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In the Real World, Will the Jobs Plan Make a Difference?

September 9, 2011 by Leave a Comment

This year alone, the biggest job losses in the private sector have occurred in retailing, “probably because of Borders,” Colleen Madden, a spokeswoman for Challenger Gray Christmas, a global outplacement firm that tracks employment, said in reference to the bookstore chain’s folding.

    Other industries with high job losses are aerospace, financial services and pharmaceutical companies, she said. Drug makers had the most job cuts in 2010, and automakers had the most cuts in 2009, she said.

Interviews with a few business owners provided a mixed reception to Mr. Obama’s proposals on Friday. Below is a sampling of their reaction and their general view of the hiring landscape.

Computers and Electronics

Jen-Hsun Huang, the chief executive of the chip maker Nvidia, said, “On the bleeding edge of technology, it wouldn’t make much difference.”  

Nvidia, which designs chips for smartphones and tablets and graphics chips for personal computers,  has about 7,000 employees. About 5,000 of those are in the United States, 1,000 in China and another 1,000 in India. Most of the people are engineers and programmers who design the chips that are made by another company in Taiwan. Because of the growth in the smartphone and tablet market, the company expects to add about 20 percent more people overall.

“I know we are growing faster in the U.S.,” he said. The reason, he explained, was the need for close collaboration. “The work we do — creative work and innovation work — there is a benefit to being close to each other.”

He said the incentives won’t cause the company hire any more people or change the kinds of people it hires. “The people we hire tend not to be out of work for six months,” said Mr. Huang. The company tends to be recruiting for recent graduate s of the top engineering schools.  “The guys we hire are like sports stars.”

The Food Industry

Michael J. Potter, the founder and president of Eden Foods, a natural foods company based in Michigan, said that he planned to hire as many as 11 new employees over the next year — but because sales are growing, not because of federal incentives. Mr. Potter said that the company, which produces whole grains, canned beans and other foods, has 168 employees, about the same number that it had a year ago. He said his company is also improving the way it handles some areas of its business, including sales, marketing and accounting, which will require additional employees. He said he would also be adding some jobs in a renovated manufacturing plant.

“We’re a positive story, we’re hiring,” Mr. Potter said. “These are not seasonal jobs. These are full-time, solid career positions.”

Mr. Potter said that he was skeptical of the president’s proposals and that he found some of them vague, such as the incentive to hire the long-term unemployed, which he said would not influence his decisions. “We’re developing an organization, so we’re looking for good people,” he said. “I can’t imagine that the tax incentive is going to be worth anything but a pittance” compared to the value of finding productive employees.

Retailing

Macy’s, which announced last month its most successful second quarter in a decade, said hiring was up as a result.

“The nature of our business and our stores is that it fluctuates with the business. When sales are growing, which they are, we’re adding people in the stores,” said Jim Sluzewski, a Macy’s spokesman.

Mr. Sluzewski said the most recent concrete figures available are from April, when Macy’s had 166,000 employees, up from 161,000 in April 2010, but it had continued to add workers since then. He said the company was continuing with its plan, announced in January, to hire 3,500 dot-com workers over the next two years. 

“If our sales grow, we need more people to fuel the sales,” he said. Energy Firms

Some energy executives said they were far more concerned about government regulation than the president’s proposals.

Duff Wilson, Stephanie Clifford, Stuart Elliott and William Neuman reported from New York. Clifford Krauss reported from Houston.

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As PCs Wane, Companies Look to Tablets

August 20, 2011 by Leave a Comment

The announcement on Thursday by Hewlett-Packard that it was considering offloading its PC business, even though it is the undisputed worldwide market leader, was a clear sign of the difficulties.

If H.P. goes through with the idea, it would follow I.B.M., an early PC maker, which was one of the first to recognize the long-term problems and, in 2005, sold its business to Lenovo, a Chinese company. Other American makers like Compaq (acquired by H.P.), Gateway and Packard Bell were absorbed by others or just faded away. Depending on how H.P. sheds the unit — it could sell or spin it off as a separate company — only two American PC makers would remain.

