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With Moto X, Google Enters a Crowded Marketplace

August 1, 2013 by

After lackluster results selling devices made by other companies, Google is giving hardware another try — this time with a smartphone made by a company it owns. On Thursday, Motorola Mobility, the handset maker Google bought last year for $12.5 billion and then retooled, introduced the Moto X, the company’s first major device since the deal.

The phone has all the standard features expected of today’s top smartphone, with a twist: the ability to control the phone by talking to it, without lifting a finger.

The stakes are big for Google, and not only because of the high price that it paid for Motorola. Google is enormously profitable, but its growth is slowing because of lagging ad sales. Finding success with the new phone could lead to a new source of revenue and a way to get more users to view the company’s ads.

The company has been aggressive in absorbing Motorola. It put a former top executive, Dennis Woodside, in charge of Motorola, laid off thousands of Motorola workers and formed a new team with many employees from its fiercest competitors, including Apple, Samsung and Amazon. A major marketing effort is expected for the Moto X.

“I think we’ve created an awesome company,” said Iqbal Arshad, Motorola’s senior vice president of global product development. “And Moto X represents who we are.”

Still, sales could be an uphill climb. The phone, decked out with multiple processors, sensors and voice controls, is landing squarely in the brutally competitive market for high-end smartphones. And Google has a lot to prove before it is taken seriously as a hardware maker.

Motorola’s executives contend they have something special with the Moto X, which will be sold by all the major American phone carriers beginning in late August or early September. It has a 4.7-inch touch screen, which puts it right between the smaller iPhone 5 and the larger Galaxy S4 from Samsung. And it has a sophisticated camera and high-speed connections.

But what executives hope makes the Moto X stand out is its voice command capabilities — like continually listening for a user’s voice and quickly reacting to commands. Saying “O.K. Google, now find me my way home” will quickly pull up a Google map with directions to a user’s house, for example. The phone learns the voice of its owner and responds only to it. Some people might find this creepy, but it is a feature that a user must turn on voluntarily.

Google executives have long talked about building computers that are so integrated into our space that we can ask them to do things without lifting a finger. The Moto X is a big step in that direction.

Mr. Arshad said the company had to develop a new computing system, X8, to make Moto X work well. One low-powered processor in the phone is devoted to processing natural language. Another low-powered processor is dedicated to detecting movements of sensors — two twists of the wrist will open the phone’s camera, for example. The design of the computing system allows the phone to constantly listen for the user’s input and quickly respond without constantly draining the battery, he said. (The phone’s battery is supposed to last 24 hours handling various tasks.)

“We want to change the way people call, we want to change the way people search and we want to change the way people navigate,” Mr. Arshad said. “That’s what touchless control enabled you to do. So we had to design a mobile computing system to do that.”

Still, as other device makers have learned, it takes more than snazzy features to gain traction in the handset business. Samsung and Apple dominate the market, and some Asian manufacturers like Huawei and ZTE are selling low-cost smartphones and quickly gaining ground in economically disadvantaged markets.

Tero Kuittinen, a telecom analyst at Alekstra, a mobile diagnostics firm, said it was bad timing for Google to be competing in the high end of the smartphone market. The smartphone business is still expanding — in the second quarter this year, it grew 52 percent compared with last year, according to the research firm I.D.C. But most of that growth is coming from manufacturers offering cheap smartphones in emerging markets, he said.

Claire Cain Miller contributed reporting.

Article source: http://www.nytimes.com/2013/08/02/technology/with-moto-x-google-enters-a-crowded-smartphone-market.html?partner=rss&emc=rss

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New Openness From Chinese Telecom Giant

March 4, 2013 by Leave a Comment

The simple question — How old are you? — would not faze the top executive of a Western company. But Ryan Ding is not a typical corporate leader.

Mr. Ding is the chief executive of the telecommunications carrier network equipment business at Huawei, one of biggest and most successful international companies in China. Last week, he was the company’s face at the Mobile World Congress, the industry’s biggest event in Europe.

For any other company, this might be considered business as usual. But Huawei, like many Chinese concerns, has offered scant access to its decision-makers while the country has become the engine of the world’s economic growth.

At the telecommunications convention, Mr. Ding was working the crowds and taking on his rivals, Hans Vestberg, the Swedish chief of Ericsson, and Rajeev Suri, the head of Nokia Siemens Networks. He was also, uncharacteristically, speaking with journalists.

“We hope that the more people know about Huawei, the more it will help us,” Mr. Ding said through an interpreter in Huawei’s crowded exhibition stand. “It is certainly a positive influence and help with our global business when we are open towards the government, media, customers and the general public.”

