Business Software Maker SAP Posts Profit

Business software maker SAP AG said Tuesday that growth in the United States and emerging markets helped it to a 15 percent increase in second-quarter net earnings.

SAP earned euro491 million ($636 million) in the April-June period, up from euro426 million in the same period a year earlier, according to the company's preliminary earnings statement.

Total revenue increased 12 percent to nearly euro2.9 billion from euro2.6 billion a year ago, it added. Revenue from software and software-related services was up a stronger 16 percent, to euro2.26 billion from euro1.95 billion.

SAP, based in Walldorf, Germany, also said it has completed its cash tender offer for U.S. database software maker Sybase Inc. -- a $5.8 billion takeover that won clearance from the European Commission last week.

SAP, whose programs help companies like Apple Inc.'s iTunes do back-office work such as payroll, inventory management and accounting, said it was seeing increased investment from companies of all sizes and from many sectors.

"We had outstanding growth in strategic markets like the U.S. and we saw continued double-digit growth in key emerging markets in Latin America and Asia," co-CEO Bill McDermott said in a statement. He credited "renewed customer confidence" as a factor in the second-quarter performance.

First-half net earnings were up 41 percent at euro878 million from last year's euro622 million. Total revenue was up 9 percent at euro5.4 billion, while software and software-related service revenue climbed 14 percent to euro4.2 billion.

Including Sybase, SAP said it expects full-year software and software-related revenue to increase by between 9 and 11 percent in constant-currency terms.

With the acquisition, SAP said it expects that it "will be able to extend its reach into new user categories well beyond its traditional user base."

Sybase will continue to operate as a separate company under its current CEO, John Chen, SAP said. It added that "Sybase's expertise...
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Yahoo Japan Rejects Microsoft's Bing, Selects Google

Score another win for Google. Despite Yahoo's intimate relationship with Microsoft's Bing search engine, Yahoo Japan has snubbed Bing in favor of the world search leader.

Yahoo Japan on Tuesday said it will tap Google's technology to power both its search engine and search ad-delivery system. But the decision may not have rested fully on Yahoo's shoulders.

Yahoo only owns 34.8 percent of Yahoo Japan. SoftBank, Japan's largest distributor of computer, software, peripherals and systems, as well as Japan's largest publisher of computer-related computer magazines and books, owns 38.6 percent, giving it majority control. Financial terms of the four-year, non-exclusive partnership were not disclosed.

"At the present time, we feel there are quite a few areas where Microsoft is not yet ready," said Yahoo Japan CEO Masahiro Inoue at a Tuesday press conference in Tokyo. "Google is one step ahead in Japanese-language services."

Google: The Better Choice?

Yahoo Japan has long partnered with Google. In 2001, Google announced its first alliance with Yahoo Japan to give Japanese users access to Google's search results. Yahoo Japan was then, and is now, one of the most visited web sites in Asia, and the partnership opens the door to more opportunity for Google.

Google owns 37.3 percent of Japan's search market, according to Net Ratings. But Yahoo Japan leads with 53.2 percent. Microsoft's MSN and Bing have grabbed a collective 2.6 percent. That's somewhat of a role reversal from the U.S. market, where Google has a dominant 85 percent, compared with only 6.2 percent for Yahoo.

"From the outside it's a surprise, but when you consider that Yahoo only owns a minority stake in the entity, it's less so. Its majority owned by SoftBank," said Greg Sterling, principal analyst at Sterling Market Intelligence. SoftBank also owns shares in Alibaba Group, which runs Yahoo's China portal.

"Yahoo Japan...
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Is Your Smartphone Conflict-Free?

Does that smart phone in your pocket contribute to rape and murder in the depths of Africa? Soon, you'll know: A new U.S. law requires companies to certify whether their products contain minerals from rebel-controlled mines in Congo and surrounding countries.

It's a move aimed at starving the rebels of funds and encouraging them to lay down their arms.

But experts doubt the law will stop the fighting. Furthermore, they say, it could deprive hundreds of thousands of desperately poor Congolese of their incomes and disrupt the economy of an area that's struggling for stability after more than decade of war.

"For many, many people, it's the only livelihood they have," said Sara Geenen, a researcher at the University of Antwerp in Belgium, who just returned from a trip to the Kivu provinces in eastern Congo.

At issue are three industrial metals -- tin, tantalum and tungsten -- and gold. Tin is used in the solder that joins electronic components together. Tantalum's main use is in capacitors, a vital component in electronics. Tungsten has many uses, including light-bulb filaments and the heavy, compact mass that makes cell phones vibrate.

Exports of these metals from eastern Congo have been the subject of a campaign by nonprofit advocacy groups for a few years, one that's borne fruit with the addition of a "Conflict Minerals" provision to the financial-regulation legislation that President Barack Obama signed into law Wednesday.

A recent YouTube video modeled after Apple Inc.'s well-known ads is titled "I'm a Mac ... and I've Got a Dirty Secret." The video says "a lot" of the world production of the four metals comes from Congo, though the contribution is relatively small.

