Author: Scott Hodges

Apple Apologizes to China

Posted on by Scott Hodges

Apple Inc has recently apologized to Chinese consumers – and for good reason. Their Chief Executive Tim Cookrecently apologized after getting blasted for two weeks for their after-sales service. The government-controlled media in China has been blasting Apple for “arrogance,” saying that they are only offering a one year service warranty in China and other issues.

While Apple initially ignored the criticisms, they did finally issue an apology and pledge to overhaul their consumer practices. Cook wrote, in a letter written in Chinese on Apple’s local website, “We are aware that owing to insufficient external communication, some consider Apple’s attitude to be arrogant, inattentive or indifferent to consumer feedback. We express our sincere apologies for causing consumers any misgivings or misunderstanding.”

Revenue from Greater China totaled $7.3 billion during the first fiscal quarter this year. This number was up 60% from only one year ago. Certainly, China is important to the Apple market and Apple is keeping its eye on the area to keep it happy.

Cook admitted in his lengthy letter that Apple has “much to learn about operating and communicating in China.”

Technology Investors Look to Change Gun Usage

Posted on by Scott Hodges

In response to the school shooting in Connecticut last December, a group of San Francisco Bay Area technology investors is taking action. They are backing a collection of startup companies that are developing “smart guns” and other methods to curb gun violence. At a news conference on Thursday, Ron Conway, an early-stage investor who has backed companies like Google and Twitter, said,  “A year from now, we will be able to point to the Googles, the Facebooks and Twitters, who are working in gun safety.”
The group is envisioning a number of safety measures that would include data-sifting software to improve gun purchaser background checks, “smart guns” that will only fire with a technology check and more. The San Francisco technology effort is coming from Sandy Hook Promise, a non-profit group that started after the Sandy Hook Massacre in Newton, Connecticut.
As the Sandy Hook Promise explains on its web page, “The Sandy Hook Promise Innovation Initiative is a “call for ideas” to reduce gun violence and a commitment by leading venture capitalists and angel investors to fund promising innovations in gun safety, mental health research and related new technologies. The Technical Committee to Reduce Gun Violence, which is a part of the Sandy Hook Promise organization, will be overseeing this initiative.”

Pinterest Hits the Mark

Posted on by Scott Hodges

Pinterest, the fastest standalone website to ever get to 10 million unique visitors a month, currently has 25 million members. Many of them are young, female, well-educated and ready to spend their money. Retailers are rushing to get to these potential customers, but Pinterest is an ad-free website.

Retailers are still trying to figure out how to get to the Pinterest market and how to reach out to shoppers in this way. Many retailers now have buttons on their main websites, hoping that potential customers will Pinterest their items. As Kyla Brennan, chief executive of HelloInsights, which provides analyses of Pinterest use, said

“It’s a huge window-shopping platform. It helps people find what they really like. Does it encourage people to be a little impulsive? Of course.”

Pinterest shoppers, on average, spend almost $170 per session, according to information from an e-commerce consultant, RichRelevance. They found that Facebook shoppers spend $95 per session and that Twitter shoppers only spend $70.

Companies with a major presence on Pinterest to date include L.L. Bean with over 5 million followers, Nordstrom Inc. with over 4 million followers and Lululemon Athletica Inc with almost 2 million followers. Pinterest recently closed a $200 million round of financing, where they raised their value to $2.5 billion.

Groupon Inc. Loses a Quarter of Its Market Value

Posted on by Scott Hodges

Groupon Inc has recently admitted to losing a quarter of its market value on Wednesday after just revealing that they began to take smaller cuts of their revenue on daily deals during the holidays.

They did so to sacrifice revenue and profits in order to attract and keep merchants.

The company has actually lost more than 75% of its value since it started at $20 in November of 2011. As Tom White, an analyst at Macquarie said, “This raises questions about how these guys are going to be able to scale the business. The forecast is underwhelming.”

Groupon has kept almost 40% of the money that they generated by daily deals. That then declined to 35% in the 4th quarter. The company is hoping that profitability will improve. As Child said, “We are focused on driving growth. We will make the investments we feel we need to optimize for growth and merchant profitability.”

Electric Car Recall: Bad for Mitsubishi Business

Posted on by Scott Hodges

Mitsubishi Motors is finding itself in hot water at the moment, recalling 14,700 electric cars globally due to brake issues that are unique to its electric-motor powered cars. This is one of the biggest callbacks that involves the new generation of eco-friendly cars they are trying to push.

Certainly, this recall is small compared to those that occur for conventional petrol-driven cars, but it accounts for almost half of their overall i-MiEV and MINICAB-MiEV production.

About the recall, Tatsuo Yoshida, a senior analyst at Mitsubishi UFJ Morgan Stanley Securities in Tokyosaid, “This is a matter of one part, and it’s too much to apply the issue to say there is something wrong with electric vehicles.”

