Original Story: edition.cnn.com
A woman walks down the street, pausing and backtracking erratically. She clutches her phone in front of her, furiously jabbing at the screen. Suddenly, to her right, another person appears, enacting the same strange dance of connection between his legs, his eyes and his phone.
Across the street, three individuals converge, each holding their phones in front of them. The woman overhears them say, "Charmander." She immediately stops and prepares her Poke Ball for attack. Such is the life of a Pokemon Go player, a new alternate reality experience from Niantic Inc. and the Pokemon Co., a division of Nintendo. The game allows players to hunt for strange hidden creatures, capture them and compete for territory in a digital version of the real world.
Alternate reality games augment and enhance the world around us, allowing players to leverage real world environments to interact with a digital experience. They have existed for years, in a variety of formats, often advertising large intellectual properties such as Halo. And more recently, an expansion in wearable devices, such as the Apple Watch, means we supplement our daily lives with computer-driven data and feedback around where we walk, whom we engage with and what we look at.
But this most recent alternate reality game has inspired a new wave of social commentary. One outlet claims that Pokemon Go is the future of social networking, a success that will revolutionize the world in a mere matter of time. Others decry it as crass commercialization, as a failure of the form to be anything more than a way to merchandise humanity's love of Pokemon.
However, Pokemon Go is neither the crystallized, final form of an alternate reality game, nor is it a harbinger of the apocalypse. Instead, it is a significant, be it flawed, step forward in an emerging medium that will eventually infiltrate the way we all engage with, discover and consume media.
Of course, the game isn't perfect. It has several show-stopping bugs, and its human interface is under-designed, making actual play difficult and frustrating for many potential users. It is not a repeatable design, as it leverages a vast amount of information gathered by Niantic with its first product. All of the physical locations the game uses existed in a database before they built the game. And despite that massive database, those real world locations are minimally employed. Most player time is spent in-app, not in a mixed reality provided by the app enhancing the world around them.
But it is also a glorious success -- proof that a large percentage of the smartphone-wielding audience is interested in an experience that lets them game in the world around them, that integrates with their daily lives and that drives social interactions with fellow travelers across cultural identifiers. It proves that these products can be self-sustaining, not purely marketing spends but actual cultural products that people will use and spend time and money with.
To maintain this audience, to grow it, to keep players returning to the game, Pokemon Go will need to create a method for different types of players to engage with the game. Currently it serves one type of player -- a player who can invest large amounts of time and attention to the game.
Players with more limited time and attention to invest do not have a way to engage lightly and generate in game value that drives them to socialize and engage with other players. Likewise, the hard-core gamer has no deep game to invest strategy, time and social organization. Serving these cultural groups and others will build an audience, keep players engaged and strengthen connections from one person to another.
This pyramid of players and networks between many different cultural groups are the future of alternate reality games and the future of digitized entertainment. In the emerging field of experience design education, we prepare students to tell stories in a world where technology and mediums are important tools, but are just that -- tools that provide a palette, a platform or a unique twist for crafting new experiences for new players
When Pokemon Go finishes maturing, when the creators learn how to serve not just an audience with an abundant amount of free time, but the parents of those players, a community in an old-age home and a group of commuters on a bus, then it will have revolutionized the way we consume media. When developers determine how to leverage properly our world, the digital world and different player motivations across societies, they will change the way we experience and tell stories.
Until then, though, catching Rattata on your walk to work is surprisingly and gratifyingly fun.
Business News Blog. Daily Business News and information on emerging issues influencing the global economy. Welcome to the Peak Newsroom!
Showing posts with label technology. Show all posts
Showing posts with label technology. Show all posts
Monday, July 18, 2016
Monday, March 16, 2015
SXSW TRIES TO CURB MAYHEM AFTER LAST YEAR'S TRAGEDY
Original Story: usatoday.com
AUSTIN — A transgender CEO explaining how artificial intelligence will one day bring back the dead. The latest medtech inventions. Movie stars mingling with dot-com execs. A robot petting zoo.