For Mr. Ding, a spry, 43-year-old, for Huawei and perhaps for China, now is the time to tell the company’s story, instead of letting others do it for them.

That is a priority for Huawei, which has been virtually shut out of the U.S. market, the world’s biggest for telecommunications equipment, because lawmakers are concerned about its links to the Chinese government and military. A recent spate of hacking incidents tied to the military has not helped its cause.

Huawei denies that it is subsidized by the Chinese government and that its equipment poses a threat. The company says the U.S. blockade, encouraged last year by a congressional committee, is trade protectionism.

Mr. Ding, born Ding Yun, grew up in Beijing and has worked for Huawei, which is based in Shenzhen, near Hong Kong, for 17 years. By company standards he is an elder — Huawei’s 40,000 workers in Shenzhen average 27 years of age.

Mr. Ding oversees Huawei’s business of selling network equipment to telephone operators, its biggest enterprise, which generated $25 billion in sales in 2012, according to unaudited figures, and employed 80,000 people. Mr. Ding started out as an engineer at Huawei, honing designs for telephone switches, the industry’s bread-and-butter hardware at the time. When he was hired, Huawei employed 2,000 people. Last year, the company tallied about 150,000 around the world.

Over a decade, Mr. Ding’s fortunes rose with Huawei’s, and in 2005 he was appointed president of its newly consolidated core network group, a business created from the merger of its landline and wireless divisions. Under his leadership, Huawei developed one of its most successful products, the mobile soft switch, which has played a large role in the company’s pursuit of Ericsson, the industry leader, and in Mr. Ding’s rise within Huawei.

In a phone network, the switches direct calls to their intended destinations. Huawei’s soft switch for the first time relied more on software than on hardware, allowing operators to configure networks on the go as they added customers. In the industry, the price of switches is linked to an operator’s size, with licenses sold for every customer using a switch. Mr. Ding’s team sold licenses in perpetuity, letting operators avoid recurring charges common at the time.

Operators snapped up Huawei’s switches. Currently, the calls of three billion consumers around the world are routed through Huawei switches, the company said.

“The soft switch was one of the most-successful products ever for Huawei,” said Christophe Coutelle, the marketing director in Huawei’s core network group.

The product helped catapult Huawei, which began by reselling telephone switches in rural China in 1987, to become the world’s No. 2 maker of telecommunications gear behind Ericsson. The steep upward trajectory has forced Huawei to grapple with rapid growth, and Western demands for openness.

Gradually, Huawei has responded by opening up, accommodating demands for greater transparency as it conquers Western markets.

Article source: http://www.nytimes.com/2013/03/04/technology/new-openness-from-chinese-telecom-giant.html?partner=rss&emc=rss

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Tata Empire Picks Successor to Longtime Leader

November 24, 2011 by Leave a Comment

The successor to Mr. Tata, Cyrus P. Mistry, will take over as chairman in December 2012 after serving as deputy chairman for a year, instantly catapulting him from a relatively little-known executive to the head of a sprawling global empire. Tata Sons, based in Mumbai, is the holding company for an $83.3 billion group that includes companies engaged in industries including software, cars, steel and the Taj hotel chain.

Mr. Mistry is a member of the committee that had been searching for Mr. Tata’s successor and a member of the board of Tata Sons, which is not listed on the stock exchange, though many of its subsidiaries are.

In addition, Mr. Mistry is the managing director of Shapoorji Pallonji Group, a real estate and construction business that owns about 18 percent of Tata Sons, more than any other noninstitutional investor. About two-thirds of Tata Sons is owned by charitable trusts established by the Tata family. Mr. Mistry, 43, has said that he will step down from his position at Shapoorji to avoid any conflict of interest.

A spokesman for Tata Sons, Debasis Ray, said Mr. Mistry recused himself from the selection committee’s consideration of candidates once the four other members suggested him as a candidate for the job. Mr. Ray said he did not know when that suggestion was made. He said the committee, which was constituted in August 2010, met 18 times and considered candidates from within the group and outside.

Mr. Tata is often credited with reviving ailing businesses and turning Tata Sons into a global company by investing in software outsourcing and by acquiring foreign companies like Tetley, Jaguar Land Rover and Corus. He has been at the helm of the group since 1991.

Other potential candidates had included Indra Nooyi, an Indian native who heads PepsiCo in the United States; Arun Sarin, the former top executive of Vodafone of Britain; and Noel N. Tata, a stepbrother of Mr. Tata’s and an executive at the group.