While Congo has vast reserves, poverty and war mean most of the mining and processing is done by hand, so production is slow. The country produced 5 percent...
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AT&T Rolls Out Second Wi-Fi Supplement To 3G

AT&T launched a new hot-zone pilot Monday in downtown Charlotte, N.C., to provide supplemental Wi-Fi coverage for smartphone subscribers in an area that consistently experiences high 3G traffic and mobile data use. The wireless carrier also told media outlets that it will be introducing a software patch over the next three weeks to improve the performance of an Alcatel-Lucent app that has been slowing mobile-device data speeds for less than two percent of its wireless customers.

To cope with rising mobile data demand, AT&T has been implementing a variety of network upgrades over the past several months that are finally kicking into high gear. In the coverage areas where AT&T has completed higher-speed HSPA 7.2 service, AT&T CFO Rick Lindner said internal data is showing speed improvements in the 32 to 47 percent range.

"AT&T also continues to add more cell towers to its network," Linder told financial analysts last week. "We're upgrading high-capacity antenna systems, and we're building out fiber backhaul throughout our footprint."

Network Improvements

Continued network improvements will be required to keep pace with the new mobile devices landing on AT&T's nationwide network. The wireless carrier said it has seen an organic net gain in total mobile subscribers of 1.6 million, for a total of 90.1 million.

Both integrated devices and connected devices continue to be strengths for AT&T, Linder told analysts. For example, iPhone activations during the second quarter reached a record 3.2 million, and AT&T expects to see some acceleration "as the iPhone 4 availability continues to improve from a supply standpoint," Lindner said.

AT&T also saw 400,000 to 500,000 iPad tablets activated on the network during the latest quarter. "The majority of those -- probably in the 75 to 80 percent range -- came on at the higher data package," Lindner said. "We also added...
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Dell Settles SEC Charges of Playing Accounting Games

Dell agreed Thursday to pay $100 million to settle the Securities and Exchange Commission's charge that the computer maker used accounting games to meet earnings targets for years.

The settlement is the largest for accounting or financial disclosure problems since mortgage giant Fannie Mae paid the SEC $400 million in 2006.

The SEC alleges that from 2002 to 2006, Dell met or beat analysts' earnings expectations by not accurately disclosing payments that it received from computer-chip maker Intel not to use chips from Intel's rival Advanced Micro Devices. These payments accounted for 76% of Dell's operating income in early 2007, the SEC says. Dell also covered earnings shortages by dipping into reserves and said the seemingly strong results were due to strong management and operations, the SEC says.

Several current and former Dell executives also settled with the SEC and paid fines. Founder and CEO Michael Dell and former CEO Kevin Rollins each agreed to $4 million fines for allegedly not disclosing important information to investors. Former CFO James Schneider agreed to a $3 million fine and a suspension from acting as an accountant for companies that file to the SEC for five years. Nicholas Dunning, Dell's former regional vice president of finance, agreed to a $50,000 fine. Dunning and another former Dell accounting staff member, Leslie Jackson, agreed to three-year suspensions.

The SEC initially approached Dell in 2005, and in 2007 the company acknowledged accounting errors and restated its financial results from fiscal year 2003 through its first quarter of 2007, Dell spokesman David Frink says.

Dell is "pleased to reach a settlement ... and focus on our customers," Frink says. Michael Dell, in a statement, said, "We are pleased to have resolved this matter." Dunning's lawyer Joseph Warin issued a statement saying that Dunning was happy to put the matter behind him. The...
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Windows 7, Office Drive Record Microsoft Revenue

With Apple breezing past Wall Street estimates this week by reporting $15.7 billion in revenue for its third business quarter, the pressure was on Microsoft -- and the software giant delivered. Microsoft said Thursday it earned a record $16.04 billion in revenue during the second quarter, driven by the launch of Office 2010 and strong Windows 7 sales.

With 175 million licenses sold to date, Windows 7 is the fastest-selling operating system ever and now runs on more than 15 percent of all PCs worldwide, Microsoft CFO Peter Klein told financial analysts on a conference call.

"This quarter's record revenue reflects the breadth of our offerings and our continued product momentum," Klein said. In addition to Windows 7, Windows Server and the Xbox 360 video-game console also exhibited strong performance in the quarter even as the software giant's Bing search engine "achieved its 13th consecutive month of share gain," he added.

PC Growth Continues

According to a preliminary estimate from Gartner, worldwide PC shipments rose 20.7 percent year over year to 82.9 million in the second quarter -- slightly above the research firm's earlier outlook of 19.3 percent growth. However, Microsoft told analysts it estimates even higher PC market growth of 22 to 24 percent in the quarter, and with the consumer and business segments growing at roughly the same rate.

"From a geographic perspective, emerging markets remain a significant driver of the PC market with almost twice the growth of mature markets," said Bill Koefoed, general manager of investor relations at Microsoft.

