Sony to ax 10,000 jobs in turnaround bid: Nikkei

Mon, Apr 09 09:13 AM EDT
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By Chris Gallagher

TOKYO (Reuters) - Japan's Sony Corp is cutting 10,000 jobs, about 6 percent of its global workforce, the Nikkei newspaper reported on Monday, as new CEO Kazuo Hirai looks to steer the electronics and entertainment giant back to profit after four years in the red.

The job cuts would be the latest downsizing in Japan Inc where companies from cellphone maker NEC Corp to electronics firm Panasonic Corp are trimming costs in the face of a strong yen and competition from rivals like Apple and Samsung Electronics.

TV makers in particular have been hit hard by the tough business climate as well as sharp price falls, with Sony, Panasonic and Sharp expecting to have lost a combined $17 billion in the fiscal year just ended.

Investors will closely monitor a briefing on Thursday by Hirai, who formally took over this month as chief executive from Howard Stringer, for further clues on how Sony plans to revamp its business.

"Under a new CEO, it's easier to cut jobs or go in a new direction," said Yuuki Sakurai, head of fund manager Fukoku Capital, which had around $7 billion worth of assets under management as of end-March 2011.

"One of the things I'd like to see is that they shift their resources to other areas outside TVs ... If they stick to TVs, they may have to fight a war they may not be able to win."

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Sony sees $2.9 bln loss, CEO warns of pain

Hirai to get tough on costs

Sony earnings graphic: http://r.reuters.com/wah46s

Sony to sell chemical business

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The Nikkei said half of the latest round of job cuts would come from consolidating the firm's chemicals and small and midsize LCD operations.

Sony said last month it was selling a chemical products division, accounting for some 3,000 people, while on April 1 it merged its Sony Mobile display unit, which had about 2,000 workers, with the small LCD panel businesses of Toshiba Corp and Hitachi Ltd into a new firm called Japan Display.

The Nikkei said it was not clear how many of the cuts would take place in Japan or overseas.

As of end-March 2011, Sony had 168,200 employees on a consolidated basis, according to the company's website.

Sony may also ask its seven executive directors who served through the fiscal year to end-March, including Stringer, who is now chairman, to return their bonuses, the Nikkei said.

Sony declined to comment on the report.

Sony announced 16,000 job cuts in December 2008 after the global financial crisis battered demand for its products, but it has not managed to make a profit since then.

The company has forecast a 220 billion yen ($2.7 billion) net loss for the fiscal year just ended, hurt in large part by its ailing TV business.

Sony said last month that Hirai would keep direct charge of the TV business as part of a structural reorganization.

Sony shares closed up 0.6 percent, while the benchmark Nikkei average ended 1.5 percent lower. The stock has dropped more than 10 percent in the past 3 weeks since hitting a 7-month high.

(Reporting by Chris Gallagher; Additional reporting by Shinichi Saoshiro; Editing by Edmund Klamann and Ian Geoghegan)

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US to pursue vigorously antitrust case against Apple
Wed, Apr 11 12:28 PM EDT

WASHINGTON, April 11 (Reuters) - The U.S. Justice Department will "pursue vigorously" its antitrust lawsuit against Apple and two publishing houses over allegations that they conspired to fix prices for electronic books, the head of the agency's antitrust division, Sharis Pozen, said on Thursday.

The department settled with three other publishers who were accused of participating in the alleged scheme, and they will have to end their "most-favored nation" agreements with Apple and other e-book retailers, U.S. Attorney Eric Holder said.

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U.S. sues Apple, publishers in e-book price scheme
Wed, Apr 11 15:38 PM EDT
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By Diane Bartz and Poornima Gupta

WASHINGTON/SAN FRANCISCO (Reuters) - Apple Inc and publishers Penguin and Macmillan have decided to fight U.S. government charges that they conspired to fix the prices of e-books, even as three other publishers agreed to a settlement aimed at lowering prices for consumers.

The Justice Department accused Apple of colluding with the five publishers, as the Silicon Valley giant was launching its iPad in early 2010 and was seeking to break up Amazon's low-cost dominance in the digital book market.

The settlement reached with three of the publishers will allow Amazon.Com Inc and Barnes & Noble Inc to resume discounting books, and will terminate the "most favored nation" contracts with Apple.

Amazon said in response to the settlement that it plans to lower prices on books associated with its Kindle e-reader.