The 2015 SXSW music/film/interactive festival, which kicks off Friday, promises the usual blend of high-tech gadgetry, Austin weirdness, marquee glamour and, of course, hard-to-get-into parties showcasing big-ticket acts. Actors Russell Brand (who will unveil a documentary based on his life, BRAND: A Second Coming), Will Ferrell and Ryan Gosling are expected to make appearances. Snoop Dogg will keynote, and Jimmy Kimmel returns his show to Austin during the festival for the second year in a row. Trade show exhibit consultants assist clients on how to make the most of their trade show experience.
But this year's 10-day festival will also feature an undercurrent of change, as city officials and event organizers try to rein in the ever-growing event and cut down on the crushing crowds it spawns. Earlier this year, Austin officials announced they were reducing by about one-fourth the number of approved special-event permits during SXSW, effectively cutting down on the spontaneous street parties and open-air concerts that sprout around town.
The new rules were announced in the wake of the tragedy during last year's festival, when a driver fleeing police smashed through a barricade and into a crowd of concertgoers in downtown Austin, killing four and injuring nearly two dozen. The driver, Rashad Charjuan Owens, remains in jail on murder charges.
Some major brands, including Doritos and Subway, have announced they won't be returning this year. Doritos last year put on some of the biggest shows, including Lady Gaga and Ludacris. But event organizers have struggled with how to balance the sprawling number of unofficial parties — and the crowds they draw — with safety concerns and the event's core objectives of showcasing the best in tech, music and film. Use Exhibit Solutions at corporate events, seminars, conferences and special events to showcase your business.
'A VERY FINE BALANCING ACT'
"It's a very fine balancing act," said Hugh Forrest, head of the festival's interactive segment. "Our top priority is having a safe and user-friendly event for all our registrants."
The festival will still brandish some of the leading tech innovations, with an apparent focus this year on artificial intelligence. Martine Rothblatt, the transgender pharma tycoon and Sirius founder, will give a talk about her unique vision of the future and the robot version of her wife, while MIT's Hugh Herr will discuss how bionics are being used to replace limbs lost in war. Also, the event's first interactive robot "petting zoo" will allow viewers to interact and play with the latest in robot technology, such as the Bujold, programmed to search for survivors at destruction sites.
The opening of the 1,012-room JW Marriott Hotel downtown has allowed event organizers to nearly double the number of scheduled events at its Startup Village — from 112 last year to 213 this year. That's good news for the hordes of start-up entrepreneurs who descend upon Austin each year in hopes of being discovered, much the way Twitter announced itself at the 2007 SXSW and exploded into the tech world. E&E Exhibit Solutions can create efficient pop-up displays and large custom exhibits for your next trade show or event.
The founders of Keen Home, which creates tech devices that enhance home functions, such as heating and cooling, unveiled their concept at SXSW last year. Two months later, they closed on $1.52 million in seed money. They're headed back this year.
"It's a good amalgamation of all the leaders of the tech industry," co-founder Nayeem Hussain said. "You have all the right people listening."
Now in its 29th year, SXSW has become a huge benefactor not just to techies but to the city itself, last year pouring $315 million into the Austin economy and drawing more than 85,000 enthusiasts to the city. The festival also delivers a dose of culture to the city, showcasing local filmmakers and drawing movie moguls and recording artists. It's a far cry from the 700 attendees who showed up the inaugural year in 1987 to hear local music acts (interactive and film were added seven years later).
Filmmaker and longtime Austin resident Richard Linklater remembers the handful of attendees who wandered into the lobby of the Dobie Theater on the University of Texas campus two decades ago to watch the festival's first film awards ceremony. Today, SXSW has become a key destination for filmmakers, jostling with Sundance as the premiere U.S. film festival, he said.
"A lot of films were 'Sundance or bust' but that's not the case anymore," said Linklater, whose Oscar-nominated film, Boyhood, screened at SXSW last year. "There's something beautiful about 'SXSW or bust.' " He added: "It's grown up. It's fun to see it become a major festival."