One senior executive at the group, speaking on the condition of anonymity because he is not authorized to discuss the search, said the appointment might signal that Shapoorji Pallonji, which had long appeared to be a silent investor in Tata, now wanted to take a more prominent role in the operations of the group. “We have somebody with a large equity stake in Tata Sons exercising his stake,” this executive said.

This executive and others said it was not surprising that the committee picked Mr. Mistry, who is not widely known even among close watchers of corporate India. He has a good relationship with Mr. Tata, which was always seen as an important qualification for the job, given the respect he commands within the group and across Indian business and political life. Moreover, Mr. Tata is expected to remain chairman for a transition year.

“You would be surprised how quickly those things can be acquired,” the Tata executive said about a high public profile in India and the world.

Alan Rosling, who once served on the Tata Sons board with Mr. Mistry, called the appointment a “wise choice,” adding, “He grasps issues very fast.” Mr. Rosling is now chairman of Kiran Energy, an Indian solar power producer. “He has, I think, significant character,” he said of Mr. Mistry. “I have seen him argue for something he believes in and that may not be the mood of the house, as it were.”

The Tata and Shapoorji Pallonji businesses were both founded by family members who are Parsi. The Parsis are an ethnic group that traces its heritage to modern-day Iran but has been in India for centuries. The families that founded the two business groups are related to each other through marriages between their descendants.

Gurcharan Das, an author and former head of Procter Gamble’s Indian business, said many in corporate India had hoped that the selection committee would appoint a professional who was not necessarily a member of one of the families associated with the companies.

“One would truly have liked to have an outstanding professional, that would have been an ideal scenario,” he said. “And they did a search that raised all of our expectations.”

This article has been revised to reflect the following correction:

Correction: November 23, 2011

An earlier version of this article incorrectly said Noel N. Tata is Ratan N. Tata’s cousin, rather than his step-brother.

Article source: http://www.nytimes.com/2011/11/24/business/global/tata-empire-picks-successor-to-longtime-leader.html?partner=rss&emc=rss

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Euro Deal, if Vague, Draws Positive First Reaction

October 27, 2011 by Leave a Comment

The markets rallied strongly on the news of the accord, which was achieved after nearly 10 hours of negotiations by European leaders, finance ministers and bankers at an emergency meeting in Brussels. Stocks rose 6 percent in France, 5.1 percent in Germany and 3.3 percent in Hong Kong. On Wall Street, shares surged 2 percent at the opening bell. The value of the euro, which cost $1.32 a few weeks ago when anxiety over its future stability was worsening, surged to $1.40 in European foreign exchange trading on Thursday.

Hopes were also boosted by the possibility that China, which has amassed enormous amounts of capital in its historic economic climb over the years, would play an active role in helping with Europe’s financial rescue. President Nicholas Sarkozy of France spoke to his Chinese counterpart, Hu Jintao, on Thursday, although there was no word on precisely what was discussed, and the top executive of the euro zone’s emergency bailout fund was scheduled to visit China on Friday.

Still, the optimism and relief that washed over the markets in the aftermath of the European announcement of the package obscured a host of technical questions about its implementation that have yet to be addressed. How those questions are dealt with, European officials and bankers said, could determine whether the Europeans have truly begun to restore confidence in the battered euro currency zone.

The accord was reached just before 4 a.m. after difficult bargaining. The severe reduction would bring Greek debt from its current level of 180 percent of gross domestic product down to 120 percent by 2020, a still enormous figure but more sustainable for an economy driven into recession by austerity measures.

The leaders agreed on Wednesday on a plan to force the Continent’s banks to raise new capital to insulate them from potential sovereign debt defaults, and to more than double the lending capacity of their emergency bailout fund to $1.4 trillion in order to better protect Italy and Spain.

“The results will be a source of huge relief to the world at large, which was waiting for a decision,” Mr. Sarkozy said.

After the buildup to this summit meeting, failure here would have been regarded as a disaster, and there was a clear sense among the leadership that they had averted potential catastrophe. “I believe we were able to live up to expectations, that we did the right thing for the euro zone,” Chancellor Angela Merkel of Germany said. “This brings us one step farther along the road to a good and sensible solution.”

While the plan to require banks to raise new capital was generally approved without difficulty — banks will be forced to raise about $150 billion to protect themselves against losses on loans to shaky countries like Greece and Portugal — the negotiations over the Greek debt were difficult.

In the face of considerable pressure from Europe’s leaders, the banks had been resisting requests that they voluntarily accept a loss of about 50 percent on their Greek loans, far more than the 21 percent agreed to previously. But after months of denying that Greece would have to restructure its large debt, which was trading at 40 percent of face value, European leaders forced the much larger reduction, known as a “haircut,” on the banks, while the International Monetary Fund promised more aid to Greece.

