Archive for Technology News

Will iPhone 5′s ‘Lightning’ Connector Bet Pay Off?

Is the iPhone 5′s new Lightning Connector a bigger problem than analysts seem to think?

From the day iPods debuted, you couldn’t miss the white wires. While all previous cables and headphones were black, Apple added a brilliant piece of branding to the world of mobile media: they changed cable colors. Today, you can always spot an Apple user. From the headphones in their ears to the charger cables dangling from wall outlets and USB sockets across the world, Apple white-washed them all. Today, the iPhone—Apple’s biggest selling product and smartphone originator—can be plugged in just about anywhere. Friends, colleagues, the guy sitting next to you in the library and even your local bartender can be counted on to help you out with a charge. But this ubiquitous charger utopia is about to come to an end.

With the unveiling of the iPhone 5 on Wednesday, Apple announced a whole slate of new changes including a larger screen, a faster processer and an 8 MP camera. But the blogosphere and tech journalists everywhere only saw one thing: the addition of the ‘Lightning’ connector. This miniaturized version of the omnipresent 30-pin connector offers a reversible design and a smaller, lighter cable that offers a faster charge and quicker transfers. It also requires all iPhone 5 buyers purchase a $29 adapter if they want to use the traditional 30-pin connection, still present on devices like docking stations, USB cables and other pervasive items.

Apple only compounded the ire of customers by releasing an order page in the U.K. proclaiming that the adapter came free with every purchase. This offer was later rescinded.

It is easy to see how this makes sense for Apple. The Lightning connector is smaller and requires fewer raw materials to make. If all those ubiquitous cables, cords and devices have to be replaced, one can hear the ka-ching noise a mile away. But with $40 headphones and $30 USB cables already a retail reality in the nation’s Apple stores, consumers are weary of these cash grabs. One wonders how much more customers can be expected to take.

But a look at Wall Street projections show no indication that analysts see this problem coming. Despite the fact that the launch of the iPhone 4S was the company’s first unsuccessful product launch, losing 10 percent on its stock price, analysts predict massive increases in the company’s current $664 per-share price. Analysts covering Apple with big names like Deutsche Bank, Barclay’s and Goldman Sachs all raised their stock price projections from the initial 10-15 percent estimate to over 25 percent after the iPhone’s newest features were unveiled.

Bloggers, tech journalists and business owners are not so sure. According to the Wall Street Journal, a Dallas hotel owner stated he bought 600 clock radios, all with the old connector. If iPhone has its way, every new phone user will be trying to balance their iPhone on top of a cradle dock and praying for the best. This scene is not consistant with iPhone’s interest in design and seamless plug-and-play integration. One thing is for sure: forcing customers to buy entirely new peripherals is a bet we can’t believe is going to pay off in Apple’s favor.

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Global Energy Panel Shows Return On Investment Strong For Clean Energy

Green businesses have seen a surge in porfits over the past few years thanks to the public’s growing concern over environmental issues.  Manufacturers who specialize in green versions of products like biodegradable packaging have been doing well, but the real money in green business seems to be in energy.

The International Energy Agency met Tuesday and urged all countries across the world to invest in clean energy. The meeting resulted in 25 specific recommendations aimed at helping countries become more energy efficient over the next several decades.

The recommendations ranged from phasing out inefficient fossil fuel subsidies to ensuring access to affordable energy were among the recommendations sent to energy ministers around the world as nations struggle to implement and properly spend scarce investment dollars.

IEA Executive Director Maria van der Hoeven told the New York Daily News this week that investment in clean energy made economic sense as every additional dollar invested could generate three dollars in future fuel savings by 2050.

These recommendations and projections follow a similar report released by the IEA in July touting the coming of age of the alternative energy sector. Based on work with world economies and technology producers, the IEA projects that global power generation from hydropower, wind, solar and other alternative sources is going to increase by 40 percent over the next five years. These projections are based on increased efficiency and lowered cost of fuel generating technologies.

The July report noted that 80 percent of the world’s energy mix currently exists in 15 key markets. By tracking developments in the energy varieties that exist outside of these 15, the IEA projects that clean energy will be within reach for many nations sooner rather than later.


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IBM to Purchase Kenexa for $1.3 Billion

IBM surprised both stock holders and market analysts by announcing their plans to buy Kenexa Corp, one of the leading social networking information analysts, for 1.3 billion dollars.  IBM plans to pay $46 a share for the company, almost a 42% premium over the stock’s Friday closing price.  The deal is expected to be completed by the end of fourth quarter, but the wait time has done nothing to kill the buzz surround the deal.  Many were surprised that IMB was willing to pay over a billion dollars for a relatively unknown company, but if you look at the work Kenexa has done in the past and truly think about the import role social media plays for businesses the deal makes perfect sense.

