Strong sales at Airbus owner EADS

29 July 2011 Last updated at 06:46 GMT Airbus said there had been strong demand in the commercial aviation sector European aerospace giant EADS has reported first-half sales ahead of expectations, amid strong demand for its Airbus aircraft.

Sales rose 8% to 21.9bn euros ($31.3bn; £19.2bn), while it took orders worth 58.1bn euros in the period.

EADS said orders at the recent Paris Air Show had been "record-breaking".

However, net profit fell 41% on the first half of 2010 to 109m euros after the company faced higher financial charges at the beginning of the year.

And it said the weakening US dollar and British pound were offsetting higher sales.

"Deliveries remained at a high level, with 258 aircraft at Airbus Commercial, 205 helicopters at Eurocopter and the 44th consecutive successful Ariane 5 launch," EADS said.

'Continuing momentum'

Last month, American Airlines placed what it called "the largest aircraft order in history".

It ordered 260 Airbus A320 aircraft, as well as 200 Boeing 737s.

"Our results for the first half of 2011 mirror the strong demand in the commercial aviation sector," said EADS chief executive Louis Gallois.

"In terms of orders, Paris Air Show was record-breaking for us, particularly thanks to the A320neo.

"The recent historic order by American Airlines adds to this remarkable success story as the strong commercial momentum continues beyond Le Bourget."

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Global oil demand 'set to rise'

13 July 2011 Last updated at 09:59 GMT Continue reading the main story Global oil demand will increase further next year, the International Energy Agency (IEA) has predicted.

The IEA, which represents the main oil consuming nations, said the increase in crude usage would continue to be driven by emerging economies.

It estimates that demand will grow by an average of 1.47 million barrels a day in 2012, up from the current 2011 average daily growth of 1.2 million.

Last month, IEA members released oil stocks to try to reduce prices.

The move came after oil producers' cartel Opec voted against increasing supplies, although the world's largest producer, Saudi Arabia, did unilaterally raise its export levels.

US light crude oil was down 14 cents at $97.29 a barrel in Wednesday trading, while Brent was eight cents lower at $117.67.

Oil prices have fallen over the past week as concerns have risen that the debt crisis in the eurozone may spread to Italy and Spain, thereby reducing crude consumption in Europe.

However, crude prices have risen over the past year, led by strong demand from China and other fast-developing economies.

US light crude hit a record high of $147 a barrel in July 2008 before the global financial crisis hit global growth.

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AUDIO: Europe 'living in fantasy' over crisis

Was the deal put together by eurozone heads of state last week more sticking plaster than lasting solution?

Terry Smith, chief executive of Tullett Prebon, explains that although Europe's deal has "bought a bit of time", it has only "kicked the can down the road".

Get in touch with Today via email , Twitter or Facebook or text us on 84844.

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Budget long-haul?

27 July 2011 Last updated at 16:54 GMT By Saira Syed Business reporter, BBC News, Singapore While it's common to pay a cheap fare for a short flight to a holiday destination, the thought of forgoing leg room, hot meals and other "frills" for more than a few hours may not sound as appealing.

Yet some airlines are trying to bring the successful short-haul budget model to longer flights, with the latest entrant in South East Asia being Singapore Airlines (SIA).

Whether this model will work is one of the hot debates raging in the world of aviation.

Aggressive expansion

The move towards low-cost airlines in Asia has picked up pace in recent months, with a number of full service airlines trying to attract frugal flyers.

Japan's Peach Aviation starts operation between Osaka and domestic cities and Incheon airport in South Korea next year

Earlier this year, Japan's All Nippon Airways (ANA) launched Peach Aviation, a short-haul low-cost carrier based in Osaka.

It is expected to start flights in March 2012. A Thai Airways budget airline is also expected late next year.

The trend coincides with a forecast of a rise in air travel globally, lead by the Asia Pacific region.

The International Air Transport Association (Iata) estimates that by 2014 there will be 3.3 billion more air passenger journeys across all regions, up 800 million from 2009.

Of that 800 million, 45% will travel on Asia Pacific routes.

And budget airlines look set to capture the lion's share of that passenger growth.

Singapore-based low-cost Jetstar Asia increased its passenger numbers by 44% (from 1.8 million to 2.6 million) last year, whereas Singapore Airlines increased passengers by 1.8% (from 16.6 million from 16.3 million), according to Aviation Week, an industry publication.