The pact also requires the publishers to wait two years before entering into any agreements that require an "agency model" that prevent retailers from offering discounts on electronic books.

The publishers who agreed to settle are News Corp's HarperCollins Publishers Inc, CBS Corp's Simon & Schuster Inc and Lagardere SCA's Hachette Book Group.

Hachette and HarperCollins also settled with a group of U.S. states, agreeing to pay $51 million in restitution to consumers who bought e-books.

James McQuivey, a media analyst at Forrester Research, said e-book prices were destined to come down, even without a Justice Department settlement, because publishers have still been experimenting with drastic deep discounting to stimulate sales.

"It essentially will accelerate the reversion back to the sub-$10 prices that Amazon had already established as the standard," McQuivey said.

DEFIANT MACMILLAN

U.S. Attorney General Eric Holder told a news conference in Washington that executives at the highest levels of Apple and the publishers worked together to eliminate competition among sellers of e-books.

"As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles," Holder said.

The Justice Department said it will vigorously pursue the suit against Apple and the publishers that did not settle. The federal lawsuit was filed in the U.S. District Court for the Southern District of New York.

Apple declined to comment. A person familiar with the matter said Apple has not been part of the settlement negotiations.

Macmillan Chief Executive John Sargent released a defiant letter to the book industry on Wednesday saying the publisher did not act illegally and did not collude.

Sargent said Macmillan had been in discussions with the Justice Department for months, but the settlement terms were "too onerous".

"After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model," Sargent said.

Hachette said in a statement that it reluctantly agreed to join the federal and state settlements, and that it "was not involved in a conspiracy to illegally fix the price of eBooks."

The three other publishers, including Pearson Plc's Penguin Group, could not be reached for comment.

The European Commission is also probing Apple and publishers in a similar antitrust probe. It said on Wednesday that it had received settlement proposals from Apple and four publishers - Simon & Schuster, Harper Collins, Hachette Livre and Macmillan parent Verlagsgruppe Georg von Holtzbrinck.

JOBS' ROLE

The U.S. government alleged that Apple and the publishers had a common interest in fighting Amazon's practice of selling e-books for as little as $9.99 as it was building market share and trying to drive sales of its Kindle reader.

Apple's late co-founder and technology legend

Steve Jobs figures prominently in the Justice Department's lawsuit with many instances of his personal involvement in negotiations with publishing executives about deal terms.

"Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99," Jobs wrote to one of the publishers, according to the Justice Department's complaint.

Apple successfully persuaded the publishers to adopt an agency model that allowed publishers to set the price of e-books and in turn, Apple would take a 30 percent cut. The Apple agreements with publishers effectively barred them from allowing rival retailers to sell the same books at lower prices.

The strategy upended the "wholesale model" in which retailers pay for the product and charge what they like.

In one instance during the summer of 2010, Jobs spoke by telephone to the chief executive of a publishing firm that was holding out, according to the lawsuit.

"Apple flatly refused to sell the holdout publisher's e-books unless and until it agreed to an agency relationship substantially similar to the arrangement between Apple and the Publisher Defendants defined by the Apple Agency Agreements," the government's lawsuit said.

The e-book industry has continued to explode, despite the increase in prices that occurred after Apple reached its deals with the publishers.

The market has grown from $78 million in sales in 2008 to $1.7 billion in 2011, according to Albert Greco, a book-industry expert at the business school of Fordham University.

Greco has estimated e-book sales will be $3.55 billion in 2012.