IBM has been promoting its business-analytics software for years now.  IBM’s program is designed to help companies sort through large amounts of data in order to study trends and make big decisions.  The company has spent a pretty penny improving their analytics software, over the past five years the company has spent $16 billion on analytics acquisitions alone.  The move makes sense business wise, the demand for hardware and hardware related services has fallen considerable over the past decade.  Now the money seems to be in data analysis, and companies are eager for new and improved ways to properly analyze their data.

Kenexa originally started in the recruitment services field, but since its beginnings in 1987 the company has switched their focus into social networking services in order to improve their data analytics services.  Their business shift has worked dramatically; the company helps big name corporations like Starbucks and General Electric sort through data and find new employees each year.  It looks like the buyout will have some very positive outcomes for IBM, even though stocks initially fell when the deal was announced.

 

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The Natural Gas Game

Investing in natural gasEnergy investments always seem like a safe bet, and with the emerging importance of alternative fuel sources there’s more of an opportunity than there ever to start investing.  Natural gas drilling is a controversial topic in the United States, but this article will stay clear of taking a side in the long and occasionally nasty debate.  Bloomberg Businessweek recently did a great in-depth piece on the divide natural gas drilling has caused in the country, and their story brought up a lot of interesting points about the future of natural gas investment. 

Fossil fuels were the top American energy source for the 20th century, but in the 21st century countless companies and individuals are placing their bets on shale gas being the #1 energy source for the country.  Natural gas seems like a miracle fuel for America.  There are literally trillions of tons of natural gas in hidden deep within American shale and bedrock, and it can lessen the country’s dependence on foreign oil.  Some people couldn’t be happier about the country’s interest in natural gas, but others think that focusing on shale gas could spell ruin for many investors.

The Money

Some people believe that natural gas is a great investment because they envision high fuel prices, but if anything natural gas has become devalued since people learned about the abundance of it in the US.  On average natural gas is 80% cheaper than it was a mere 4 years ago, and some worry that the number will get even higher as drilling continues.

Some economists argue that the only way the US can hope to make money off of our vast natural gas reserves is to ship it overseas where natural gas prices are much higher.  This is an excellent practice in theory, but in reality the United States has little infrastructure to facilitate exporting gas.  As of right now the United States has one major port/facility for converting and shipping natural gas, another site was recently approved in Louisiana but that could take years to build.  It can cost several million dollars to construct machinery to properly liquefy gas and make it suitable for transport for one site, so you know that building other facilities will cost a considerable amount of money.

There are an estimated 2,214 trillion cubic feet of natural gas in the country, almost enough to last the country a century.  Despite the high number US citizens actually don’t use a lot of the natural resource, citizens only burn about 22 trillion cubic feet of natural gas each year.  In the future natural gas could be very profitable so it may be worth getting involved in the beginning, but it doesn’t seem like the kind of investment that will make a lot in very beginning.

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Facebook Earnings Call Exposes Doubt In Social Media Stocks

After a disastrous IPO that saw social media giant Facebook’s stock price tumble from its opening of $38 per share to just below $24, the company’s first earnings call after going public was the most anticipated financial story of the week. Would CEO Mark Zuckerberg and his team of internet innovators have answers and new revenue-generating initiatives to show investors? While the call showed positive results like a 32 percent growth in revenue in the second quarter, there was a marked lack of earnings forecasts and strategies outlined to quell investor concerns. The company ended trading Friday down 12 percent.

The Facebook earnings call was just the latest in a series of disappointing returns for publicly traded social media companies. Social gaming company Zynga—responsible for a number of popular games including Words With Friends—posted another 3 percent in losses Friday after a posted loss in revenue sent the stock plunging 37 percent Thursday. Daily deals sites Groupon and Living Social are down 71 percent and 9 percent respectively from their opening offer prices.

What is it about social media companies that have driven these stocks out of favor on Wall Street? Financial analysts have posited many theories. For one, Facebook’s advertising model has not delivered nearly the level of results that other companies like Google have been able to generate, despite having billions of daily users around the world. The company has hinted at various initiatives, including increasing its mobile offerings and courting ecommerce listings for businesses with the addition of a “Want” button. Currently, the “Like” button is the site’s most popular feature.

According to the Wall Street Journal, traders and consumers have expressed concern over the way social media companies are structured. Many of the newly public Internet companies, including Facebook, Zynga, and GrouponInc. have several classes of stock, giving founders more power than other shareholders. This has ensured that founders can remain in control of offerings but may be deterring larger investments.

But the key problem that many in the industry seem to be cluing in on is that Facebook, like many technology companies, appears to have been overvalued. In the three years between Facebook’s initial May 2009 valuation and its May 2012 IPO, the company valuation increased from $10 billion to $100 billion.

There is one bright spot in the world of social media stocks: LinkedIn. The company has increased over 130 percent from its original stock valuation, making it the most successful social media company on the market today. Despite shake-ups like a hacking scandal that impacted over six million passwords and complaints that its mobile app was improperly downloading user information, the stock price has barely moved from its high returns. The stock is up over 50 percent on the year. 

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