He continued, “The cause of the problem is identified and there were no accidents. But the problematic part is the brake, an important part for safety, and that means Mitsubishi Motors’ quality check procedure is too weak.”

Office Depot Inc. and OfficeMax Inc. May Merge

Posted on by Scott Hodges

In an interesting piece of news, Office Depot Inc. is in advanced talks to merge with OfficeMax Inc. Both of the companies are under a great deal of pressure from investors to boost their profitability and their shareholder value. A merger could help them to cut costs, close stores and boost their placement with suppliers.

Office Depot’s market capitalization is at $1.1 billion and Office Max has a market value of $932 million.
Benjamin Nahum, a portfolio manager at the investment firm Neuberger Berman LLC, said, “In our view this would facilitate a fair deal.”

According to Thomson Reuters data, Neuberger Berman owns 4.76% of OfficeMax, which makes it the third-largest shareholder of the company.

In 1997, The Federal Trade Commission rejected a $4 billion merger of Office Depot with Staples, arguing that it would lead to less competition and higher prices for customers. Analysts are now less concerned about those issues.

Daimler Personnel Getting Extended Contracts

Posted on by Scott Hodges


For those following news about Daimler, they have just announced that they will extend the contract of CEO Dieter Zetsche by five years. This will take him until the end of 2018, as a source familiar with the situation reported to Reuters.

As the source said, “The board meeting on February 6 is just to approve the preliminary annual earnings results. The first full board meeting where personnel issues will be discussed is on February 21.”

Other top executives will also have their contracts renewed. These include Research & Development Chief Thomas Weber, who should have his contract extended by five years. It also includes Christine Hohmann-Dennhardt, who heads compliance, and should also receive an extension. It is not clear at this time how long her extension will be for.

Yahoo Climbing Its Way Back Up

Posted on by Scott Hodges

Yahoo Inc. is forecasting a modest upturn in revenue for 2013, but Chief Executive Marissa Mayer warns that it may take a lot of work to get there. The company, with new CEO Mayer, plans to overhaul a dozen of its online services to try to increase the amount of time that users spend on their sites.

 As Mayer recently said, “While the road to growth is certain, it will not be immediate.” Yahoo does predict that their revenue will grow at a rate of .7% to 3% for the year ahead, ranging between $4.5 billion and $4.6 billion for 2013.

As Macquarie Research analyst Ben Schachter said, “What was clear from the call is that this is a long-term turnaround story. We shouldn’t expect anything to just snap back and correct itself.”

Mayer said that the Yahoo efforts to revamp their mobile properties, including Flickr, are definitely on track. As she said, “From a monetization perspective this is still a very nascent source of revenue for us. With any platform shift, revenue always followed users and mobile will be no different.”

Mayer seems to be steering the company in the right direction after a rough period. Taking over when former CEO Scott Thompson resigned less than six months after taking the job. Mayer has seen stock rise approximately 30% since she took over. The company’s fourth-quarter net income was $273.3 million, or 23 cents per share. It was $295.6 million, or 24 cents a share one year ago. Yahoo shares were up 59 cents at $20.90 on Monday.

Netflix Inc. Dominates This Holiday Season

Posted on by Scott Hodges

Not surprisingly, while Blockbuster is falling to the side, Netflix Inc continues to do shockingly well. Netflix surprised Wall Street on Wednesday with their quarterly proft after they added almost 4 million customers in the US and abroad. Their shares soared 35% higher in after-hours trading.

 Expanding into Scandinaviafrom October to December, Netflix actually warned investors that it was likely there would be a loss during this period. They underestimated the impact that the busy holiday season would have on their sales, however. They reported $8 million in net income for the fourth quarter and revenue rose 8% to $945 million from the same quarter a year earlier.

 As Netflix CEO Reed Hastings explained, “We just saw tremendous growth over the holidays.”

Wal-Mart Has Big Plans This Decade

Posted on by Scott Hodges

Wal-Mart has big plans for the next decade. They have their sites on $50 billion in US-made products that they hope to buy over the next decade to help boost the US economy. As the largest private employer in the US, they plan to hire 10,000 newly discharged veterans over the next five years as well.

As Terry Lundgren, chief executive at Macy’s Inc. said about the plan to invest in American goods, “We would all love to do that, the customer will not pay more.”

While some are looking favorably on Wal-Mart’s plan, others have a more critical interpretation of their efforts. Some have criticized Wal-Mart, however, for not paying its workers enough and for selling too many products from countries like China. Wal-Mart, however, claims that approximately two-thirds of the goods that it buys for its stores come from the US.

Starting on Memorial Day in May, Wal-Mart has said that it plans to hire 100,000 US veterans, a move that is supported by First Lady Michelle Obama.  As Wal-Mart US Chief Executive Bill Simon said, “We’ve developed a national paralysis that’s driven by all of us waiting for someone else to do something.  But if we’re waiting on government, we’re waiting on a process that can’t act with the same speed as business.” They plan to offer a job to any honorably discharged veteran within the first year after active duty.