(Reporting By Diane Bartz and Poornima Gupta, with additional reporting by Jennifer Saba, Grant McCool and Jeremy Pelofsky; Editing by John Wallace and Tim Dobbyn) ===================== Apple courts EPIX for upcoming TV: sources Fri, Apr 27 16:51 PM EDT image By Ronald Grover and Lisa Richwine LOS ANGELES (Reuters) - Apple Inc began talks earlier this year to stream films owned by EPIX, which is backed by three major movie studios, on devices including a long-anticipated TV, according to two people with knowledge of the negotiations. Apple, which now sells a $99 set-top box that hooks up to a television set and lets users stream online content from Netflix and the MLB channel, opened discussions with three-year-old EPIX, created by Lions Gate Entertainment Corp, MGM and Viacom's Paramount Pictures. One of the sources told Reuters that any discussions would apply to its set-top box and also to upcoming devices that stream content. Apple is widely expected to unveil a full-fledged TV product later this year or in early 2013 to drive its next phase of growth and potentially revolutionize the industry. Apple has been stymied for much of the past year in securing marquee Hollywood content. Talks with EPIX are in the preliminary stages and no agreement is considered near, the source said. The talks could be complicated by EPIX's 2010 agreement with Netflix, which pays $200 million a year for the rights to stream movies to its 23.4 million U.S. clients. That deal gives Netflix exclusive streaming rights to EPIX movies through September - before Apple is expected to trot out its planned TV set. Apple declined to comment on what it called "speculation." A Netflix spokesman had no immediate comment. An EPIX spokesman had no comment. Netflix CEO Reed Hastings said in an April 23 conference call with analysts that the DVD and streaming service was in a "broad range of discussions" with EPIX about "how to operate most effectively for both of us." EPIX currently offers movies such as "Rango" and "The Lincoln Lawyer." It will soon add "Thor" and "Transformers: Dark of the Moon," Netflix said in a letter to investors. Apple has become the world's most valuable corporation by dint of the popularity of its iPhone, which helped revolutionize the smartphone industry, and its more recent iPad. But many on Wall Street say that with the death of visionary co-founder Steve Jobs, new CEO Tim Cook could take the company forward with a major new product, such as the much-speculated Apple TV. Apple unsuccessfully tried last year to secure agreements with Hollywood studios for movies and TV shows that it could fashion into its own version of a TV service, according to studio executives who were contacted. EPIX does not have agreements with larger cable operators like Comcast Corp and Time Warner Cable or with satellite service DirecTV. It has contracts with the Dish satellite service, Cox Cable and other cable operators, it says on its website. Shares in Netflix closed down 1.6 percent at $83.74 on the Nasdaq. Apple, which snapped a two-week losing streak this week after better-than-expected results, finished off 0.8 percent at $603. (Reporting By Ronald Grover, Lisa Richwine; Yinka Adegoke, Poornima Gupta; Editing by Gary Hill) =============== Apple, Samsung patent trial set to kick off in U.S., billions at stake Mon, Jul 30 08:57 AM EDT 1 of 3 By Dan Levine (Reuters) - Jury selection is due to begin on Monday in the United States in a high stakes patent battle between Apple Inc and Samsung Electronics Co Ltd, the culmination of over a year of pretrial jousting with billions of dollars in the balance. Apple and Samsung, the world's largest consumer electronics corporations, are waging legal war around the world, accusing each other of patent violations as they vie for supremacy in a fast-growing market for mobile devices. The fight began last year when Apple sued Samsung in a San Jose, California federal court, accusing the South Korean company of slavishly copying the iPhone and iPad. Samsung countersued. The stakes are high, with Samsung facing potential U.S. sales bans of its Galaxy smartphones and tablet computers, and Apple in a pivotal test of its worldwide patent litigation strategy. Apple will try to use Samsung documents to show its rival knowingly violated the iPhone maker's intellectual property rights, while Samsung argues Apple is trying to stifle competition to maintain "exorbitant" profit, according to court filings. A 10-member jury will hear evidence over at least four weeks, and it must reach a unanimous decision for Apple or Samsung to prevail on any of their claims. That the jurors will hail from Silicon Valley, where Apple is an icon and major employer, will be something for Samsung to consider during the jury selection, said James Dobson, a jury consultant with Empirical Creative. "Although certainly if I were Samsung I would be concerned about what prospective jurors think about Apple, given that it's a huge employer there," Dobson said, "by and large jurors want to do the right thing and decide the case on the merits." It has been tough going so far for Samsung in the case. U.S. District Judge Lucy Koh halted U.S. sales of the Galaxy Tab 10.1, giving Apple a significant early win. This was followed by a pretrial ban on the Galaxy Nexus phone. Samsung has appealed both orders. The trial is expected to last at least four weeks. The case in U.S. District Court, Northern District of California, is Apple Inc v. Samsung Electronics Co Ltd et al, No. 11-1846. (Reporting By Dan Levine; Editing by Tim Dobbyn) === Apple seeks severe punishment for Samsung lawyer's actions Thu, Aug 02 12:53 PM EDT By Dan Levine SAN FRANCISCO (Reuters) - Apple Inc asked a U.S. judge on Thursday to punish Samsung Electronics Co Ltd for a Samsung attorney's conduct by ordering that the South Korean company has infringed Apple's phone design patents, according to a court filing. Trial began this week in high stakes litigation between the two companies. Apple sued Samsung last year in San Jose, California federal court, accusing Samsung of copying the iPhone and iPad. Samsung has countersued.