But that growth has led to growing pains, mostly centered on the unofficial parties sponsored by huge brands such as Facebook, Comcast and Samsung. Those companies spend millions of dollars on top-tier acts — Jay Z teamed with Kanye West last year for a free Samsung-sponsored concert — but also cause crowd concerns.
RETHINKING INVOLVEMENT
This year's rule changes are making some corporations rethink their SXSW involvement. Jennifer Sinski, co-founder of RSVPster, a service that sends RSVPs to scores of unofficial parties around town for a fee, said she's noticed a change in the party landscape this year. Last year, her company counted about 600 unofficial parties around Austin during SXSW. This year, many of those parties are being toned down.
"More events are going into venues that are full-standing venues year round instead of trying to throw a party in a parking lot," she said. "That's a good thing. The quality of events have really improved."
Danielle Thomas, owner of Big Green House, an Austin-based marketing and events production firm that works with large brands during SXSW, said she's lost four "major clients" this year who have been event regulars for years and knows of six others also not returning. Some of those pulled out even before the city's rule changes were announced, pointing to a possible natural decline of the SXSW after-party scene.
More alarming are the number of venues that don't require a permit, such as the Austin Music Hall, which remained vacant less than a week out from SXSW, she said. Those spots typically are booked months in advance. Though striking, the trend toward fewer parties and smaller crowds is something many around Austin, including Thomas, have lobbied and hoped for for years — even though it'll mean less money for her business, she said.
"Things got bigger and bigger and bigger, and the city felt like it needed to step in," she said. "There's a good balance that can be struck. And maybe it has. Maybe that's exactly what's happening this year."
AUSTIN — A transgender CEO explaining how artificial intelligence will one day bring back the dead. The latest medtech inventions. Movie stars mingling with dot-com execs. A robot petting zoo.
The 2015 SXSW music/film/interactive festival, which kicks off Friday, promises the usual blend of high-tech gadgetry, Austin weirdness, marquee glamour and, of course, hard-to-get-into parties showcasing big-ticket acts. Actors Russell Brand (who will unveil a documentary based on his life, BRAND: A Second Coming), Will Ferrell and Ryan Gosling are expected to make appearances. Snoop Dogg will keynote, and Jimmy Kimmel returns his show to Austin during the festival for the second year in a row. Trade show exhibit consultants assist clients on how to make the most of their trade show experience.
But this year's 10-day festival will also feature an undercurrent of change, as city officials and event organizers try to rein in the ever-growing event and cut down on the crushing crowds it spawns. Earlier this year, Austin officials announced they were reducing by about one-fourth the number of approved special-event permits during SXSW, effectively cutting down on the spontaneous street parties and open-air concerts that sprout around town.
The new rules were announced in the wake of the tragedy during last year's festival, when a driver fleeing police smashed through a barricade and into a crowd of concertgoers in downtown Austin, killing four and injuring nearly two dozen. The driver, Rashad Charjuan Owens, remains in jail on murder charges.
Some major brands, including Doritos and Subway, have announced they won't be returning this year. Doritos last year put on some of the biggest shows, including Lady Gaga and Ludacris. But event organizers have struggled with how to balance the sprawling number of unofficial parties — and the crowds they draw — with safety concerns and the event's core objectives of showcasing the best in tech, music and film. Use Exhibit Solutions at corporate events, seminars, conferences and special events to showcase your business.
'A VERY FINE BALANCING ACT'
"It's a very fine balancing act," said Hugh Forrest, head of the festival's interactive segment. "Our top priority is having a safe and user-friendly event for all our registrants."
The festival will still brandish some of the leading tech innovations, with an apparent focus this year on artificial intelligence. Martine Rothblatt, the transgender pharma tycoon and Sirius founder, will give a talk about her unique vision of the future and the robot version of her wife, while MIT's Hugh Herr will discuss how bionics are being used to replace limbs lost in war. Also, the event's first interactive robot "petting zoo" will allow viewers to interact and play with the latest in robot technology, such as the Bujold, programmed to search for survivors at destruction sites.
