According to the Consumer Electronics Association, worldwide spending on consumer gadgets will reach $1.1 trillion in 2013. The CEA, which organizes the Consumer Electronics Show set to kick off on Tuesday, said global consumer spending on electronics will grow 4% over 2012 after having dipped roughly 1% last year. The estimate comes from Steve Koenig, director of industry analysis for the CEA, and he believes mobile computers, smartphones and tablets will be responsible for more than half of global spending on consumer electronics this year. Koenig warned that the uncertain European economy could have a negative impact on his forecast, however, and tax changes in the U.S. could hurt consumer spending as well.
Nokia on Thursday announced that it will cut as many as 1,000 jobs at its plant in Salo, Finland. The company’s layoffs will happen gradually through 2012, with most cuts happening by the end of June, Reuters reported. The Salo plant is the last large cell phone manufacturing plant in Western Europe, as most businesses have moved their manufacturing to Asia. Last month, Nokia shed 2,300 workers from a plant in Komarom, Hungary and 700 others in Reynosa, Mexico as it too shifted much of its manufacturing to China. This new round of layoffs comes as part of a larger effort to cut costs following the €1 billion loss the company reported last quarter. More →
Apple on Friday updated its website with a new job creation section detailing the company’s role in creating American jobs. Since its inception, the Cupertino-based company claims to have created or supported more than half a million jobs for U.S. workers across 50 states. “Throughout our history, Apple has created entirely new products — and entirely new industries — by focusing on innovation,” the company said on its website. “As a result, we’ve created or supported more than 500,000 jobs for U.S. workers: from the engineer who helped invent the iPad to the delivery person who brings it to your door.” Of the jobs created, 304,000 span engineering, manufacturing and transportation while an additional 210,000 have been created due to the iOS app economy. More →
Intel recently notified partners of its plans to postpone mass shipments of the company’s Ivy Bridge processors, reports DigiTimes. The company still plans to announce new products that will ship in small volume in April according to the report, although mass shipments are not expect to occur until after June. The supposed delay comes as a number of notebook vendors are seeing weakening sales from the diminishing global economy and other factors. Both vendors and Intel are said to have large inventories of Sandy Bridge processors, so the delay could be seen as a way to minimize the impact of leftover CPUs. More →
Samsung recently warned employees at its South Korea headquarters that the company will face stiff competition amid a weak economy this year. “The global economy’s low-growth trend will continue and uncertainty surrounding the business environment won’t be easily removed,” Samsung Chairman Lee Kun Hee told his employees according to Bloomerg. The company had a solid 2011, when it sold more than 300 million cell phones for the first time ever. Analysts are also worried about the situation; Park Hyun, an analyst with Tong Yang Securities Inc., said Samsung’s performance is uncertain for 2012. “Potential demand may be there, but whether it will materialize totally depends on the macroeconomic situation,” Hyun explained. Tech isn’t the only industry that’s affected by the economy in South Korea — auto makers are also bracing themselves. “We should make our corporate culture more open, flexible and innovative.” Chung Mong Koo, chairman of Hyundai, also said that he believes the auto industry will also slow this year. More →
Sony reported its fiscal first quarter results on Thursday and recorded a net loss of 15.5 billion Yen ($198.7 million). The company attributed the loss to the earthquake that struck off the coast of Japan in March, as well as a “stagnate” economy in the United States and Europe. Sony’s operating profits were 27.5 billion Yen ($330 million), down from the 67.02 billion Yen ($862) it reported during the same quarter last year. Operating revenue was 1.49 trillion Yen ($19.1 billion), down 10% from the 1.66 trillion ($21.3 billion) in revenue Sony reported in the first fiscal quarter of 2011. “We think we can be profitable at the current exchange rate levels,” Sony’s chief financial officer Masaru Kato said during a recent news conference. “We had almost no negative impact from the dollar, but the euro is still an issue for us.” Kato said that “TVs are one of the only remaining issues,” for the company and noted that Sony expects to sell 22 million televisions this year, down from the original projection of 27 million units. Kato said Sony’s supply chain was hit hard by the earthquake and impacted the company’s sales during the first quarter but that the supply channels have already bounced back.
Qualcomm said it expects to ship between 120 million and 125 million chips during the quarter ending in September, a figure that is lower than the 130 million units MLM Partners LLC analyst Tero Kuittinen expected the company to move. The lower projection hit Qualcomm in late trading on Tuesday when its stock price fell 3.8%. Qualcomm blamed the lower than expected forecast on a weak European economy and said that consumers there aren’t buying new phones as quickly. “Chip units for autumn are light,” Qualcomm chief financial officer Bill Keitel said during a conference call. “The blame likely lies in Europe. European inventory correction now seems to be a fact instead of a theory. We reduced a bit our forecast for how many new CDMA-based units would sell into Europe. The situation demands that we still be cautious.” The company also noted that it hopes to begin working with manufacturers to build its Snapdragon processor into tablets. That chip is mostly used in smartphones now and manufacturers such as Samsung and Motorola have instead used NVIDIA’s dual-core Tegra 2 chip to power Android tablets. More →
As Finnish cell phone giant Nokia continues to cut costs in an effort to combat declining demand, the company recently told Reuters it would shed an additional 490 jobs in the near future. 170 employees from Nokia’s logistics, production management and production support divisions will be released and the company will extend its Voluntary Resignation Package to 320 workers at its Salo facility. Nokia had already implemented a temporary layoff schedule at its plant in Salo, but apparently the measure wasn’t as effective as it had hoped. So far this year, Nokia has cut approximately 4,000 jobs as it pushes to reduce annual expenses by nearly $1 billion.
