It seems like Apple can do no wrong these days, but according to Electronic Arts founder Trip Hawkins, Apple is headed toward a decline. It goes without saying that Apple will not be able to maintain its dominance forever — every company that rises will eventually fall — but Hawkins sees Apple’s decline as beginning relatively soon. “The thing is, it may take another year or two before it starts to decline, but it has to – everything does,” Hawkins told IndustryGamers in an interview. “Everything revolves so much around Steve, and no matter how good his lieutenants are, they’re not Steve. None of us is going to live forever, though I hope he lives for a really long time.” Hawkins went on to note that games made by Digital Chocolate, the mobile game lab he left EA to launch, will “always be in the App Store,” though he says it would be great if Apple were more open. “I think it would be an incredibly positive thing for the industry if Apple decided to support all of the web standards, because then Apple could be the best about everything. Right now they make a conscious choice. They want you to be in the App Store rather than the browser, so they cripple the browser,” Hawkins griped, though he noted that the closed model hasn’t had a negative impact on Apple’s iOS business at this point. More →
Sony Ericsson on Friday posted a net loss of €50 million in the second quarter of 2011, blaming supply constraints resulting from devastating earthquakes that shook Japan earlier this year for the difficult quarter. The steep loss was not expected by the Street, and it is down from a profit of €12 million in the second quarter of 2010 and €11 million last quarter. Sony Ericsson’s shipments fell 31% from the same quarter last year to just 7.6 million units, while analysts expected shipments ranging from 8 million to 11 million handsets. Revenue for the quarter totalled €1.19 billion, down from €1.76 billion in the same quarter a year prior. “Sony Ericsson’s second quarter profitability was affected by the March 11 earthquake in Japan. We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most of the effect in the early part of the quarter,” said Sony Ericsson President and CEO Bert Nordberg in a statement. “Our shift to Android-based smartphones continues with smartphone sales accounting for more than 70 percent of our total sales during the quarter. We have shipped more than 16 million Xperia smartphones to date. We have introduced eight new Xperia smartphones this year and we continue to see strong consumer and operator demand across the Xperia smartphone portfolio.” The struggling phone vendor did say it expects business to improve in the second half of 2011, and it forecasts modest industry growth for the full year. Sony Ericsson said is share of the global Android smartphone market during the second quarter roughly 11%. The company’s full press release follows below. More →
Last week, Samsung announced that it will combine its LCD and semiconductor businesses. The move is expected to conceal poor LCD sales, but the head of the new combined business, Kwon Oh-hyun, has said that he expects the overall performance to falter during the second half of the year. “In the past, the semiconductor market tended to be weaker in the first half and stronger in the second half, but for this year, it is likely to remain flat throughout the latter half,” Kwon said according to The Wall Street Journal. Samsung typically sees 70% of its operating profits and 44% of its revenues from the combined sales of its semiconductor and LCD products. The South Korean firm is currently locked up in multiple legal battles with Apple — the largest buyer of its LCD products — and rumor has it the Cupertino-based firm is considering dropping Samsung as a supplier.
Shares of RIM stock have taken a beating since the company announced devastating first-quarter earnings last Thursday. The Waterloo, Ontario-based BlackBerry maker missed Wall Street’s first-quarter consensus, it lowered its full-year guidance, it announced workforce reductions, it confirmed product delays and investors went running for the door as did a top executive. Since the earnings release last week, RIM’s stock has fallen more than 25%. This is bad news for every RIM investor, but two in particular must be especially upset. RIM Co-CEOs Mike Lazaridis and Jim Balsillie collectively own more than 10% of the company, a stake that helped each man achieve billionaire status. Last year, Lazaridis was ranked the world’s 651st richest man by Forbes with a net worth of $1.9 billion, and Balsillie was No. 692 on the list with a net worth of $1.8 billion. Fast forward to today, and neither man can call himself a billionaire any longer. The cheifs’ stake in the company is still worth more than $1 billion combined, but separately, their net worths are now just roughly $800 million a piece. We doubt the employees set to be laid off in the coming weeks and months will shed any tears for the Co-CEOs’ loss, but it’s just another piece of a puzzle that continues to fall apart. Some analysts believe RIM is hardly out for the count, however, and we agree that the company has a bit of fight left in it. If Balsillie and Lazaridis hope to rejoin the billionaire club, it’s time to put those gloves on and start swinging. More →
Sales of video game consoles in the U.S. hit a five-year low last month according to new data from research firm NPD Group. “May 2011 was the lowest month of sales for the industry since October 2006,” NPD analyst Anita Frazier said in a statement. “A light slate of new releases is at the heart of this month’s performance.” Combined sales of hardware, software and accessories totalled $743 million according to the firm, representing a 14% decline compared to May 2010. Software sales were down 21% from the same month a year prior to $400 million. Microsoft managed to combat the trend — and keep total console sales in May from sliding to unheard-of lows — having sold 270,000 Xbox 360 consoles, up 39% year-over-year. Take-Two Interactive’s L.A. Noire was the top-selling software title for the month. More →