One of them, Dell, struggles for every percentage point of market share.

The other, Apple, prospers. And the reason it does highlights the shift from a PC-centric era to one dominated by smartphones and tablets. H.P., Dell and, indeed, every PC maker worldwide, has been unable to make a tablet consumers feel they must have. At the same time H.P. said that it might spin off PCs, it killed off its tablet, the TouchPad, after just a few weeks on store shelves.

Computer makers are expected to ship only about 4 percent more PCs this year than last year, according to IDC, a research firm. Tablets, in contrast, are flying off store shelves. Global sales are expected to more than double this year to 24.1 million, according to Forrester Research. More than two-thirds of those tablets, however, are sold by Apple. Sales of its iPad pulled in $9 billion in just the first half of the year, or 30 percent more than all of Dell’s consumer PC business in the same period. The joke in Silicon Valley is that there is no tablet market, only an iPad market. (That was also true of Apple and the iPod market.)

The other observation that is no joke: Apple is the only maker with strong PC growth. Spending on desktops and laptops grew 16 percent in the latest quarter, while Dell’s consumer product sales increased 1 percent.

“It’s definitely weighing on the computer makers, and it is something that will weigh on them for some time,” said Louis Miscioscia, an analyst with Collins Stewart.

“The tablet effect is real,” said Leo Apotheker, H.P.’s chief executive, in an interview on Thursday, acknowledging that the TouchPad had failed to live up to expectations and that it would have cost too much to compete. “It’s very different from where the business was going 10 years ago,” Mr. Apotheker said.

On Friday, H.P.’s shares fell 20 percent in reaction to his plans.

Michael S. Dell, Dell’s chief executive, took the opportunity to poke fun at the prospect of H.P. unloading its PC unit by saying in a message on Twitter that “they’re calling it a separation, but it feels like a divorce.” Following up with more sarcasm, he said, “If HP spins off its computer business … maybe they will call it Compaq.”

Mr. Dell was clearly enjoying the moment, but his company faces the same market forces as H.P. Its overall PC business has been flat. Recently, Dell has pared back some of its consumer products, including a 5-inch Streak tablet, while keeping a 7-inch tablet. Together, they eked out barely 1 percent of the market, according to ABI Research.

Like H.P., Dell is pushing its enterprise business, which has higher margins. But David Johnson, Dell’s senior vice president of corporate strategy, said his company had no plans to follow in H.P.’s footsteps and split off its PC business. “We have no plans to change our strategy,” he said.

Tablets remain the hope of other PC makers and phone makers. By next year, tablet sales in the United States will outpace those of netbooks, the mini-laptops people use to surf the Web, according to Forrester Research. Netbooks were considered a salvation for the PC industry when they were introduced a few years ago, but they have since fallen out of favor with consumers.

But buyers see little need to buy any tablet other than iPad, even if it is slightly more expensive than some of its rivals, analysts said.

“The performance still isn’t there for a lot of them,” said Richard Doherty, research director for the Envisioneering Group, a market research and consulting firm. “And it’s not just the product, it’s the ecosystem behind it.”

For that matter, selling tablets is no easier for the smartphone makers. Motorola Mobility, which Google said this week that it would buy, got nowhere with its Xoom. Research in Motion entered the tablet market this spring with a long history of building mobile devices. Still, the company has struggled to get consumers to buy its tablet, the PlayBook, which it introduced earlier this year.

RIM says it shipped 500,000 PlayBooks during its last fiscal quarter. Kevin Burden, a vice president at ABI Research, estimated that only 40 to 50 percent of those tablets found buyers.

Shoppers were not charmed by the PlayBook’s inability to directly check corporate e-mail — they have to connect wirelessly to BlackBerry phones — and lack of applications.

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Apple Sues Samsung, Says Stop Copying Us

April 19, 2011 by Leave a Comment

Apple is one participant in a web of litigation among phone makers and software firms over who owns the patents used in smartphones, as rivals aggressively rush into the smartphone and tablet market which the U.S. firm jumpstarted with iPhone and iPad.

