In this Issue:
Gartner tell us that tablet sales will grow by 8% in 2015, with sales reaching 233 million units. They do expect sales of "ultramobile premium" computers (Apple MacBook Air, Microsoft Surface etc) to double over the next two years. Sales of traditional desktop and notebook PCs expected to decline from 279 million to 248 million between 2014 and 2016. Smartphones will continue to dominate overall device sales, rising from 1.83 billion in 2014 to 1.9 billion in 2015, and accounting for 77% of the 2.47 billion devices forecast to be sold this year.
The busy holiday season failed to boost global PC shipments, with research firm IDC reporting 80.8 million units shipped in the fourth quarter of 2014, a year-on-year decline of 2.4%. Lenovo is the sales leader for Q4 with 19.9% of the market, followed by HP with 19.7%, Dell with 13.5%, Acer at 7.7% and Apple at 7.1%.
The Global Talent Competitiveness Index measures a nation’s competitiveness based on the quality of talent it develops, attracts and retains. It is published by INSEAD and based on research co-conducted with the Human Capital Leadership Institute of Singapore and Adecco Group. The index features 93 countries and rankings are dominated by European countries, with only six non-European countries in the top 20. The top 10 performers are Switzerland; Singapore; Luxembourg; United States; Canada; Sweden; United Kingdom; Denmark; Australia; and Ireland.
Finding and hiring top technology talent is the biggest concern for 42% of managers, according to the Harris Allied 2014 Tech Hiring and Retention Survey. Retaining this talent was the second biggest worry among those surveyed. The survey was conducted in November 2014 among 193 executives ranging from C-level to middle-management executives within the information technology sector. Survey participants ranged from large industry leaders to small start-up companies in the United States, India, Israel and Germany.
The economy – Canada
Statistics Canada reported that Canada gained 121,300 jobs in 2014. This was a revised number, down from an original 185,700. The Canadian unemployment rate fell to 6.7% in December 2014. By province, employment rose in Alberta, Manitoba, Saskatchewan and Ontario in 2014. It declined in Newfoundland and Labrador as well as in New Brunswick.
The Canadian staffing index, a measure of staffing activity in Canada, was unchanged year-over-year at a reading of 101 in December. However, the index fell 9% sequentially from the November index value of 111. The index indicated a trend throughout 2014 of modest year-over-year declines.
Canada’s GDP declined 0.2% in November according to Statistics Canada. The decline was largely the result of declines in manufacturing, mining, and oil and gas extraction. In contrast, utilities and the agriculture and forestry sector increased.
The economy – US
US finance executives show more interest in spending than amassing cash, seeing opportunities in the economy but also feeling the need to keep up from a technology and talent standpoint. Compared with a year ago, CFOs are being more aggressive in spending, according to the CFO Alliance.
US real GDP rose at an annual rate of 2.6% in Q4 according to the US Bureau of Economic Analysis. The GDP estimate is slightly below consensus, but closer to the economy’s long-term trend growth rate of about 2.0 percent, according to The Conference Board.
The number of IT jobs in the US rose 0.1% in December to more than 4.7 million, according to the TechServe Alliance. On a year-over-year basis, the number of IT jobs rose 3.1 percent in the US for a total addition of 139,400 IT workers. The US also posted a 0.1% increase in engineering jobs in December for a total of more than 2.5 million. On a year-over-year basis, the US added 52,600 engineering workers.
The Conference Board’s US employment trends index increased in December to a reading of 128.43, up from November’s reading of 127.83. The employment trends index increased in every single month of 2014.
US private sector employment rose by 241,000 jobs in December, according to the ADP national employment report.
Small businesses are pushing forward with the momentum they gathered at the end of 2014 and starting the New Year with gains in hiring and the average paycheck, according to the SurePayroll Small Business Scorecard survey for January. Hiring and average paychecks rose 1.0% in January from December. According to the survey, 61% of small businesses said they are growing or planning to grow larger, and 48% said they plan to hire for new positions in 2015.
The American Staffing Association’s index measuring employment in the US staffing industry rose 5.41% for the week of Jan. 12 to Jan. 18 compared with the same week last year. The index value rose to 96.18, a record high for week three.
