HP Strengthens Brand

xHP continues to strengthens it's brand name as it receives another accolade from industry evaluators. The computer producing company has been named a leader in the most recent 'Gartner Multifunction Printers report'. According to the report, HP products have become stronger and more reliable then previously. Hewlett Packard has also surpassed other printer specific companies in consumer ratings on products. HP has recently refocused their strategy on printer production. A newly created strategy has a concentration on security, cloud printing and stronger diagnostics.

HP hopes that new ideas will allow their consumers to update and expand on the capabilities of their printers. HP's Senior Vice President of their Printing solutions division remarked "that our strategy (is to ensure) that customers gain a real competitive advantage with these devices". HP intend to continue strong sales within it's printer division and believes that their strategy will advance the technology of multifunction printers.

HP has broadened it's printing products beyond everyday consumers. New products are now focused on specific industries. The HP ePrint & Share(2) allows designers, architects, and engineers to access 'large-format plans' through cloud software. Architecture companies love the new idea. "Using the HP ePrint & Share mobile application while we are on the go is a very powerful tool for us to communicate with all parties involved in a project, ensuring that the plans we are working from are the most current and keeping the design process flowing smoothly and efficiently" says Matias del Campo of SPAN architecture and design. If HP continues to hear responses like that from companies in specific industries they may have tapped into a niche market.

http://www.marketwatch.com/story/hp-achieves-position-as-a-leader-in-annual-magic-quadrant-report-for-mfps-and-printers-2011-10-26

http://www.marketwatch.com/story/hp-brings-large-format-printing-to-design-professionals-on-the-go-with-new-mobile-application-2011-10-20

Netflix Plan to Spend Billions More Than It Has

Just three months ago Netflix was flourishing. Its profits were high, its investors and customers were happy and the only question of its future was how big it might become. However, over the summer the company made the possibly fatal mistake of raising its prices well over an amount its customers were willing to pay. As over 800,000 customers abandoned the company, as did a substantial amount of investors. Now instead of gaining a predicted earnings growth of 38% between 2011 and 2012, the company has in fact lost 37% of its worth in just the last few months. On Monday the company released a statement saying it expects to lose money "for a few quarters" starting next year. But just how much do they plan on loosing?

Netflix has already committed to spending $3.5 billion on marketing and content over the next several years. The goal of this massive investment is to "bring domestic subscriber growth back to life and get it started in new overseas markets". While at face value the plan seems logically sound, many critics have raised the question: Can Netflix really afford to spend $3.5 billion? Since 2007, the company has spent more than $1 billion on share purchases, leaving its cash flow at just $366 million. After factoring in roughly $200 million worth of debt, the amount has reduced down to just $13.8 million. As contracted content payments continue to rise and customer return seems slow at best, it is likely the company's recent announcement will hold true.

If the company continues on its current path, experts say competitors such as Amazon, may soon begin to take interests in takeover. Personally, I couldn't agree more. I have a tremendous doubt that Netflix will be able to regain all that it has lost. I feel that competitors will take advantage if the situation and offer the board of Netflix a chance to save their investments and leave with a sizable profit.

http://online.wsj.com/article/SB10001424052970204777904576653022926782608.html?mod=WSJ_business_whatsNews

Possible acquisition of Yahoo by Microsoft

In early September the Wall Street Journal reported on the difficulties that the Internet business Yahoo has currently been facing. One of the sources of income for a mainly Internet based company are the sales of advertisements on their website. Yahoo, as well as others such as AOL, were late to realize the impact and popularity of social networking sites and as a result the popularity of Facebook, as well as competition with Google, has caused them to struggle with advertisements. Yahoo’s percentage of the overall shares of U.S. online advertising market dropped from 16.1% in 2009 to 11% in 2011. Also, Yahoo’s total revenue fell 23% in one year’s time and now Yahoo is in danger of a takeover.

Both Microsoft and Google are the two companies in competition for the acquisition of the company. Both Companies have a lot of cash and would be able to afford to takeover Yahoo, where most private- equity firms are having difficulty borrowing enough money to make billion dollar deals, Google and Microsoft have liquid assets already available. In the case of Microsoft, one possible reason for their desire to acquire Yahoo is their current advertising deal with them. Microsoft’s Bing search engine provides search results and yahoo provides the advertisements and any change in ownership of Yahoo could be unfavorable for Microsoft. The competition with Google comes in with Google possibly wanting to get an advertisement deal with Yahoo, although the government antitrust regulations most likely discourage such a deal. Also, Google probably doesn’t want Microsoft to own Yahoo for competitive reasons making the battle for Yahoo strategically competitive.

http://blogs.wsj.com/deals/2011/10/24/who-needs-banks-in-yahoo-takeover-google-and-microsoft-play-banker/

http://online.wsj.com/article/SB10001424053111903285704576556973446155098.html?mod=WSJ_article_onespot

Oracle in $1.43 Billion Deal for RightNow

Oracle (Software and Programming Corporation) has taken a bold step forward by striking a $1.43 billion deal to acquire RightNow Technologies, a provider of Web-based customer service solutions, as they wish to build their portfolio on cloud-based offerings.  The enterprise software giant is going to pay RightNow’s shareholders $43 a share, under the terms of its deal.