And to facilitate all those extra passengers, budget carriers are racing to expand their fleets.

At the Paris Air show in June, India's Indigo placed an order for 180 new aircraft from Airbus.

Malaysia-based budget carrier Air Asia trumped that with a record purchase of 200 Airbus A320neo jets at a list price of $18bn (£11bn).

"Aviation is far from reaching a saturation point in Asia," according to Tony Fernandes, group chief executive of Air Asia. "There is definitely space for new players and for the expansion of existing ones."

In the case of Air Asia, that expansion is well under way.

It recently announced a partnership with ANA to start a budget airline in Japan called Air Asia Japan, to be based out of Narita Airport, near Tokyo.

It has similar joint ventures in south-east Asia, including Thailand, the Philippines and Vietnam.

As low-cost carriers expand, they are setting their sights further and further.

Complexity

Singapore Airlines is not the first to envision low fares on longer routes.

Air Asia, as part of their aggressive marketing campaign, sponsored the British Grand Prix this year

Air Asia already has a long-haul budget airlines called Air Asia X which flies to London and Paris from Kuala Lumpur.

But to be profitable while offering cheap flights on longer distances is no easy task.

Oasis, which used to fly from Hong Kong to London at low prices, went into liquidation and ceased operation in 2008, a mere 18 months after it was established.

"The [long-haul] business structure has an unproven track record, whereas short-haul has been successful," says Mark Webb, aviation analyst for HSBC in Hong Kong.

Mr Webb says the ways in which budget carriers save on costs on short-haul routes are largely not applicable for airlines on longer routes.

He says meal services and in-flight entertainment are examples of features that cannot be sacrificed on longer flights.

"Even if you charge for in-flight entertainment and food, you still need to provide those services and that adds complexity to your business model," he says.

The flights will also be less frequent, which means costs cannot be spread out over many flights back and forth each day - something short-haul carriers are able to do.

And then there is the added expense of keeping staff overnight at a destination.

Land grab?

But others say there is enough demand and that people are willing to put up with no frills on flights that are between five and eight hours long.

"[From Singapore] to Tokyo, Beijing, Shanghai and many destination in India, that will work," says Leithen Francis, Asia editor for Aviation Week.

"We're not really talking about long-haul, we're talking about the next step beyond short-haul. But going that extra distance, you open up a whole lot of new markets."

That would allow Singapore Airlines to attract price conscious consumers such as students, pensioners, backpackers and small businesses.

But profitability aside, it is also about marking your territory.

"Another reason for setting up low-cost carriers is for defensive reasons, to stop an aggressive competitor from getting those routes," says Mark Webb.

"The key to success in low-cost carriers is route dominance," he adds.

Air Asia announced a joint venture with Japan's All Nippon Airways increasing its reach in Asia

Singapore Airlines is confident the long-haul budget airline will make them money.

"The decision to launch this new airline came after a lot of review and analysis," says spokesman Nicholas Ionides. "We wouldn't be getting into this business if we didn't think it could be profitable for the SIA group."

The airlines' shifting focus towards its investment in the budget carrier sector is underlined by its involvement in the grounding of Tiger Airways.

Australian authorities grounded Tiger Airways' entire fleet in Australia this month on safety concerns. SIA owns more than 30% of the low-cost carrier.

And although SIA insists it is not involved in the management of Tiger Airways, immediately after the grounding Chin Yau Seng, the former chief executive of SIA's regional carrier Silk Air, was appointed as Tiger Airways' acting chief executive officer.

The way SIA handled the recent troubles facing Tiger Airways shows the growing importance of budget carriers in the Asian skies.

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Apple holding more cash than US

29 July 2011 Last updated at 12:55 GMT US President Barack Obama is known to be an iPad owner, along with 28 million other people Apple now has more cash to spend than the United States government.

Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn (£45.3bn).

Apple's most recent financial results put its reserves at $76.4bn.

The US House of Representatives is due to vote on a bill to raise the country's debt ceiling, allowing it to borrow more money to cover spending commitments.

If it fails to extend the current limit of $14.3 trillion dollars, the federal government could find itself struggling to make payments, and risks the loss of its AAA credit rating.

The United States is currently spending around $200bn more than it collects in revenue every month.

Apple, on the other hand, is making money hand over fist, according to its financial results.

In the three months ending 25 June, net income was 125% higher than a year earlier at $7.31bn.