Nokia and Apple have sued each other in numerous courts and as recently as last month Nokia filed a complaint with the U.S. trade panel alleging that Apple infringes its patents in iPhones, iPads and other products.

Samsung is one of the fastest growing smartphone makers and has emerged as Apple’s strongest competitor in the booming tablet market with models in three sizes but it remains a distant second in the space.

“If Apple fails to fend off Android, it will within a year or two find itself in a situation like Research in Motion, even if at a higher level (initially),” said Florian Mueller, a technology specialist and blogger on patent battles.

“Apple has realised this already as its new lawsuit against Samsung shows, but given what’s at stake, I think Apple would have to do much more than this. It would have to sue more Android device makers and over more patents.”

Samsung’s Galaxy products use Google‘s Android operating system, which directly competes with Apple’s mobile software. However, Apple’s claims against Samsung focus on Galaxy’s design features, such as the look of its screen icons, the lawsuit said.

The lawsuit, filed on Friday, alleges Samsung violated Apple’s patents and trademarks.

“This kind of blatant copying is wrong,” Apple spokeswoman Kristin Huguet said in a statement.

Apple is bringing 16 claims against Samsung, including unjust enrichment, trademark infringement and 10 patent claims.

“…Samsung has made its Galaxy phones and computer tablet work and look like Apple’s products through widespread patent and trade dress infringement… By this action, Apple seeks to put a stop to Samsung’s illegal conduct and obtain compensation for the violations that have occurred thus far,” Apple said in the court document.

Samsung’s shares closed up 0.9 percent after slipping to their lowest level in one month in a broader market down 0.7 percent.

Samsung said it would respond to the legal action “through appropriate legal measures to protect our intellectual property.”

“Samsung’s development of core technologies and strengthening our intellectual property portfolio are keys to our continued success,” it said in a statement.

Samsung faces the challenge of moving beyond being a hardware company, clever at copying ideas, to becoming more creative, better adept at software, at a time when consumer gadgets are getting smarter all the time.

It has yet to come up with the kind of original, iconic, market-leading products that powered brands such as Apple’s i-series or Sony Corp‘s Walkman. Nor has it taken the kind of initiatives in software that Google and Apple did to thwart Microsoft.

FORMIDABLE RIVAL

Apple CEO Steve Jobs has criticised Samsung and other rivals in presentations of new products or technology debates. Analysts say Samsung’s response to this has been muted, partly because Apple was Samsung’s second-biggest customer last year after Sony.

Apple brought in around 6.2 trillion won (3.5 billion pounds) of sales to Samsung in 2010 mainly by purchasing semiconductors, according to Samsung’s annual report.

John Jackson, an analyst with CCS Insight, said Samsung is essentially Apple’s only real tablet competitor at this stage. “It’s clear that they do not intend to let Apple run away with the category,” Jackson said.

“This is more like a symbolic move by Apple that it is quite serious about rivals advancing and it is trying to hold back its close competitors,” said John Park, an analyst at Daishin Securities in Seoul.

“Samsung is unlikely to respond aggressively given that Apple is its core client in the component business,” Park said.

To better compete with Apple, Samsung redesigned within weeks its new 10.1-inch tablet, first introduced in February, to make it the thinnest in the category after Apple set the trend with its iPad 2.

The global smartphone market is expected to grow 58 percent this year and Android is set account for 39 percent of the market, while the tablet market is likely to quadruple to 70 million units, according to research firm Gartner.

Apple’s iPad will still dominate, controlling more than half of the tablet market for the next three years, but its share is seen gradually declining to 47 percent in 2015 from 69 percent this year, giving way to Android devices.

The case in U.S. District Court, Northern District of California is Apple Inc. v. Samsung Electronics Co. Ltd. et al, 11-1846.

(Additional reporting by Tarmo Virki in HELSINKI and Miyoung Kim in SEOUL; Editing by Anshuman DAga)

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