An explosion at Foxconn’s iPad manufacturing plant in Chengdu, China last month had a negative impact on the company’s business in May despite initial assurances to the contrary. Foxconn’s revenue last month dipped 2.14% sequentially to NT$200.56 billion, or approximately US$6.95 billion, following production halts tied to the fatal explosion that killed three workers and injured at least 15 more. The tragic accident, caused by the ignition of flammable aluminum dust in a parts polishing workshop, is thought to have cut iPad 2 production by as many as 500,000 units. Foxconn’s revenue in May was still up 23% compared to the same month last year. More →
Acer believes there’s still consumer interest in netbooks despite the surging tablet market, and the firm recently said that it’s not giving up on the mini notebooks just yet. “Tablets have impacted overall netbook sales, but we’re not stepping away from the [netbook] segment,”Acer’s senior product marketing and brand manager, Eric Ackerson, told Forbes. “We think there’s still opportunity for sales, including in the U.S.” Acer’s not ignoring the tablet market — its Acer Iconia Tab A500 recently launched in the United States — but it also has some new netbooks up it sleeves that are expected to launch later this summer. The firm believes that netbooks, which are typically priced far below tablets, are beginning to offer an experience that’s on a par with notebooks thanks to bumps in hardware specs. “The death of netbooks is overstated,” Lisa Emard, an Acer spokesperson said. “We may not see the same explosive growth as before, but the netbook price point is still killer,” she added. More →
According to an unconfirmed report, Motorola is set to curtail production of its XOOM tablet beginning in April and production will cease after June. Industry watcher DigiTimes cites anonymous sources from within component suppliers in claiming that XOOM production in the first quarter of 2011 met forecasts of between 700,000 and 800,000 units. Motorola’s manufacturing partners are expected to ship between 400,000 and 500,000 units in March, and then April production will drop to 300,000 tablets. May’s production will reportedly dip further still and DigiTimes claims Motorola will stop building the XOOM at the end of June. The cause of the alleged drop in production is unclear, though the website’s sources speculate that Motorola may be uncertain about its position in the tablet market and will therefore slow production. They also speculate that Motorola may instead launch a new version of its XOOM tablet, which is the more likely scenario considering Motorola Mobility CEO Sanjay Jha’s previous comments with regard to the tablet market. Total XOOM shipments in 2011 are expected to be 3-5 million units, the report states.
UPDATE: Following the publication of this post, Motorola supplied BGR with a comment via email. The company states that DigiTimes’ report is not accurate, and Motorola will continue to manufacture the Motorola XOOM.
Industry watcher NPD Group says sales of video game software in the U.S. declined by 5% year-over-year in January 2011, totaling $576 million. Console sales were down 8% to $324 million. On the back of continued strong sales of the Microsoft Kinect and PlayStation Move motion-based controllers, sales of video games accessories increased 6% year-over-year to $235 million. The only console to see growth in January was Microsoft’s Xbox 360, which sold 381,000 units — a 14.1% increase year-over-year. NPD ranked January’s software title sales as follows:
- Call of Duty: Black Ops (Activision Blizzard) – Xbox 360, PS3, Wi, DS, PC
- Just Dance 2 (Ubisoft) – Wii
- Dead Space 2 (Electronic Arts) – Xbox 360, PS3, PC
- Little Big Planet 2 (Sony) – PS3
- Zumba Fitness: Join the Party (Majesco) – Wii, Xbox 360, PS3
- NBA 2K11 (Take-Two Interactive) – Xbox 360, PS3, PSP, Wii, PS2, PC
- Assassin’s Creed: Brotherhood (Ubisoft) – Xbox 360, PS3
- Dance Central (MTV Games) – Xbox 360
- Michael Jackson The Experience (Ubisoft) – Wii, DS, PSP
- DC Universe Online: The Next Legend Is You (Sony) – PS3, PC
Overall, the U.S. gaming industry took in $1.14 billion excluding PC sales — a 4% slide versus the same month in 2010.
2009 has not been a good year for video games here in the US. While console sales were up significantly compared to July, August marked the sixth consecutive month in which industry sales have declined year-over-year. According to numbers recently released by NPD Group, overall gaming sales were down 16 percent YoY despite positive sequential growth for each major console other than the Sony PlayStation 2. Accessory sales were up 2 percent but game sales were down 15 percent and console sales dropped a massive 25 percent. Of note, PS3 sales in August were up over 72 percent compared to July’s numbers (121,800) thanks to a recent price drop. Here’s how August hardware sales break down:
- Nintendo DS: 552,900
- Nintendo Wii: 277,400
- Microsoft Xbox: 215,400
- Sony PlayStation 3: 210,000
- Sony PSP: 140,300
- Sony PlayStation 2: 105,900
As far as game titles, EA’s Madden NFL 2010 for Xbox 360 was the highest-selling game in August with 928,000 copies sold, followed by Wii Sports Resort for the Wii (754,000) and then EA’s Madden NFL 2010 for PS3 (665,000). Square Enix’s Batman: Arkham Asylum took both the four and five spots, having sold 303,000 copies for the Xbox 360 and 290,000 copies for PS3.
This past Wednesday Apple reported a very solid quarter due to growing iPhone and iPod sales that provided enough revenue to diminish its waning personal computer sales. Unfortunately it looks like Microsoft had no such cushion. For the first time in the company’s storied 23-year history, Microsoft reported a year over year slide as Q3 FY09 revenue declined 6 percent to $13.65 billion. Net income slid as well, down a disheartening 32 percent YoY to $2.98 billion. While enterprise revenue remained stable in the quarter, the company cited “weakness in the global PC and Server markets” in rationalizing its poor Q3 performance. So when might things pick up in Redmond? Microsoft admittedly has a lot riding on Windows 7, beta versions of which have been received with open arms by developers and end users alike. With resoundingly positive feedback from beta testers so far, Microsoft could be able to revive stagnant sales on the back of its new OS. According to the company, Windows 7 is still on track for a release in FY10.