Spending spree

With more than $75bn either sitting in the bank or in easily accessible assets, there has been enormous speculation about what the company will do with the money.

"Apple keeps its cards close to its chest," said Daniel Ashdown, an analyst at Juniper Research.

Industry watchers believe that it is building up a war chest to be used for strategic acquisitions of other businesses, and to secure technology patents.

Bookstore Barnes and Noble and the online movie site Netflix have both been tipped as possible targets, said Mr Ashdown.

The company may also have its eye on smaller firms that develop systems Apple might want to add to its devices, such as voice recognition.

Apple dipped into some of its reserves recently when it teamed-up with Microsoft to buy a batch of patents from defunct Canadian firm Nortel.

The bidding consortium shelled out $4.5bn for more than 6,000 patents.

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HMRC service standards lambasted

29 July 2011 Last updated at 23:00 GMT The tax authorities are not as welcoming as they should be, the MPs found The way taxpayers are treated by HM Revenue & Customs has been lambasted by MPs on the Treasury select committee.

Their latest report says public dissatisfaction risks undermining public confidence in the tax system.

The worst problems were in getting tax offices to answer phone calls at peak times and "endemic" delays in replying to letters.

HMRC said it had taken steps to improve its service in the past year but admitted it had "more to do".

"We have recruited 1,000 additional contact centre advisers to manage exceptionally busy periods this year," said a Revenue spokesman.

"We have improved the way we deal with post, for example, rapidly reducing turnaround times on PAYE and self-assessment post.

'Disturbing'

The MPs report blamed bad management, demoralised staff, excessive job cuts, and increasingly complex tax laws for the poor level of service it had discovered.

"The evidence we have received in this inquiry has been disturbing," the MPs said.

"HMRC's delivery of services to the general public has fallen to unacceptable levels in several areas.

"There is considerable dissatisfaction among the public and tax professionals with the service provided by the department," the MPs added.

Frank Haskew, of the Institute of Chartered Accountants of England and Wales (ICAEW), doubted that the situation would improve.

"Given the necessity to reduce the current 70,000 staff by a further 10,000, we are not convinced that HMRC have the resources or the capability to deliver on improving service standards," he said.

'Damaging impact'

This concern about the future was echoed by the MPs. They said that the HMRC did a good job in collecting taxes.

But they were worried that the quality of service for taxpayers could become even worse.

They pointed to:

excessive reliance on the internet for filing tax returns, or giving information, to the disadvantage of those without good internet connections "overly ambitious" computer projects such as the forthcoming plan to make employers submit "real-time" data for the PAYE systemthe continuing legacy of unresolved tax discrepancies from past years still affecting millions of tax payerssenior management's approach to running HMRC which the MPs described as "very disturbing"increasingly complex tax lawsthe possibility that further job and spending cuts could undermine the department's ability to do its job properly.

"We are concerned that HMRC's performance will continue to deteriorate if further reductions in resources are badly managed," the MPs said.

"There was near unanimity among our witnesses that the reductions made so far have had a damaging impact."

Make it easier

Other tax advisers agreed with this diagnosis.

Chas Roy-Chowdhury of the Association of Chartered Certified Accountants (ACCA) warned: "If reduced funding leaves HMRC unable to address the basics of maintaining a service for compliant taxpayers, the potential damage to the economy and reputation of the United Kingdom is immense."

Robin Williamson, of the Low Incomes Tax Reform Group (LITRG), said: "If HMRC want to improve taxpayer compliance and reduce error levels, they need to make it easier for people to contact them and get advice that is prompt, accurate and understandable."

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Post may be left with neighbours

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Moody's warns over Spanish rating

29 July 2011 Last updated at 14:48 GMT Spain is continuing to see a number of protests about spending cuts and high unemployment Moody's has warned it may downgrade the credit rating of Spanish government bonds, saying last week's second rescue package for Greece had done little to ease debt concerns in the eurozone.

The rating agency said it was reviewing Spain's current Aa2 grade, adding that if it was downgraded, it would probably be by just one level, to Aa3.

Moody's added that the Spanish economy remained "subdued".

The Spanish government has now called an early general election.

The announcement was made just hours after Moody's made its credit rating warning, and will see Spain go to the polls on 20 November.

Explaining the decision, Prime Minister Jose Luis Rodriguez Zapatero said he wished to "project political and economic certainty" over the months ahead.

However, it could be benefit the opposition conservative Popular Party, as it is ahead of the ruling Socialist Party in the polls.