U.S. District Judge Lucy Koh on Tuesday had barred Samsung's attorneys from presenting some evidence during opening statements. Later that afternoon, Samsung emailed reporters links to that material, along with a statement that "fundamental fairness requires that the jury decide the case based on all the evidence." Samsung attorney John Quinn, of the law firm Quinn Emanuel Urquhart & Sullivan, acknowledged in a court filing on Wednesday that he authorized the press statement but said it was not designed to influence the jury. "The members of the jury had already been selected at the time of the statement and the transmission of these public exhibits, and had been specifically instructed not to read any form of media relating to this case," Quinn wrote.

Apple called his conduct "egregious, because it impugned the integrity of the court," according to its legal brief on Thursday. Samsung spokesman Adam Yates said the company will be submitting a response. "Apple's filing is baseless," Yates said. A typical sanction for attorney misbehavior is a monetary fine, but Apple is asking Koh to rule that Apple's phone design patents in the case are valid, and that Samsung has infringed them. Those are issues that the jury has been empanelled to decide. The trial is set to resume on Friday. The case in U.S. District Court, Northern District of California, is Apple Inc v. Samsung Electronics Co Ltd et al, No. 11-1846. (Reporting By Dan Levine; Editing by Tim Dobbyn) ================= Foxconn reopens huge China factory after riot Mon, Sep 24 22:21 PM EDT TAIYUAN, China (Reuters) - A Chinese factory owned by iPhone assembler Foxconn resumed production on Tuesday after a riot involving 2,000 workers had forced it to close for 24 hours, in an incident that put Chinese labor conditions back under the microscope. The huge factory that employs some 79,000 workers in northern Taiyuan city erupted into violence late on Sunday and into the early hours of Monday morning after what the plant's owner, Foxconn Technology Group of Taiwan, described as a personal dispute that spun out of control. Workers on Tuesday morning walked back through the gates of the factory, which was still ringed by police and showed clear signs of damage caused by the fighting, in which 40 people were injured, according to Foxconn and Chinese local media. Some gates were still flat on the ground, having been bent over, and windows were smashed. A loud speaker on a loop recording called for people to maintain social order. Foxconn, which assembles Apple's iPhones as well as making components for other global electronics firms, has faced accusations of poor conditions and mistreatment of workers at its plants in China, where it employs about 1 million people. The company says it has been spending heavily in recent months to improve working conditions and to raise wages. Foxconn spokesman Louis Woo said on Tuesday that the one-day closure would not disrupt supplies from the factory. "We have 79,000 people working in the Taiyuan campus, and we always have spare inventory," Woo said. Foxconn does not confirm which of its plants supply Apple, but an employee told Reuters that the Taiyuan plant was among those that assembled and made parts for Apple's iPhone 5. Foxconn said in a statement the incident had escalated from a row between several employees at around 11 p.m. on Sunday in the privately managed workers' dormitory, and was brought under control by police at around 3 a.m. Comments posted online, however, suggested security guards may have been to blame. Foxconn is the trading name of Hon Hai Precision Industry Co, the world's largest contract maker of electronics. (Reporting by Michael Martina in TAIYUAN and Clare Jim in TAIPEI; Editing by Mark Bendeich and Ken Wills) =========== China brawl Foxconn brawl reflects China's economic challenges 24 September 2012 | By Richard Beales Print Email Save . Monday’s violence at a Foxconn Technology factory shows the dark side of China’s expertise supplying shiny gadgets to the world. The combination of 79,000 employees, excess hours and dependence on a tough employer made a recipe for tension. Foxconn, the trading name for Taiwan’s Hon Hai Precision Industry, has contributed to China’s success. Its huge factories across the Middle Kingdom have brought jobs for around a million people. Even critics concede they mostly pay above the minimum required wages. And with customers like Apple, Foxconn has been central to China’s dramatic export-led growth in recent years. Yet working conditions are a concern. The electronics industry is not the worst offender. But perhaps because of its gigantic factories and high-profile, hugely profitable customers like Apple, Foxconn has attracted critical attention. Despite efforts by both Apple and Foxconn to improve conditions at its factories in China, they still fall short. It may be no coincidence that the Taiyuan factory boiled over the same weekend that Apple’s iPhone 5 went on sale to huge demand. At times of peak production some employees work more than the recommended or legal maximum hours, according to the Fair Labor Association which has investigated labor