Germany had taken a tougher stance than France with the banks. Mrs. Merkel was willing to think about imposing an involuntary write-down on the private sector, but Mr. Sarkozy remained worried about the consequences on the markets and the banking system.

In a statement, Charles Dallara, managing director of the Institute of International Finance, which represents the major banks, said he welcomed the deal. He called it “a comprehensive package of measures to stabilize Europe, to strengthen the European banking system and to support Greece’s reform effort.”

In a meeting described as crucial for the fate of the euro zone, the leaders had been trying to restore market confidence in the euro and in the creditworthiness of the 17 countries that use it.

Reporting was contributed by Jack Ewing from Frankfurt, David Jolly from Paris and Rachel Donadio from Athens.

Article source: http://www.nytimes.com/2011/10/28/world/europe/europe-in-accord-on-basics-of-plan-to-save-the-euro.html?partner=rss&emc=rss

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DealBook: Google’s Big Bet on the Mobile Future

August 16, 2011 by Leave a Comment

Sanjay Jha, the chief executive of Motorola Mobility, who has been responsible for turning around the company, will remain as the division's top executive.Tim Boyle/Bloomberg NewsSanjay Jha, the chief executive of Motorola Mobility, who has been responsible for turning around the company, will remain as the division’s top executive.

Google, Motorola and Mobile

Both companies have met with both successes and struggles as they adapt to and influence a changing market for mobile phones.

Google made a $12.5 billion bet on Monday that its future — and the future of big Internet companies — lies in mobile computing, and moved aggressively to take on its arch rival Apple in the mobile market.

The Silicon Valley giant, known for its search engine and Android phone software, rattled the tech world with its announcement that it would acquire Motorola Mobility Holdings, allowing it to get into the business of making cellphones and tablets.

The acquisition, Google’s largest to date and an all-cash deal, would put the company in head-to-head competition with its own business partners, the many phone makers that use Android software, as well as with Apple.

The deal, which requires regulatory approval, would also give Google a valuable war chest of more than 17,000 patents that would help it defend Android from a barrage of patent lawsuits.

“Computing is moving onto mobile,” Larry Page, Google’s chief executive, said in an interview. “Even if I have a computer next to me, I’ll still be on my mobile device.”

The effect of a Google-Motorola Mobility merger on consumers is unclear. But in the past, Google has shaken up the mobile industry by pushing cellphone carriers to open up their networks, and by licensing its Android system at no charge, increasing competition. With the Motorola deal, analysts said, Google may be able to accelerate innovation in smartphones and tablets.

“For Google, it’s important for them to make sure that the mobile space is not dominated by one company, that being Apple,” said Steve Weinstein, an analyst at Pacific Crest Securities. By acquiring Motorola, he said, they “can drive down costs and create a product that is pioneering with Google services around it.”

The proposed deal would have ramifications across the tech industry, giving strength to Motorola at a time when Research in Motion and Nokia are faltering.

Google said it would continue to license its Android system to other smartphone makers, like HTC, Samsung and LG. “Many hardware partners have contributed to Android’s success, and we look forward to continuing to work with all of them,” wrote Mr. Page in a company blog post announcing the deal.

Nonetheless, while many of Google’s partners issued positive statements on Monday, analysts suggested that the acquisition would create tension because Motorola would be in an obviously favored position. That could push other phone makers into the arms of Microsoft, which offers a rival operating system.

“If you woke up today and you are one of Google’s hardware partners, the hair just set up on the back of your neck,” said Colin Gillis, an analyst with BGC Partners. “If you’re an Android partner, you may start considering the Windows platform.”

Mr. Page addressed those concerns by saying that Motorola would effectively operate as a stand-alone business. Sanjay Jha, the chief executive of Motorola Mobility, who has been responsible for turning the company around, will remain as the unit’s top executive.

Federal regulators are already investigating Google’s dominance in several areas of its business, and the planned merger will prompt additional antitrust review. But legal experts said it seemed unlikely that the deal would be blocked because the two companies are in separate, if related, businesses so a combination would not increase Google’s share of either market.

Phones running the Android system have become increasingly popular, accounting for 43.4 percent of smartphones sold in the second quarter, according to Gartner research. But many customers have complained that the phones can be confusing to use.

That is because Google works with 39 phone makers that use different versions of Android across their platforms, resulting in variable performances, said Richard Doherty, research director for Envisioneering Group, a market research and consulting firm.

Apple, by contrast, controls its entire product — device and software. With the Motorola acquisition, Google, too, could exert greater control over its products.