The opening of the 1,012-room JW Marriott Hotel downtown has allowed event organizers to nearly double the number of scheduled events at its Startup Village — from 112 last year to 213 this year. That's good news for the hordes of start-up entrepreneurs who descend upon Austin each year in hopes of being discovered, much the way Twitter announced itself at the 2007 SXSW and exploded into the tech world. E&E Exhibit Solutions can create efficient pop-up displays and large custom exhibits for your next trade show or event.
The founders of Keen Home, which creates tech devices that enhance home functions, such as heating and cooling, unveiled their concept at SXSW last year. Two months later, they closed on $1.52 million in seed money. They're headed back this year.
"It's a good amalgamation of all the leaders of the tech industry," co-founder Nayeem Hussain said. "You have all the right people listening."
Now in its 29th year, SXSW has become a huge benefactor not just to techies but to the city itself, last year pouring $315 million into the Austin economy and drawing more than 85,000 enthusiasts to the city. The festival also delivers a dose of culture to the city, showcasing local filmmakers and drawing movie moguls and recording artists. It's a far cry from the 700 attendees who showed up the inaugural year in 1987 to hear local music acts (interactive and film were added seven years later).
Filmmaker and longtime Austin resident Richard Linklater remembers the handful of attendees who wandered into the lobby of the Dobie Theater on the University of Texas campus two decades ago to watch the festival's first film awards ceremony. Today, SXSW has become a key destination for filmmakers, jostling with Sundance as the premiere U.S. film festival, he said.
"A lot of films were 'Sundance or bust' but that's not the case anymore," said Linklater, whose Oscar-nominated film, Boyhood, screened at SXSW last year. "There's something beautiful about 'SXSW or bust.' " He added: "It's grown up. It's fun to see it become a major festival."
But that growth has led to growing pains, mostly centered on the unofficial parties sponsored by huge brands such as Facebook, Comcast and Samsung. Those companies spend millions of dollars on top-tier acts — Jay Z teamed with Kanye West last year for a free Samsung-sponsored concert — but also cause crowd concerns.
RETHINKING INVOLVEMENT
This year's rule changes are making some corporations rethink their SXSW involvement. Jennifer Sinski, co-founder of RSVPster, a service that sends RSVPs to scores of unofficial parties around town for a fee, said she's noticed a change in the party landscape this year. Last year, her company counted about 600 unofficial parties around Austin during SXSW. This year, many of those parties are being toned down.
"More events are going into venues that are full-standing venues year round instead of trying to throw a party in a parking lot," she said. "That's a good thing. The quality of events have really improved."
Danielle Thomas, owner of Big Green House, an Austin-based marketing and events production firm that works with large brands during SXSW, said she's lost four "major clients" this year who have been event regulars for years and knows of six others also not returning. Some of those pulled out even before the city's rule changes were announced, pointing to a possible natural decline of the SXSW after-party scene.
More alarming are the number of venues that don't require a permit, such as the Austin Music Hall, which remained vacant less than a week out from SXSW, she said. Those spots typically are booked months in advance. Though striking, the trend toward fewer parties and smaller crowds is something many around Austin, including Thomas, have lobbied and hoped for for years — even though it'll mean less money for her business, she said.
"Things got bigger and bigger and bigger, and the city felt like it needed to step in," she said. "There's a good balance that can be struck. And maybe it has. Maybe that's exactly what's happening this year."
Tuesday, January 29, 2013
Technology Companies Praise Work Plan for Immigrant Students
Story first appeared on USA Today
Tech companies are giving mixed reviews to a new proposal that would help advanced-degree students in tech fields stay and work in the U.S. after they complete school.
Technology companies are praising a congressional proposal to provide a path for permanent U.S. residency to immigrants who receive master's degrees or doctorates in technical fields, but they say it would only partly solve their recruiting problems.