The Conference Board’s consumer confidence index for the US, which increased in December, rose sharply in January to a reading of 102.9 (1985=100) from 93.1 in the previous month. It is now at its highest level since August 2007
The economy – Outside North America
Mexico’s economic expansion should continue into early 2015, but the growth pace is unlikely to accelerate, according to The Conference Board. The leading economic index for Mexico fell by 0.1% in November. Despite some improvement in the construction sector, oil prices continued to fall and contributed largely to the decline in the index this month.
IBM dismissed reports that it will be laying off as many as 110,000 workers but admitted it is planning to cut "several thousands" of positions. Reports had suggested potential layoffs as big as 26% of its global workforce.
EMC warned it will cut jobs later this year as it forecast a lower-than-expected profit for the year. The data storage company did not specify how many jobs will be affected, but said they would come before the end of 2015. The company saw a boost from majority-owned VMware, which reported solid earnings this week, but EMC overall fell short of expectations.
SpaceX confirmed that it has raised another $1 billion in venture capital. The money will fund "continued innovation in the areas of space transport, reusability, and satellite manufacturing." Although once thought as perhaps just a pipe dream, Spacex founder Elon Musk announced via Twitter earlier this month that he would be working on the development of his Hyperloop proposal for supersonic-like high-speed rail transportation.
> MERGER & ACQUISITION ACTIVITY
Microsoft is embracing the open-source community and acquiring Mountain View, Calif.-based Revolution Analytics. Microsoft CEO Satya Nadella proclaimed at an October press event that Microsoft loves Linux, the open-source platform that it has long competed with in the server space. Now in acquiring Revolution Analytics, it’s picking up a large commercial contributor to open-source programming language ‘R’, used for statistical analysis and predictive analytics. Revolution Analytics plans to continue to invest in the R Project and sponsor local R user groups and events, and put even more resources behind its open-source projects. It will continue to support and develop its current line of Revolution R products. Microsoft customers can expect to see some new R-based tools available to them for both on-premises data platforms and the Azure cloud platform.
Microsoft is buying startup Equivio, a text analytics startup that will enable Redmond to broaden its eDiscovery and information governance offerings that are already available within Office 365. The software giant believes this can help businesses and government organizations better manage their data. Equivio produces text analysis software that leverages machine learning capabilities to automatically group related documents and identify those that are unique, in order to better help users find the information they need quickly. Current Equivio customers include the US Department of Justice, NASA, Thomson Reuters, and Deloitte, among hundreds of law firms and corporations. It is estimated the deal was worth between $150 and $200 million.
Twitter has paid probably $30 to $40 million for ZipDial, a company that provides a marketing platform using missed calls. Most of ZipDial’s employees will be joining Twitter. Based in India, ZipDial allows users to call a business’ phone number and then hang up right away before they’re charged for the call time. The business can then send them a text or call them back to provide information about what the business does — a huge boon in developing markets, where people can’t always afford data plans for accessing the Internet, or who aren’t always near a Wi-Fi hotspot. On the business side, ZipDial makes it possible for companies to use texts, voice, mobile web, and mobile apps to reach their customers, essentially giving them multiple platforms to quickly interact with consumers. The company was founded in 2010, and it’s since picked up steam in India through signing on Fortune 500 companies as clients. It’s also partnered with Twitter a number of times
Yahoo is spinning off its holdings in Alibaba Group into a registered investment company in a move that’ll raise a ton of cash, but raise questions about how to deploy it. The company said that Alibaba will be spun off tax free to shareholders. Yahoo will have its core business and hold its 35.5% stake in Yahoo Japan. When the spin-off is complete, the offspring, called SpinCo for now, will hold Yahoo’s 384 million shares of Alibaba, currently valued at $40 billion. A registered investment company looks like a mutual fund or real estate investment fund instead of a working company. For Marissa Mayer, CEO of Yahoo, the distribution of Alibaba shares removes the largest question of her tenure. Mayer said in a statement that once the spin-off is complete, Yahoo will have generated $50 billion in value to shareholders. The spin-off is expected to be complete in the fourth quarter of 2015. Yahoo’s future will then we interesting, a smaller company with a healthy balance sheet might become an attractive takeover target. Alternately the warchest might provide the funds to acquire companies and build a new Yahoo.