The Rockefeller Institute, a research group tied to SUNY, said that sales taxes took a 6.1 percent dive in Q4 of 2008 and Q1 of this year was even worse. Given the current state of the economy of course, this is hardly a surprise. Beyond the obvious reasoning behind the decline — people are losing jobs, making less money and spending less money — the drop may be bad news on another front as it could finally spell the end for the free rides afforded by online shopping. The idea of requiring online retailers to collect sales tax on out-of-state sales has been tossed around over and over again but according to the New York Post, this time around it might just stick. A bill is expected to go before congress as soon as this week that would require online retailers such as Amazon and Overstock, and even the online auction house eBay to collect sales tax on behalf of the state to which items are delivered. This spells certain aggravation for consumers who enjoy saving cash by ordering online and even more so for Internet retailers who will have to implement the new policy.
In New York State where an online sales tax bill was passed last Summer, Web retailers are already in the midst of fighting the new policy. New York’s law now requires any online retailer that advertises on New York-based web sites to collect sales tax when shipping to New York. Amazon and Overstock have both pulled all advertising from websites based in New York in protest.
Sony Ericsson announced today that Najmi Jarwala has resigned from his position as President of Sony Ericsson USA and Head of Region North America (US and Canada). Mr. Jarwala will be leaving his position at the end of March in order to “pursue other career opportunities”. While SE seeks out a replacement, the dual role will be filled by Anders Runevad, currently the Executive Vice President of Sony Ericsson and Head of Global Sales & Marketing. With Sony Ericsson seemingly sinking faster than a lead weight, we can’t blame Mr. Jarwala for jumping ship while he can — though we would imagine he didn’t make the decision to leave entirely by himself.
The heat is on and Nokia appears to be feeling the burn as much as the next company as it has just announced a new round of cost-cutting measures that will go into effect next week. The Finnish handset manufacturer turned Internet Company revealed today that it will be introducing a new Voluntary Resignation Package that invites employees to voluntarily and amicably part ways with the company. This of course is in addition to the recent news of massive temporary layoffs at its production plant in Salo. A sound word byte from Hallstein Moerk, Nokia’s Head of Human Resources:
The response from employees and employee representatives in proposing ideas to help reduce personnel-related costs has been encouraging. We have considered these and are now announcing voluntary initiatives that could contribute to our efforts to adjust our cost base to the current market environment. If successful, the voluntary initiatives will lessen the need for involuntary redundancies.
Nokia will put the package into effect beginning March 1st and it will remain on the table until 1,000 employees have taken Nokia up on its offer. In addition, Nokia is encouraging its staff to request unpaid leave of up to one month and will happily grant such requests provided “business continuity is not jeopardized”. Sad news indeed, but we’re certainly hoping enough people can take advantage of the VRP and land gigs elsewhere so that Nokia doesn’t have to resort to any more “involuntary redundancies”.
As MWC draws closer mobile fans around the world wait in anticipation as mobile companies prepare some of their biggest announcements of the year. Leading up to MWC, news coming from manufacturers is historically positive – a taste of things to come in Barcelona. In this economic climate however, mobile companies find themselves unable to wait until this sacred time has passed and we are still seeing bad news come down from every corner of the industry. Today’s news comes from our friends in Finland as Nokia discusses the coming year with two key phrases: scale down and reduced market demand. Juha Putkiranta of Nokia:
With these plans, we aim to scale down Salo production to reflect reduced market demand, while operations in the factory continue uninterrupted.
Nokia plans to cut handset production and layoff the entire staff at its Salo plant (2,500 workers) on a temporary rotational basis. In other words, the plant will remain operational but only 20 to 30 percent of its staff will be on hand at any given time. Following Nokia’s closure of its German manufacturing plant, Salo is the last major handset plant in Western Europe and had been used to produce some of Nokia’s higher-end handsets, the bulk of which will now likely be moved to foreign plants. All of these moves of course, are part of an effort to shave $905 million from its operating expenses this year as many project Nokia’s shipments and sales to continue to decline. Less market demand, declining numbers and more competition are never a good trio for any market leader but we’re hoping Nokia has some tricks up its sleeve for 2H 2009 and beyond.
Despite solid Q4 2008 earnings, Verizon Wireless is apparently not layoff-proof in this struggling economy but then no company is. Rumor has it that Verizon is in the process of an unannounced work force reduction that began yesterday, February 9th. The rumored layoffs will continue through the end of the month and will affect an unknown number of employees from management level down. As always is the case, low performing employees and those facing disciplinary action are at the highest risk of losing their jobs. This is certainly a difficult economic time and even successful companies may be prompted to let employees in an effort to minimize the impact of the downturn. We hope that this rumor is not as dire as it seems but if it does pan out our condolences are certainly with all who are affected.
UPDATE: Here’s what we think happened after talking with some people in the know… it seems as if this is concerning employees associated with Circuit City (estimated at around 240). Since they are Verizon Wireless employees, Verizon is said to have tried and relocated as many of them as possible to other stores, etc. We’re told that the employees that were let go got severances packages including outplacement services to help them find other employment.