Under a blueprint unveiled by a bipartisan group of senators, immigrants who receive master's degrees or doctorates in science, technology, engineering or math from an American university would be awarded a green card, or permanent residency.
Currently, the U.S. places a cap of 85,000 a year on the number of three-year H-1B visas it grants to immigrants with specialized skills.
Green cards are capped at 140,000 a year. And there are separate limits on the number of workers from each country who can get green cards.
The per-country caps hampers the large numbers of high-tech workers from China and India whose quotas are reached first, say executives of Intel and Facebook.
Intel Vice President Peter Cleveland says green cards should be awarded on a first-come, first-served basis.
He says most of its new hires are foreign graduates of U.S. universities with advanced degrees. He called the Senate proposal "a very positive sign."
But he said the company already has "2,300 employees in a green card lines" who graduated in previous years and would not be affected by the more lenient stance. Employees who don't have their green cards can't be promoted and are constrained from moving to other companies.
"It's good for new graduates but (doesn't help) existing green card holders," he says.
Facebook officials say the proposal would help, but many of its new hires are from foreign universities who would not be affected.
In late 2011, the company was forced to open a new office in Dublin to accommodate nearly 80 new staffers from countries such as China, India and Singapore, says Joel Kaplan, the company's vice president of public policy.
That deprives the U.S. economy of a larger work force, disrupts the closely-knit teams that Facebook fosters and adds a major operating expense.
Even tech start-ups gave the proposal mixed reviews.
Elizabeth Stanton, founder of an online learning start-up in Palo Alto, Calif., says she has been unable to hire a 19-year-old computer science student from India under the H-1B visa program.
Criteria for qualifying for the visa should be loosened, she says.
Tuesday, October 23, 2012
Sales for Robot Auto-Mowers Surge
Europe’s backyards have become the latest front in the robot wars.
With a quarter of lawn owners saying they dislike mowing the grass, sales of machines that will do the job for them are taking off, especially in Europe where landscaping services are more expensive than in the U.S.
That has spurred a legion of manufacturers to challenge market leader Husqvarna AB. (HUSQB) Robert Bosch GmbH, Deere & Co. (DE) and Global Garden Products Italy SpA this year started offering robotic mowers, which Husqvarna sells for as much as 5,000 euros ($6,487). Honda Motor Co. (7267) plans to enter the fray in 2013.
Thomas Olsson, head of Swedish operations at privately owned Global Garden Products said they had to get on board.
The market for hands-free mowers, which expanded by more than 30 percent last year, offers a rare bright spot in Europe’s consumer climate. The European market may grow as much as 20 percent annually over the next five years, Olsson said. Most of the customers are in Sweden, Germany, France and Switzerland -- countries that have so far proven resilient to the debt crisis.
Demand for the garden robots has exploded the last couple of years, said Mats Gustafsson, owner of Moheda Jarnhandels AB, a hardware store in the southern Swedish town of Moheda. Gustafsson said he’s sold almost 60 robomowers this year, compared with fewer than 10 five years ago.
European Boom
Henric Andersson, head of product management and development at Husqvarna said robotic auto-mowers are still a niche market in Europe but growing incredibly fast in other markets, and that with time may be as big or bigger than regular mowers in some countries.
Six percent of all mowers sold in Germany are now robotic, and the country’s automatic mower market is growing in “double digits,” according to research company GfK Retail and Technology GmbH.
Husqvarna, the former Electrolux AB unit that produced the first robotic mower in 1995, has six models that can care for lawns ranging from 400 square meters (4,306 square feet) to 6,000 square meters. Outside of Europe, it mainly sells the mowers in Australia and New Zealand.
New Entrants
The Swedish company brought the product to North America in 2001, only to retreat a year later after concluding the market wasn’t ready. In addition to the greater use of landscaping services by U.S. homeowners, North American grass, especially in the southern U.S., is generally tougher than European varieties, making it difficult for the machine’s fine blades to work effectively, according to Husqvarna.