Dropbox is buying the Herzliya, Israel-based startup CloudOn. CloudOn makes document editing and productivity tools for mobile devices and claims to have more than 9 million registered users. The five-year-old company started out with a focus on editing Microsoft Office documents, and continued to forge a tight compatibility with Word and other files. CloudOn engineers in Herzliya will go on to form the first Dropbox office in Israel, joining existing offices based in San Francisco, Seattle, New York and Dublin, Ireland. Dropbox and Microsoft announced a partnership last November that would allow users to access Dropbox directly from Office apps and edit Office files from the Dropbox app. With the addition of further document editing and productivity tools from CloudOn, Dropbox is clearly taking steps to diversify its portfolio away from storage.
Facebook confirmed that it has acquired Wit.ai, a startup that lets developers add Siri-esque voice recognition capabilities to their products. Wit.ai, a Palo Alto, Calif.-based company founded in 2013, says its technology lets users interact with apps, wearables, robots, and messaging tools via voice, while learning human language from each of its interactions.
Google is in talks to buy mobile-payments company Softcard, probably for somewhere less than $100 million. Softcard is jointly owned by AT&T Inc, Verizon Communication Inc’s Verizon Wireless Inc and T-Mobile US Inc., which could help Google to compete with battle Apple’s new Apple Pay service.
Samsung will pay something close to $100 million for Simpress, which is Brazil’s largest printing service company. For Samsung, the acquisition of Simpress will fill in a few B2B gaps for expansion into Latin America. Samsung is looking for an efficient way to sell its stack — PCs, printers, screens, tablets and smartphones — into the enterprise. The company recently built a services unit targeting the enterprise and Simpress would give Samsung a better foothold in Brazil and an avenue into business process outsourcing.
Telecom equipment maker CommScope Holding said it would buy nearly all of Swiss electronics firm TE Connectivity’s network gear business for about $3 billion to expand in Europe and Asia. The deal comes at a time when operators are increasing their spending on mobile and fixed networks to improve coverage and boost capacity to keep up with rising data traffic from video and smartphones. TE Connectivity, which split from Tyco International in 2007, said the unit generated revenue of about $1.9 billion in the year ended Sept. 26. The business makes fiber optic cables and network switches. The acquisition does not include the unit’s subsea fiber optics operation, which is used by telecom and oil and gas customers. The deal will help CommScope expand in overseas markets.
Expedia has acquired online travel agency Travelocity from technology company Sabre for $280 million in cash as consolidation in the online booking industry continues. The deal follows a 2013 marketing agreement in which Expedia’s technology powered platforms for Travelocity’s U.S. and Canadian websites, while Travelocity drove additional web traffic to Expedia. The merger marks further consolidation in the online booking space, which has seen a number of acquisitions from Expedia’s main competitor, Priceline, including its $2.6 billion takeover of restaurant reservation website OpenTable last year.
It seems that Hutchison is offering more than $14 billion in cash and a further $1.4 billion in deferred payments to buy O2 from Telefónica. A Hutchison O2 merger would have a big impact on the British mobile market, reducing competition and thus likely increasing prices. Telefónica will use the proceeds to pay off debt and fund growth in countries such as Brazil. The combination of O2 and Three would create the largest mobile operator in the UK with more than 31m subscribers, which is about 41% per cent of the market, followed by EE (32%) and Vodafone (24%).
Amazon is paying somewhere between $300 million and $375 million for secretive Israeli chip designer Annapurna Labs Ltd. Based in Yoqneam, in Israel’s north, Annapurna Labs was founded in 2011 by the founder of the chip-design company Galileo Technologies Ltd, which was sold to Marvell Technology Group for $2.7 billion in 2000. Originally funded by Mr. Willenz and people related to him, Annapurna hasn’t revealed the technology it is developing. The people familiar with the matter said Annapurna develops midrange networking chips for data centers that transmit more data and use less power. Seattle-based Amazon, a global market leader in cloud services and online retailing, likely would use Annapurna’s designs in its extensive data centers to lower operating costs. Amazon Web Services rents computing power and data storage to more than one million businesses.