But it is far from clear that Google, a $179 billion business largely built on sophisticated search algorithms and online advertising, can transform itself into a device maker. The business is costly, and the margins are slim, said Jordan Rohan, an analyst with Stifel Nicolaus.

“If you have the best-selling phone, you can make a lot of money,” he said. “What’s not clear to me is whether phones that sell a few million units make a lot of money.”

The chief of Android, Andy Rubin, even proclaimed, in 2009, that the company was simply “not making hardware.”

By becoming a phone maker, Google may be able to increase its clout with wireless carriers, which control pricing and distribution of cellphones.

“This is an opportunity for Google to jumpstart the market, in pricing and innovation,” said Avi Seidmann, an information systems professor at the University of Rochester.

Google’s deal for Motorola comes just weeks after it lost a bid to a consortium led by Apple and Microsoft for 6,000 patents from Nortel, a Canadian communications company that filed for bankruptcy in 2009. For Google, which faces an increasing number of patent infringement claims against its Android system, the loss was a major blow.

David Drummond, Google’s chief legal officer, later accused the winning bidders of engaging in anticompetitive behavior, describing the deal as “a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.” Patent fights are common in the technology industry and come with high stakes. Companies are often required to pay licensing fees to continue using technology after losing infringement claims and are sometimes blocked from selling their products.

But while Mr. Drummond was complaining, he and other executives were working on the Motorola deal.

“The best way to fight a big portfolio of patents is to have your own big portfolio of patents,” said Herbert Hovenkamp, a law professor at the University of Iowa. “That appears to be what Google is doing here, arming itself with patents to be able to defend itself in this fast-growing market.”

Google’s bid for Motorola is an extension of what Eric E. Schmidt, the company’s former chief executive, said last year was a “mobile first” strategy. Following that approach, Google has expended millions of dollars and considerable engineering power into developing a broad array of mobile-centric services. But the bid for Motorola is its strongest move in that area.

“This is an emphatic exclamation point that Google is a mobile company,” said Ben Schachter, an analyst with Macquarie Capital. “It shows how important Android is to Google.”

Under the terms of the deal, which is expected to close by early 2012, Google will pay Motorola Mobility’s shareholders $40 a share, a 63 percent premium to Friday’s closing price. Although Motorola had casual talks with prospective suitors earlier this year, the sale of the Nortel patents at a $4.5 billion price tag encouraged Motorola’s directors to pursue a sale more actively, according to people briefed on the matter. Last week Google, led by Mr. Page, emerged as the frontrunner, and by Sunday, Motorola’s board gave the green light.

Shares of Google fell 1.16 percent on Monday, to $557.23, while shares of Motorola Mobility added 55.78 percent, to $38.12.

Shares of Nokia and Research in Motion surged, too, amid speculation that they are takeover targets as well. Nokia, which recently entered a comprehensive partnership with Microsoft, led the gains, with shares rising more than 17 percent.

Steve Lohr, Verne G. Kopytoff and Michael J. de la Merced contributed reporting.

Article source: http://dealbook.nytimes.com/2011/08/15/googles-big-bet-on-the-mobile-future/?partner=rss&emc=rss

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Bits: Top Executive at H.P. Steps Down

June 14, 2011 by Leave a Comment

Ann Livermore, a fixture at Hewlett-Packard for nearly three decades, will step down from leading the company’s enterprise business as part of a broader management overhaul.

Ann LivermoreTony Avelar/Bloomberg NewsAnn Livermore

The shake-up, announced on Monday, comes as Leo Apotheker, H.P.’s chief executive, tries to reinvigorate the company after a series of disappointing financial forecasts.

Ms. Livermore, who joined H.P. out of graduate school and is one of the most prominent women executives in the technology industry, will become a board member, H.P. said. She will continue to serve in her current management role until a replacement is found.

Ms. Livermore, 52, had long been considered a potential chief executive at H.P. in the wake of its many leadership changes in recent years. However, she was passed over on each occasion, most recently when Mr. Apotheker was hired last year.

H.P. also said that Peter Bocian, chief administrative officer, has left the company. His position has been eliminated.

Randy Mott, chief information officer, is also leaving, although H.P., is seeking a successor.

“In our ongoing effort to accelerate our progress in executing our strategy, we will continue to make the necessary changes that streamline our operations, drive focus and agility, and position us for success,” Mr. Apotheker said in a statement.

Mr. Apotheker is trying to lift H.P., the largest technology company by revenue, amid declining consumer computer sales and a slumping services business. His strategy, which he unveiled in March, is to build up the company’s tiny software business and expand into the cloud — a term used to describe products and services delivered online.

Article source: http://feeds.nytimes.com/click.phdo?i=48f4eeabebd912103b17a37c268b78f2

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