Bosch, the world’s largest supplier of car parts, entered the robotic mower market last month when it started selling its Indego machine in Scandinavia. Deere, based in Moline, Illinois, joined the rivalry earlier in the year with the John Deere Tango E5, which it sells in Austria, Belgium, Luxembourg, Norway and Switzerland.
Global Garden Products, based in Castelfranco Veneto, Italy, bought its way into the $170 million market in January when it acquired LiCo srl’s Lizard mower marque, and rebranded those machines under its Stiga brand.
Andersson declined to discuss Husqvarna’s market share.
Sensor Technology
The mowers use sensor technology to stay within a defined area of the yard, and are typically able to avoid obstacles such as trees and lawn furniture. Some of the mowers, including those made by Husqvarna, move around in random patterns, while others such as Bosch machines follow distinct lines. Unlike traditional mowers, they don’t collect the cut grass, as the clippings are so small they break down fast and act as fertilizer; instead the rechargable mowers are used frequently, often daily.
The price of robotic mowers may be barrier to their success. Husqvarna’s models start at 1,700 euros. Most electric walk-behind mowers sell for 300 euros to 900 euros.
Prices will come down, and when they’re inexpensive enough the market will become mainstream, according to Husqvarna’s Andersson. About 1,000 euros may be “a magical line for the customer,” he said.
Robots aren’t only gardening, they’re also cleaning the house. Sensor-loaded machines have grabbed a 6.1 percent share of the European vacuum-cleaner market, according to GfK. The market has grown about seven times over the last three years and is now worth about 205 million euros in the region, the researcher reports.
Robotic Vacuums
Their success also offers a cautionary tale for pricing. Electrolux AB, (ELUXB) the world’s second-biggest appliance maker, was first to introduce the robot vacuum cleaner in 2001 and after reaping little success stopped making the product in 2009.
Electrolux spokesman Erik Zsiga said the development costs kept the retail prices too high.
Companies that still make robot vacuums include Siemens AG, (SIE) Samsung Electronics Co. Ltd. and iRobot Corp., which raised its earnings forecast in July after sales beat estimates. An Electrolux Trilobite vacuum cleaner retailed for more than $1,500 before it got pulled from the market, while an iRobot Roomba can be bought on Amazon today for as little as $300.
Electrolux’s limited success with robotic appliances isn’t discouraging Honda from betting on auto mowers. The Tokyo-based company said in August it will start selling a machine called the Miimo in Europe next year.
Johan Dahl, an analyst at Erik Penser Bankaktiebolag in Stockholm, who has a hold recommendation on Husqvarna’s shares said even though the competition is getting stiff, there is room for more players to compete profitably.
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Thursday, May 31, 2012
Blackberry Maker RIM Headed for a Cliff
Story first appeared in USA Today.
Research In Motion Ltd., the maker of the BlackBerry, is in steep decline. The company, once the crown jewel of the Canadian technology industry, is now worth 1% of Apple's market capitalization. One way for RIM to stop the downward tailspin: It could sell itself to a competitor or financial firm. But who would step up to buy RIM — and why?
Late Tuesday, the company said it expects to post an operating loss for the current quarter, a sign that BlackBerry sales are falling even faster than analysts expected. On Wednesday, the company's stock hit its lowest level since 2003, the year RIM went from making two-way e-mail pagers to smartphones.
The stock has fallen 93% since their peak in 2008. Since then, the BlackBerry's dominance as the smartphone for on-the-go business people has been eviscerated by Apple Inc.'s iPhone, and more recently, by phones running Google Inc.'s Android software. Research firm IDC says BlackBerrys now account for 6.4% of the global smartphone market, a third of what they had two years ago.
In that time, the company's financial performance has suffered. RIM reported a 25% revenue decline in the latest fiscal quarter, to $4.2 billion from $5.6 billion. For the full fiscal year that ended on March 3, it earned $1.2 billion, or $2.22 per share, on revenue of $18.4 billion. That's down from net income of $3.4 billion, or $6.34 a share, on revenue of $19.9 billion in fiscal 2011.