The government could have waited until March of next year to hold the general election.

'Bond precedent'

In explaining why it was reviewing Spain's credit rating, Moody's highlighted the fact that as part of the second bail-out deal for Greece, private bondholders were being invited to participate.

Continue reading the main story Sarah Rainsford BBC News, Madrid

This is another blow to Spain - anxious to convince investors it won't need a Greek-style bailout. But Moody's still has concerns, so it has put Spain on review, for what's likely to be a one-notch downgrade of its government debt.

The ratings agency points to the slow pace of economic growth here, and the high levels of debt in Spain's autonomous regions. They account for almost half of state spending and several warn they'll overshoot the budget deficit target set by Madrid.

The Prime Minister, Jose Luis Rodriguez Zapatero, has insisted that won't affect his target of cutting Spain's overall deficit to 6% by the end of the year. But investor doubts, coupled with concern over the details of the latest bailout for Greece, has already pushed Spain's borrowing costs higher and higher.

The Prime Minister has now announced an early general election for November; the main opposition party has long insisted a change of government is the only way to recover confidence in this economy.

The private bondholders, such as banks, are being asked to exchange their current Greek bonds for ones which pay a lower rate of interest over a longer term.

Moody's said this set a "precedent", adding that it had "signalled a clear shift in risk for bondholders of countries with high debt burdens or large budget deficits".

However, if Spain is downgraded to Aa3, this remains a healthy investment grade.

Moody's also said five Spanish banks could have their credit ratings downgraded because of the same concerns.

These include the largest two lenders, Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA).

'Fiscal slippage'

Despite the forthcoming general election campaign, Spain's central government is continuing to enforce cost-cutting efforts to reduce its public deficit.

However, Madrid is hampered by the fact that Spain is a heavily devolved country, and its regional governments, such as those in Catalonia and the Basque region, are not moving as fast or as deep in trimming their spending.

Moody's highlighted this problem, warning of "fiscal slippage" at the regional and local government level.

Spain is also struggling with the eurozone's highest unemployment rate, which now stands at 20.9%.

Spain's main share index was down 0.7% in afternoon trading, after falling as much as 2.4% immediately following Moody's announcement.

The yield on the Spanish government's 10-year bonds rose 10 percentage points to 6.10%.

The euro declined, falling 0.3% against the dollar to $1.4287.

"The trigger is that the [Greek] deal last week has not really rebuilt confidence across the eurozone, so Spain is still on their radar screens with costs rising," said Giada Giani, analyst at Citigroup.

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Oil price rise lifts Exxon profit

28 July 2011 Last updated at 13:11 GMT Rex Tillerson says that his firm is investing at record levels to meet oil demand US oil giant Exxon Mobil has reported a rise in quarterly profits on the back of higher oil prices.

The company said that net profit rose to $10.7bn (£6.6bn) for the three months to June, up 41% from the same period last year.

The profit was its largest since the third quarter of 2008. The firm said production had risen by 10%.

Higher oil prices have also boosted rivals such as Royal Dutch Shell, which reported a 77% jump in profits.

The price of oil has surged in the past year, driven by political unrest in oil-producing countries.

The price of a barrel of benchmark US light sweet crude oil is up to around $97 a barrel currently, from $78 a year ago.

Record demand

Exxon said its increase in production had been driven by its fields in Qatar and its gas portfolio.

Chairman Rex Tillerson said the company was "investing at a record level of over $10bn to develop new supplies of energy to meet growing world demand".

In the quarter, Exxon announced two new oil discoveries and a gas field in the Gulf of Mexico after drilling the company's first deepwater exploration well since a moratorium on drilling in the area ended.

The moratorium was put in place following the huge oil spill last summer from the Deepwater Horizon well.

Earlier this week, BP announced second-quarter profits of $5.3bn.

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Rising costs hit Centrica profits

28 July 2011 Last updated at 12:25 GMT British Gas says it has been selling at a loss British Gas owner Centrica has reported operating profits of £1.3bn in the six months to 30 June, down 19% on the same period last year.

The results include a 54% fall in operating profits at its residential energy division, British Gas, to £270m.

British Gas says higher wholesale gas prices and lower energy use are responsible for the fall in profits.

The news comes as the firm prepares to raise gas prices by 18% and electricity prices by 16% in August.

Higher bills

The planned bill increases will push up the average bill for around nine million customers by £190 a year.