practices at several Foxconn factories (though not at Taiyuan). Reports of the disturbance, which may have started in a dormitory – not to mention the seemingly heavy-handed response – conjure up Western prison riots. That’s an extreme comparison, but there are echoes. Foxconn runs giant, secure campuses full of people working long hours, far from their families and often totally dependent on their bosses. Maintaining relations among tens of thousands of employees at close quarters would tax the best managers in the world. But as China gets richer and its leaders try to develop the domestic economy, it’s reasonable to wonder about the long-term sustainability of the Foxconn model. Factory unrest – of which this was only the latest instance – and possible consequences like higher wages also raise the risk that global customers could go elsewhere. Of the midrange iPhone 5’s $749 price tag, only $8 is the assembly cost that might go to Foxconn, according to IHS iSuppli. Apple’s profit dwarfs that, but other hardware producers have much less room in their margins. The brawl at Taiyuan reflects, on a small scale, China’s broader challenges. ============ Foxconn Technology, which assembles Apple’s iPhones and makes components for top global electronics companies, closed a plant in China on Sept. 24 after about 2,000 workers were involved in a brawl at a company dormitory. Foxconn is the trading name of Taiwan’s Hon Hai Precision Industry. It was not clear how long the shutdown would last at the plant, which employs about 79,000 people in the northern Chinese city of Taiyuan. Foxconn does not confirm which of its plants supply Apple, but an employee told Reuters that the Taiyuan plant is among those that assemble and make parts for Apple’s iPhone 5. Criticism of labor conditions at Foxconn - including factors that contributed to deadly accidents - led to an investigation in March by the Fair Labor Association, sanctioned by Apple, of conditions at three Foxconn locations. The review did not include the Taiyuan factory. The FLA’s investigation revealed “serious and pressing non-compliances with FLA’s Workplace Code of Conduct, as well as Chinese labor law” including excessive hours during peak production, health and safety issues, poor worker relations, and unfair wage practices - though wages were above legal minimums. ================== Foxconn's iPhone plant "paralyzed" as thousands strike: report Fri, Oct 05 23:34 PM EDT SAN FRANCISCO (Reuters) - Thousands of workers went on strike Friday at a Foxconn plant in central China that makes Apple Inc's iPhone 5, paralyzing production of the smartphone, the rights advocate group China Labor Watch reported. The reported strike comes at a crucial time for the U.S. corporation, weeks after kicking off its largest-ever global rollout of the smartphone. Apple is already struggling with supply constraints, analysts say. Citing workers, the labor group said 3,000 to 4,000 workers began their strike at Foxconn's Zhengzhou complex in central China in the afternoon, angered by over-exacting quality controls as well as demands they work through the week-long National Day holidays, which began on Monday. The strike could not be immediately confirmed, and nor was it clear whether the stoppage was over or continuing. Some Chinese media carried reports of the China Labor Watch account, but did not offer any verification. Apple declined to comment. A Foxconn spokesman said the company was "gathering facts" on the reported strike and would issue a statement when ready. Tensions have boiled over repeatedly in factories operated by Foxconn, the Taiwanese contract manufacturing giant that employs more than a million and makes most of the world's iPads and iPhones. Last month, thousands rioted at its Taiyuan facility in northern China, disrupting production for about 24 hours and underscoring the potential for labor unrest. "In addition to demanding that workers work during the holiday, Foxconn raised overly strict demands on product quality without providing worker training for the corresponding skills," the Watch said in a statement on its website (http://www.chinalaborwatch.org/news/new-433.html). "Additionally, quality control inspectors fell into conflicts with workers and were beat up multiple times by workers. Factory management turned a deaf ear to complaints about these conflicts and took no corrective measures." The group did not say in its release when work might resume. Foxconn Technology Group of Taiwan, the trading name of Hon Hai Precision Industry Co, is the world's largest contract maker of electronics for global brands such as Hewlett Packard Co, Nokia and Dell Inc. Apple and Foxconn have come under fire for poor working conditions and wages at plants across China. In response, they have organized an audit of factory conditions, raised wages, improved safety and reduced overtime, among other measures. Apple's chief executive officer Tim Cook visited Foxconn's vast complex on the far outskirts of Zhengzhou in late March. (Reporting By Edwin Chan; Additional reporting by Jonathan Standing in Taipei; Editing by Richard Chang and Sanjeev Miglani) ===============