RIM issued the dire warning about its business Tuesday, adding that it will lay off a "significant" number of employees.
Still, the company is defiant. The Chief executive says he can turn things around with the help of fresh smartphone software. He joined RIM four years ago and was most recently its chief operating officer. He replaced co-CEOs in January after the company lost tens of billions in market value.
Analysts give RIM only a slight chance of coming out of the crisis. To hedge its bets, the company has hired bankers to look at its options. It's not actively looking to sell itself, but it wants to be prepared.
As RIM's prospects worsened, last year marked a turning point in the way analysts assess RIMs value. Instead of treating it like a company with a future, they started looking at it as a collection of parts that could be split up and sold separately to the highest bidder.
Most of the company's value lies in the monthly fees it gets from phone companies in exchange for running the systems that deliver email and Web pages to BlackBerrys.
RIM has 78 million users connected to this system, but estimates show only 20 million are corporate and government users who are likely to stick around because of the communications security RIM provides. The rest are consumers who will jump to competing phones. That business is worth about $2.75 billion to a competitor.
The other major component of RIM's value is its patent portfolio. The company had an early scare in U.S. patent courts in 2006, when it was forced to pay $612.5 million to a small company founded by an inventor who had patents on wireless e-mail delivery. Since then, it's filed for thousands of patents to use as a defense against future suits.
Patents on wireless technologies exploded in value last year, as Apple and Microsoft Corp. started suing makers of phones that run Google's Android software. Countersuits followed. A consortium that included Apple and RIM bought the patents of a defunct Canadian maker of telecommunications gear, Nortel, for $4.5 billion last year. That compares with the $1.13 billion Nortel's once-prominent wireless networks business fetched in 2009.
As a counter-move, Google bolstered its own patent portfolio by buying Motorola Mobility Holdings Inc., a U.S. phone maker with only slightly better prospects than RIM, for $12.5 billion.
Where does that leave RIM? The CEO of MDB Capital, said RIM's patents are worth more than $1 billion, and could be worth as much as $4 billion if a bidding war develops between Apple, Google, Microsoft Corp. and perhaps Samsung Electronics Co.
The value of RIM's portfolio is placde at $2.5 billion, excluding the patents RIM bought from Nortel and shares with Apple, Microsoft and other buyers.
RIM has $2.1 billion in cash, but Walkley discounts this completely, since the phone business will likely start using up cash soon, and downsizing will require severance payments. That means the email network and the patents comprise RIM's entire value at $5.25 billion, by his estimate.
That's very close to RIM's current market capitalization, at $5.4 billion, though a buyer could be expected to pay a premium.
The cash cushion also means that RIM is in no imminent danger of going bankrupt. But as the shares decline, RIM is likely to face increasing pressure from shareholders to unlock the company's value through a sale, and to abandon the comeback plan.
A possible middle ground would be to sell the patent portfolio while keeping the rest of the company. Two months ago, AOL, once a pioneering Internet service provider, sold and licensed its patents —which are more modest than RIM's for $1 billion— to Microsoft.
Microsoft is one company that's been suggested as a potential RIM buyer. The software juggernaut is trying to get back into smartphone software, but its Windows Phones haven't been popular so far. Buying RIM could give it a chance to establish itself as a provider of trusted wireless email services, though moving subscribers from BlackBerry to Windows could be challenging.
Research In Motion Ltd., the maker of the BlackBerry, is in steep decline. The company, once the crown jewel of the Canadian technology industry, is now worth 1% of Apple's market capitalization. One way for RIM to stop the downward tailspin: It could sell itself to a competitor or financial firm. But who would step up to buy RIM — and why?
Late Tuesday, the company said it expects to post an operating loss for the current quarter, a sign that BlackBerry sales are falling even faster than analysts expected. On Wednesday, the company's stock hit its lowest level since 2003, the year RIM went from making two-way e-mail pagers to smartphones.