It comes as the group announces a 12% increase in its dividend to shareholders.

Richard Lloyd from consumer group Which? warned that customers would be angry.

Continue reading the main story

Pain for customers is a reward for shareholders. Now these are not two distinct groups: millions of people hold British Gas shares indirectly through their pension schemes. But, if asked, many of those saving for a pension would probably sacrifice the dividend for lower energy prices.”

End Quote Robert Peston Business editor, BBC News "These profits come at a terrible time for people who are being clobbered by these 18% rises in gas bills and 16% rises in electricity bills," he said.

British Gas says it has been selling gas at a loss since April due to the rising cost of gas on the wholesale markets.

"UK wholesale gas prices have risen by around 30%, reflecting unrest in the Middle East and North Africa and increased global demand for gas, in part due to closures of nuclear plants in Japan," the company said.

The company said that without the August price rises, it would have made a loss in the second half of the year, "wiping out" the £270m profit its residential business made in the first six months of the year.

Overseas investment

Centrica says it expects to invest £1.3bn to secure new sources of energy this year - much of this investment will be outside the UK.

The company has confirmed it will scale back its future investment in UK gas production partly due to new taxes on oil and gas production in the North Sea.

The new taxes cost the company £204m in the six months to June 30 according to its results. It has already mothballed some North Sea production.

Profits from its own operations, which include production in the North Sea and Trinidad, increased by 14% to £414m.

Some analysts have suggested the tax rise still allows Centrica to make a profit in the North Sea.

"Whilst none of these companies will like a tax rise at the same time it is still enormously profitable to invest in the North Sea and I think some of these companies may be overplaying how unattractive the tax rise makes it," said David Hunter, an energy analyst at M&C Energy.

Centrica also said it plans to slow down its investment in new nuclear power stations in the UK.

"Investors are putting pressure on them specifically around the nuclear project where they are a junior partner, some are saying they shouldn't touch it with a barge pole," said Mr Hunter.

Warm weather

In its core business of home gas supply British Gas lost customers and market share compared with the same period last year.

Customer accounts for gas were down 0.7% from last year and market share down 0.5%, though it picked up customers for electricity supply.

That helped overall customer numbers at British Gas, which trades as Scottish Gas in Scotland, to rise - up 159,000 to 16.1 million accounts.

Warmer weather also saw a big fall in residential gas use, down 18% on the previous year, and a 3% drop in electricity consumption, further hurting profits.

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Premium travellers boost BA group

29 July 2011 Last updated at 08:46 GMT International Airlines Group CEO Willie Walsh: "It's good to be back in the black"

International Airlines Group (IAG), formed by the merger of BA and Iberia, has swung to a first-half profit of 39m euros (£34m), boosted by a rise in premium travellers.

That compared with a 419m-euro loss made in the same period a year earlier.

But it said fuel costs had risen 34.8% to 2.4bn euros in the six-month period and said that fuel was still a "significant issue".

The company expects its annual fuel bill to total 5.2bn euros.

BA and Iberia completed their merger in January this year.

'Significant growth'

Revenues for the half-year rose 17.9% to 7.8bn euros.

The company also reduced its net debt by almost a half to 480m euros.

IAG said it had seen "continued strength in premium markets", adding that while its long-haul business was stable, the short-haul European market remained "highly competitive".

"We expect significant growth in operating profit this year, with improvements in both our unit revenue and unit cost performance versus 2010 and are on track to reach our synergy targets," IAG said.

But it said it expected the earthquake and tsunami in Japan and the political unrest in North Africa and the Middle East to reduce its operating profit for the year by 90-100m euros.

Charles Stanley analyst Douglas McNeill said: "These are good results at the upper end of expectations but the year-ago period was depressed by the ash cloud crisis and strikes at BA."

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Italy pays much more to sell debt

28 July 2011 Last updated at 14:51 GMT The recent bailout deal for Greece agreed by the eurozone has not calmed all of investors' fears Italy has had to pay much more to borrow than a month ago as investors continue to worry about its huge debts.

Italy had to pay an interest rate of 4.8% to sell 3.5bn euros ($5bn; £3.1bn) of three-year bonds - up 1.1 percentage points from June.

Despite multiple attempts to contain the Greek debt crisis spreading, Italy and Spain have seen their borrowing costs rise in recent weeks.

Italy has the largest sovereign debt of any European country.

