Toshiba Records $4.5 Billion Annual Loss

Toshiba CEO was forced to resign after revelations came to fruition about the company’s management exaggerating operating profits by as much as $1.2 billion. Clearly, this has made a profound impact on their reputation among partners and consumers. According to The Wall Street Journal, The company is set to make a $4.5 billion annual loss with 7,800 jobs being cut as part of a large restructuring programme. Toshiba is having to make difficult decisions to try to restore faith in the company and rebuild once again. However, given their tarnished reputation, it’s impossible to know if they have a long-term future.

Out out the job losses, 6,800 are going from Toshiba’s customer electronics and applications department. Toshiba President Masashi Muromachi said about the upcoming financial period:

“We admit our steps toward restructuring were behind the curve,”

“The damage wouldn’t be this large if we had been able to implement overhaul plans much sooner.”

He also suggested that the company would “focus on businesses that can generate profits” and “consider withdrawals from unprofitable ones if a turnaround is difficult.”  This is an interesting statement to make and exemplifies how challenging Toshiba’s future is. It seems even the company’s CEO isn’t optimistic about the profitability of certain markets. This means is perfectly feasible for them to exit the consumer electronic sector to stay afloat.

Walmart Enters Pricing War with Amazon

Black Friday and Cyber Monday plans are already in full swing for major American based retailers Walmart and Amazon. These two famous shop-till-you-drop holidays are set to churn massive sales figures for retail giants.

One of USA’s biggest retailers, Wal-Mart has reportedly made a brave decision to price match Amazon US in any of their products in these upcoming sale frenzies. Wal-Mart’s price match guarantee has been advertised to include any advertised sale price and extends across their brick-and-mortar to online stores.

Previously this sale matching guarantee didn’t include Amazon, reportedly due to Wal-Mart’s apparent higher cost for storage of retail items and Amazon’s 10-year experience in the field. This recent change comes as a shock to many and may prove that Wal-Mart either have something to prove, or are desperate for market share.

Wal-Mart have claimed that this price matching offer is to help generate sales year-round, saying that quite often they will see customers walk into their premises ready to purchase a product, but will then wait until Black Friday or Cyber Monday sales to purchase at a saving. Many media outlets are reporting that this decision will not affect Wal-Marts profits too heavily and their US CEO Greg Foran agrees.

Don’t be confused however, Wal-Mart’s price match will reportedly not cover only Black Friday and Cyber Monday – they are here to stay for the foreseeable future.

Image courtesy of Chiphell

Top Dog – ASUS Motherboards Expected to Outsell GIGABYTE

According to ‘industry sources’, CnBeta has recently reported that ASUS is now expected to move more units in 2015 and kick GIGABYTE off the top position. ASUS motherboard shipments in Q3 2014 have been bumped to over 6 million, mostly due to their aggressive price cuts and new marketing strategies – this has seen them extend their lead over Taiwanese component manufacturer and competitor GIGABYTE.

Asustek has reportedly been expecting their total shipments to be greater than GIGABYTE this calendar year, but are most likely going to experience a smaller profit growth margin thanks to the price cuts and increased marketing budgets as mentioned above.

Q4 is going to continue the well-selling nature of ASUS in 2014, providing an estimated 5.6 million (minimum) units sold, amounting to 20.7 million units total this year. Comparing this to GIGABYTE who have managed to move 9.7 million motherboards in the total second half of 2014 – sitting 11.6 million units moved behind ASUS in the same period.

Insiders have told CnBeta that they expect ASUS’ significant decline in profit to see them fall around 20% in margin from last years earnings. Comparing this to GIGABYE who posted a profit increase from $97.8 million to $107.8 million in 2013 thanks to increased sales of their high-end products.

In addition to these two giants, it is reported that MSI International and ASRock motherboard sales and profits are set to decline from now until into the second half of 2015.

Looking at these statistics, it seems that GIGABYTE are possibly the user’s choice when it comes to high-end motherboards, whereas ASUS are winning the (much larger) general consumer race.

What motherboard do you run in your system? Personally I have just picked up a GIGABYTE H97N-WIFI for my Thermaltake Core V1 Mini-ITX build, but I have no major preference either way.

Samsung Profits down by 20%

Samsung have seen a 20% drop in profits for their second quarter of the year,  mainly due to a decrease in smartphone sales and an increase in the power of Korean currency. In monetary terms Samsung have made a net profit of 6.25 trillion Won (£3.6bn) down from the 7.7 trillion won from last year. Samsung are the largest manufacturer of mobile phones, with their handset division earning the bulk of the profits. Sales of smartphones have started to down for Samsung and along with other manufacturers they have had to start pricing more competitively which hurts the profit margin on each phone.

In a statement Samsung said “”The second quarter was affected by several factors including the slow global sales of smartphones and tablets and escalating marketing expenditure to reduce inventory”

An increase in the power of the Korean currency, the won, has also hurt Samsung. The won has had an increase of 11% against the US dollar and nearly 7% against the euro in the last year. This hurts companies such as Samsung who rely heavily on exports when they recieve their profits from the foreign countries. Samsung have said they have lost “about 500bn won” in missed revenues.

Samsung are remaining hopeful but are being realistic. New flagship products should ensure that they keep their top spot as the leading phone manufacturer, with a rollout of new models expected soon but they realise that it’s going to be a hard battle.

Thank you BBC News for providing us with this information

Image courtesy of Samsung

Freemium Apps Said to Generate 98% of Google Play’s Revenue in May

A study performed by App Annie is said to have revealed in a report that Google Play’s revenue in May was not made from paid applications. With over 1.5 million apps from the store platform, it appears that 98% of the revenue was generated from freemium applications.

The freemium applications, which are ‘free’ to download and play, but also provide ‘premium’ content which users can buy with real money, have proven to be the ‘gold mine’ for Google’s store platform. However, the reports also show that the majority of downloads from the store registered in May also indicated a decrease in freemium apps and an increase in free (no strings attached) applications.

App Annie apparently did not state the revenue spike from freemium apps in the given months, however downloads from previous months followed by content purchase later on might explain it since 90% of the revenue during the first quarter reportedly came from games.

The use of premium content inside games has been criticised for some time now, having gamers with more money be given an advantage over gamers who do not wish to invest in such applications. Nevertheless, data gathered by App Annie shows that while the jury decides whether or not freemium apps are unethical or not, the apps are currently deemed as commercially successful.

The study shows that the average application downloaded from Google Play earns roughly $1,150, while Apple’s App Store brings a figure of $4,000, followed by Microsoft’s Windows Phone Store bringing in only $625. Though there is a considerable gap between Apple and Google’s earnings, it is said that Google is quickly gaining some ground in markets from Asia, Russia, Mexico and Brazil.

Thank you Mashable for providing us with this information
Image courtesy of Mashable