Gartner's PC growth estimate may go up another one to two percentage points once all the numbers for the second quarter are in, noted Mikako Kitagawa, a principal analyst at the research firm. "So our final figure could be low side of their projection," she said. "But consumer growth...
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iMac and MacBook Pro Drive Apple's Record Sales

Apple's strong iPhone and iPad sales dazzled Wall Street this week, but an even bigger surprise perhaps came from sales of the company's line of Mac computers in its third business quarter. The computer maker announced record sales of 3.47 million desktop and notebook products, exceeding the previous quarterly high mark by more than 100,000 units.

Mac sales grew 33 percent year over year, which Apple CFO Peter Oppenheimer said easily exceeded IDC's pre-earnings release estimate of 22 percent growth in this year's second quarter.

"We are pleased to have outgrown the global market in both the desktop and portable categories," Oppenheimer told financial analysts. "We experienced strong double-digit Mac growth in each of our geographies" and "began and ended the quarter with between three and four weeks of Mac channel inventory."

A Strong U.S. Showing

Apple said its surprising Mac shipment growth was driven by the continuing sales momentum behind the iMac as well as heightened demand for the company's notebooks. Apple's MacBook Pro family "was updated in April with faster processors, more powerful graphics, and even longer battery life," Oppenheimer said.

Despite school budgetary constraints, Apple's U.S. education business enjoyed record sales. Furthermore, revenue at Apple's retail stores amounted to $2.58 million -- a 73 percent rise from the $1.49 billion that Apple's retail stores rang up in the year-earlier period.

"Our stores sold 677,000 Macs compared to 492,000 Macs in the year-ago quarter -- an increase of 38 percent" and "about half the Macs sold in our stores during the June quarter were to customers who have never owned a Mac before," Oppenheimer said.

Apple sold nearly 1.75 million Mac computers in the United States alone during the second quarter of 2010, according to Gartner. U.S. unit shipments were good enough to give Apple a number-four ranking with an...
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IBM Calls zEnterprise the 'Most Powerful' Mainframe Ever

IBM announced Thursday its zEnterprise mainframe server, which it described as "the most powerful and energy-efficient mainframe ever." The Armonk, N.Y.-based company called the new zEnterprise "the most significant design change in 20 years for the IBM mainframe." At the same time, the company unveiled a new systems design that allows mainframe, POWER7 and System x servers to be managed as one virtual system.

IBM said its new systems design is the result of an R&D investment of more than $1.5 billion, combining the new zEnterprise mainframe with a new zEnterprise BladeCenter Extension and Unified Resource Manager. The resulting system, IBM said, can reduce cost of ownership by 55 percent and lower acquisition costs by 40 percent.

'Jumble of Disparate Technologies'

The zEnterprise System is intended to address what the company described as "the jumble of disparate technologies" that can develop in data centers, sometimes operating with separate staffs and management tools. But the new system allows a financial-services firm, for instance, to both manage credit-card transactions and analyze the information, all within seconds instead of hours. Also being introduced is the Smart Analytics Optimizer, intended to speed up complex analyses while reducing the cost for each transaction.

Complex database queries can see as much as a ten-fold improvement in performance with the new system, IBM said, and the mainframe's capabilities can be extended to customer-service applications running on IBM blade servers.

The core server, called the zEnterprise 196, has 96 microprocessors running at 5.2 GHz and is able to handle 50 billion instructions per second. New software developed for this microprocessor technology can lead to a 60 percent improvement in data-intensive and Java workloads, according to IBM.

Although the new system has 60 percent more capacity than System z10, its predecessor, it consumes about the same amount of electricity. IBM said it costs 74...
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Wireless Broadband Network To Launch Next Year

U.S. consumers and businesses may get more options in wireless service starting next year, with the launch of a new wireless broadband network that aims to provide competition to the incumbent phone companies.

Private-equity firm Harbinger Capital Partners on Tuesday revealed details of the launch of its wireless network, LightSquared, which should cover 92 percent of the population by 2015.

But there are financial and regulatory hurdles to overcome. And in another wrinkle, LightSquared won't initially be offering conventional cell phone service, just data. It's possible to send phone calls over data connections, but that technology is not fully mature or standardized.

Still, LightSquared represents a rare new entrant in the wireless market. Only two other companies, Verizon Wireless and AT&T Inc., have firm plans to build nationwide networks using the same, fourth-generation network technology that LightSquared will use. Sprint Nextel Corp., through its Clearwire Corp. subsidiary, is building a third one with a different 4G technology that's likely to get less support from equipment makers.

Consumers won't buy service directly from LightSquared. Instead, it will sell access wholesale to other companies that can resell it to consumers. LightSquared hopes to attract cable TV providers, phone companies that don't have wireless networks of their own and retailers that want to provide wireless service under their own brand.

Dan Hays, who focuses on telecommunications with consulting firm PRTM, said LightSquared "could provide a renewed opportunity for retailers and major brands such as Wal-Mart, Best Buy, and Office Depot to enter the wireless market as service providers to consumers."

LightSquared plans to start providing service in the second half of 2011 in Las Vegas, Phoenix, Denver and Baltimore.

LightSquared said Nokia Siemens Networks will build, maintain and operate the network under a $7 billion, eight-year contract. Nokia Siemens is a joint venture of Finland's Nokia Corp. and Siemens AG...
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