The stock has fallen 93% since their peak in 2008. Since then, the BlackBerry's dominance as the smartphone for on-the-go business people has been eviscerated by Apple Inc.'s iPhone, and more recently, by phones running Google Inc.'s Android software. Research firm IDC says BlackBerrys now account for 6.4% of the global smartphone market, a third of what they had two years ago.
In that time, the company's financial performance has suffered. RIM reported a 25% revenue decline in the latest fiscal quarter, to $4.2 billion from $5.6 billion. For the full fiscal year that ended on March 3, it earned $1.2 billion, or $2.22 per share, on revenue of $18.4 billion. That's down from net income of $3.4 billion, or $6.34 a share, on revenue of $19.9 billion in fiscal 2011.
RIM issued the dire warning about its business Tuesday, adding that it will lay off a "significant" number of employees.
Still, the company is defiant. The Chief executive says he can turn things around with the help of fresh smartphone software. He joined RIM four years ago and was most recently its chief operating officer. He replaced co-CEOs in January after the company lost tens of billions in market value.
Analysts give RIM only a slight chance of coming out of the crisis. To hedge its bets, the company has hired bankers to look at its options. It's not actively looking to sell itself, but it wants to be prepared.
As RIM's prospects worsened, last year marked a turning point in the way analysts assess RIMs value. Instead of treating it like a company with a future, they started looking at it as a collection of parts that could be split up and sold separately to the highest bidder.
Most of the company's value lies in the monthly fees it gets from phone companies in exchange for running the systems that deliver email and Web pages to BlackBerrys.
RIM has 78 million users connected to this system, but estimates show only 20 million are corporate and government users who are likely to stick around because of the communications security RIM provides. The rest are consumers who will jump to competing phones. That business is worth about $2.75 billion to a competitor.
The other major component of RIM's value is its patent portfolio. The company had an early scare in U.S. patent courts in 2006, when it was forced to pay $612.5 million to a small company founded by an inventor who had patents on wireless e-mail delivery. Since then, it's filed for thousands of patents to use as a defense against future suits.
Patents on wireless technologies exploded in value last year, as Apple and Microsoft Corp. started suing makers of phones that run Google's Android software. Countersuits followed. A consortium that included Apple and RIM bought the patents of a defunct Canadian maker of telecommunications gear, Nortel, for $4.5 billion last year. That compares with the $1.13 billion Nortel's once-prominent wireless networks business fetched in 2009.
As a counter-move, Google bolstered its own patent portfolio by buying Motorola Mobility Holdings Inc., a U.S. phone maker with only slightly better prospects than RIM, for $12.5 billion.
Where does that leave RIM? The CEO of MDB Capital, said RIM's patents are worth more than $1 billion, and could be worth as much as $4 billion if a bidding war develops between Apple, Google, Microsoft Corp. and perhaps Samsung Electronics Co.
The value of RIM's portfolio is placde at $2.5 billion, excluding the patents RIM bought from Nortel and shares with Apple, Microsoft and other buyers.
RIM has $2.1 billion in cash, but Walkley discounts this completely, since the phone business will likely start using up cash soon, and downsizing will require severance payments. That means the email network and the patents comprise RIM's entire value at $5.25 billion, by his estimate.
That's very close to RIM's current market capitalization, at $5.4 billion, though a buyer could be expected to pay a premium.
The cash cushion also means that RIM is in no imminent danger of going bankrupt. But as the shares decline, RIM is likely to face increasing pressure from shareholders to unlock the company's value through a sale, and to abandon the comeback plan.
A possible middle ground would be to sell the patent portfolio while keeping the rest of the company. Two months ago, AOL, once a pioneering Internet service provider, sold and licensed its patents —which are more modest than RIM's for $1 billion— to Microsoft.
Microsoft is one company that's been suggested as a potential RIM buyer. The software juggernaut is trying to get back into smartphone software, but its Windows Phones haven't been popular so far. Buying RIM could give it a chance to establish itself as a provider of trusted wireless email services, though moving subscribers from BlackBerry to Windows could be challenging.
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email software,
Research in Motion,
RIM,
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