This deal is the product of Oracle’s attempt to boost its cloud-based software systems that are available via web and focus on aiding online retailers improve customer service. Last week, Oracle also purchased Endeca Technologies for an unannounced amount. Oracle’s acquisition, the largest since it purchased Sun Microsystems for $7.4 billion in April 2009, also indicates that Oracle’s appetite for acquisitions is strengthening once again.

Earlier this year, Oracle’s chief, Larry Ellison, said he was restraining his check book and focusing on organic growth because assets were “wildly overpriced.” While the company has made several acquisitions this year, it has largely focused on smaller, privately held companies.

I think that by this growth and organic growth, Oracle will be able to pool their resources and strengthen their market position, as well as their financial stance with their specialised and knowledgeable workforce and have access to a greater customer base in order to succeed. As Oracle is interested mainly in small acquisitions, it means that there is a low level of risk in acquisitions; however, this may limit their scope for growth and high profit, as high risk results in higher profits and benefits. As shown in Figure 1.1, the combined assets of the recent acquisition will give a figure of $74.27 billion, which will make them the biggest company in the Software industry. On the other hand, the combined liabilities would equal to a heavy figure of $33.27 Billion, which means that the company would be in debt to other and will have to insure that the debt is payed off from their retained earnings or by liquidising their assets and perhaps, calculating their Leverage Ratios to measure the degree to which they rely on borrowed money, in order to respond to cash flow issues.

Figure 1.1

http://dealbook.nytimes.com/2011/10/24/oracle-to-buy-rightnow-for-1-5-billion/?ref=technology

International Computer Firms Hit the US Market

The Computer Software and Hardware industry has had great international influence for a very long time. Many Asian technology brands, from Korea, China and Japan, have challenged US companies for market share since the dawn of this industry. Brands such as Sony and Toshiba have released powerful, consumer favorites that have competed with similar US manufactured products on the market. Sony, a Japanese headquartered brand, has ownership over the VAIO product line.

The VAIO brand has released over twenty different types of computers that are popular from Japan to the United States. Sony has brought in an annual 18.5 billion dollars worth of sales per year. The brand is extremely popular among television and video game sales as well.

Acer is another large brand in terms of internationally based firms. The Taiwan based firm had a net income of over 500 million dollars in 2010. The firm also employs over 7500 employees world wide. Acer acquired Gateway in 2007 and soon became the parent company for the California based firm. According to Gartner's Preliminary U.S. PC Vendor Unit Shipment Estimates for 3Q11, Toshiba and Acer, two foreign firms, will be responsible for 18.5 percent of the US PC Market share. While not the leading brands in the market, both firms hold their own against large American based computer companies.

http://www.macrumors.com/2011/10/12/apples-share-of-u-s-pc-market-leaps-to-12-9-in-3q-2011/

http://us.acer.com/ac/en/US/content/company

The Big Picture of Computer Hardware

Taking a look into the Computer Hardware and Software Industry, one is thrown into a sea of many successful international companies. Most look to the United States, with Apple and Hewlett-Packard commanding a huge share of the industry, but some key players fall over seas. Some huge companies include Samsung, Toshiba, Sony, and Panasonic. The companies listed have produced products not only within the computer software/ hardware industry, but also many other fields ranging from kitchen appliances to television monitors.

These companies can be considered key players in the software/hardware industry mainly because they can be classified as computer system manufacturers. The topic of computer hardware opens the industry up as many other devices run off of computers. For example: Samsung’s phones use computer based processors, LG’s appliances use computer systems to monitor how food is stored or prepared, and Sony, Toshiba, and Panasonic’s TVs use basic computer chips to stream the television that everyone enjoys.

Personally I think that this proves the value of the Computer Hardware industry, as it allows more companies to make a name for themselves. It opens the world to a common industry that can be analyzed on so many levels.

Computer Industry Outsourcing

Manufacturing is a major part of the computer hardware industry and keeping costs low and profit high is always a factor. Many companies such as HP, IBM and Dell outsource production of their products. Because so many parts go into making computers and other electronic devices outsourcing makes sense. In December of 2009, HP set up a $ 1 billion investment plan involving setting up outsourcing centers in India to compete with IBM and Dell because both of those companies were increasing outsourcing in low cost areas such as India. More than 90% of technology productions in low cost areas are located in India because of a growing population of English-speaking computer engineers and India’s desire to gain more outsourcing vendors to join the global market. India has not only a large amount of English speaking engineers but also an abundance of English speaking technical support which is why when someone in the United States needs assistance with their computer, they call the company and get linked with a the support employee in India.

This September, Apple came under scrutiny by environmental activists in China because of some of their supposed supplier plants there. An activist group claims they found polluted canals leading from what the group believes in an Apple plant. Apple does not identify all of their suppliers, which is why they were under questioning. Apple never claimed that specific factory as being associated with them but they did issue an annual report that, this year, reported that Apple identified and corrected 80 facilities that were not storing or handling hazardous waste properly and 41 that were not recycling or disposing of hazardous wastes properly.Outsourcing is a good idea for computer hardware companies to utilize but there are issues that can arise and things that companies should be sure to watch out for.

sources: 1.http://online.wsj.com/article/SB10001424053111903895904576542273644200108.html?KEYWORDS=apple+outsourcing

2.http://online.wsj.com/article/SB10001424052748703296604576005151105178710.html

3. http://www.businessweek.com/technology/content/jan2009/tc20090115_770577.htm