baked Right Into the Operating System 5. Xbox Live Gaming Support

Clearwire – Candidate for Bankruptcy? A Couple of More Thoughts and a New Comment About T-Mobile

PJLouis — Mon, 21 Nov 2011 23:54:39 GMT

http://online.wsj.com/article/SB10001424052970203611404577046304160608704.html?mod=technology_newsreel

Ouch! Clearwire’s future appears to be cloudy. I was a big supporter of Clearwire’s efforts. I still like the company. However, the company appears to be facing tough times ahead.

Regardless of the company’s business plan and objectives, Clearwire does not appear to have the cash to last. Clearwire needs additional capital, which it cannot raise without help from the outside. The company does not have the resources to raise the money from within its own revenue stream. It can go back to its owners and ask for a cash infusion but to what end? None of this is good news. However, what is good news is that the company has a 30-day breathing spell. Do not get me wrong this is still a problem but in a distress situation you are grateful for any time you can get.

I am not sure what new service deals will do for Clearwire because those deals need to translate into instant cash.

Should Sprint use its own cash to save Clearwire? The answer is that this depends on Sprint’s strategy. Sprint could try to pick up Clearwire for a song. However, that is not fair to current shareholders of Clearwire. Now, if Sprint decides not to help at this moment, Clearwire could be picked up out of bankruptcy real cheap by Sprint. Of course the overall emotional and operational damage a bankruptcy can cause to a company may render Clearwire barely functional. In the event of a bankruptcy a bankruptcy judge could keep Sprint from even putting in a bid for Clearwire.

An alternative for a bankruptcy is Sprint buying Cleawire. However, this does not mean that Sprint gets Clearwire cheap. Here are the challenges facing Clearwire and all of its shareholders. All of the shareholders are entitled to a fair return. However, we cannot assume the shareholders have the cash or even the support of their respective stockholders to put a bid in for Clearwire.

Clearwire’s plan to be a wholesaler for the wireless industry has potential. Can Clearwire’s plan help save the company?

Does Sprint have the cash to even consider a purchase of Clearwire? Would Sprint even be able to raise the cash for such a purchase? What about a Sprint-Comcast alliance to purchase Clearwire at fair value without having to bankrupt Cleawire?

At this time I have no clear idea what Clearwire should do. I need to ponder this entire situation. There is a lot to consider. Bankruptcy solves a lot of problems but it also leaves equity holders high and dry.

With AT&T in a pitched battle with the FCC and the DoJ wouldn't Deutsche Telekom welcome an offer from Sprint?

Yahoo’s New CEO – Talks the Talk - But can he Walk the Talk? - Comments

PJLouis — Sat, 07 Jan 2012 22:21:43 GMT

http://online.wsj.com/article/SB10001424052970204331304577143151032301964.html?mod=WSJ_Tech_LEFTTopNews

Yahoo’s new CEO, Scott Thompson has had his company meeting and told all of Yahoo’s employees that Yahoo needs to be “world class” and that Yahoo will fund innovation.

He did not say anything that was not expected.

The question now is will he be able to move the company in a direction that is profitable. The challenges Mr. Thompson faces are massive:
• A board that is accountable for the mess the company is in and still will not take responsibility for the mess the company is in.
• A board that has a founder who I believe is conflicted with Yahoo. Read past postings.
• A board that has a history of making very bad decisions

If Thompson disagrees with Jerry Yang, I am fairly certain Yang wins and Thompson loses the argument. Same thing goes for any disagreement between Thompson and Yahoo Chairman Roy Bostock.

The fact that Thompson is a technologist without turnaround experience is just icing on the cake. In other words, it makes you wonder why Bostock and Yang even selected him. I guess they wanted someone who would do what he is told to do.

The fact that Thompson is on the board is meaningless. The true test is whether or not Roy Bostock and Jerry Yang listen to him and fully embrace Thompson’s ideas and opinions. My best guess is no to both.

The reality is Thompson will likely not be able to achieve anything positive with the existing board.

This company is beginning to look a lot like RIM. The company is not only an example of management failure but also an example of disastrous corporate governance.

Corporate Governance – RIM a Travesty of Corporate Governance – Happy New Year RIM Shareholders-UPDATE

PJLouis — Sun, 01 Jan 2012 19:17:48 GMT

http://online.wsj.com/article/SB10001424052970203686204577116751785671184.html?KEYWORDS=rim

Finally, after a disastrous two years (going on 3 years) under the helm of two dysfunctional co-CEOs and co-chairmen, the Wall Street analysts are finally asking questions of the board of directors.

Where is the board of directors? I have been asking that same question.

Corporate governance is more than just a once a month meeting to hang out with old friends. Corporate governance is about accountability in the company; accountability to shareholders (especially).

Boards of directors do not work for the company, they work for the shareholders. Yes, technically the boards also report to the board chairmen but in reality they all work for the shareholders. When the C-Suite and board room forgets who they really work for then it is time to remove all of the C-level executives and members of the board.

This is no joke. Do I have to remind everyone of Enron and WorldCom? Do I have to remind everyone of the tens of thousands of people who lost everything they had because of Ken Lay and Bernie Ebbers?

We are looking at billions of dollars of value lost by a pack of incompetent boobs who have wasted the last two plus years, not year as suggested by the Wall Street Journal, doing absolutely everything two equally incompetent and disastrous co-CEOs and Chairmen have wanted without question or pushback. If the board has been fighting Jim Balsillie and Mike Lazaridis it has not been obvious.

RIM’s board of directors includes some highly credentialed people. Where are they?

The lack of action on the part of the board of directors warrants an investigation into the company’s operation now. Why in the world would a board of directors allow such behavior to continue unless it is completely incompetent? An investigation would place the entire company under a magnifying glass and the finally shareholders will have visibility into how the company actually makes decisions.

The company boasts having of stature and credibility on its board of directors. Some of those folks are:
• John Richardson
• Barbara Stymiest
• Roger Martin

Stymiest was the former chief executive of the Toronto Stock Exchange. John Richardson is a retired insurance executive. Roger Martin is a university dean and authored an acclaimed book on corporate governance.

Do you think that people of such stature would have more on the ball? Do you think people of such credibility would know that they look like a joke? Do you think people of such experience would actually know what their jobs were and what they are accountable for?

Shareholders have lost billions in value. RIM can try blaming the iPhone and the Android but frankly that would be a disservice to all of the hardworking staff level employees of RIM. The reality is that RIM’s leadership has failed to act and has done so for nearly 3 years.

For some unfathomable reason, the shareholders have allowed the board of directors and co-CEOs Jim Balsillie and Mike Lazaridis to continue in their roles. It is time for all of them to leave now.

Happy New Year RIM shareholders – you are starting off the New Year with a bang. Happy New Year RIM board, Jim Balsillie, and Mike Lazaridis you have pulled off the greatest con since Enron and WorldCom. You have everyone convinced you are looking out for their life savings even while the stock crashes.

As of January 7, 2012, the rumor is that Stymiest will get the top spot.

Yahoo Names New CEO

PJLouis — Wed, 04 Jan 2012 15:00:53 GMT

http://www.msnbc.msn.com/id/45869902/ns/business-us_business/t/yahoo-names-paypal-exec-ceo/

The AP has reported that Yahoo Inc. has named Scott Thompson, president of eBay Inc.'s PayPal division, as its new CEO.

Interesting choice.

Let me think this one over.