The rate on benchmark 10-year bonds, also sold by Italy on Thursday, was 5.77% - up 0.8 percentage points from June.

As a percentage of output, Italy's debt is second only to Greece in the eurozone - whose huge debts have led to two bailouts.

'Difficult environment'

Since the Irish Republic and Portugal have also been bailed out in the past year, investors have begun to fear that Italy might be next.

The inability of the US to agree a deal to pay its debts has also put pressure on financial markets.

"The auction came in a very difficult market environment, with the issue of US debt ceiling still unresolved", and speculation about the future of Italian finance minister Giulio Tremonti, analysts at Unicredit said.

"All this did not help to create a friendly environment for the auction."

Italy passed a 70bn-euro austerity package earlier this month to reassure investors that the country will not succumb to the debt crisis.

Meanwhile, the French finance ministry says that French banks and insurers have promised to give Greece easier lending terms on 15bn euros of bonds they hold.

As part of the latest eurozone bailout deal for Greece, private lenders to the country have been given the option of extending their bonds into new debt with longer maturities and lower interest rates.

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BSkyB gives £1bn to shareholders

29 July 2011 Last updated at 12:52 GMT BSkyB chief executive Jeremy Darroch: "We've invested a lot in terms of what we put on screen and people like that"

Satellite broadcaster BSkyB is returning £1bn to shareholders angered by the recent fall in share prices.

Its shares have fallen sharply in the past month after News Corporation abandoned its bid for BSkyB amid the phone-hacking scandal.

The company said it had gained 426,000 customers over the past year.

Operating profits, excluding earnings from non-core activities such as investments, rose 23% to £1.07bn, while pre-tax profits fell 15% to £1.01bn.

On Thursday, BSkyB's board confirmed that James Murdoch would stay on as company chairman, despite the phone-hacking scandal at News International, a News Corporation subsidiary where Mr Murdoch is also chairman.

Continue reading the main story BSkyB chief executive Jeremy Darroch told BBC News he did not think Sky's broadcasting licence was at risk, regardless of what the investigations into News International and News Corporation found.

"The licence is held by the company (BSkyB) and the company is controlled by a majority of independent directors at board level," he said.

"We have got strong systems of control and strong standards right throughout Sky. It just makes me even more determined to ensure that they stay in place."

BSkyB is raising its dividend 20% to 23.28 pence per share and has announced a £750m share buyback.

This should help to placate shareholders, as the value of their shares has fallen 15% since in the past month.

Triple-play Continue reading the main story

One member of the board told me that the decision to back Mr Murdoch could not be seen as being forever. If evidence were to emerge that damaged the credibility of Mr Murdoch then the board would have to reconsider whether he needed to stand down.”

End Quote Robert Peston Business editor, BBC News BSkyB increased its customer base by 426,000 in the year to give it a total of 10,294,000 subscribers.

Average revenue per customer grew £31 to £539.

One of the key targets for media companies at the moment is persuading customers to subscribe to more of their products, combining fees for television access with services like broadband internet access and landline telephone services.

"Critically, they've put on a 37% increase in triple-play, that's people who take pay-TV, telephone and broadband," said Steve Hewlett from BBC Radio 4's Media Show.

"That's the holy grail - that's what everyone is after, and they've now got 27% of their customers, 2.8 million people, taking all three services."

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Data dilemma

27 July 2011 Last updated at 23:02 GMT Each week we ask high-profile technology decision-makers three questions.

Big data is posing a huge analytics problem, says Stephen Brobst

This week it is Stephen Brobst, chief technology officer (CTO) of Teradata.

Teradata is a technology company that specialises in data warehousing and analytic applications. The Ohio-based company has over 900 customers worldwide, and had revenue of $1.9bn in 2010.

What's your biggest technology problem right now?

I guess first of all when you think of problems, to an entrepreneur there's no such thing as problems - there's only opportunities.

If I were to put it in that light, we can look at the advancement in central processing unit (CPU)processing power over the last 30 years.

Moore's law basically allows you to double processing power every 18 months for the same cost. This has given us a 5m x improvement in CPU processing power.

At the same time input/ouput (I/O) from disk drives has only increased by a factor of five, so there's a huge imbalance between CPU processing power and I/O delivery rates from disk drives.

The disk drive manufacturers are increasing the density of storage on the disk drives, but they're not speeding up the disk drives at nearly the same rate. So the performance from an I/O perspective is decreasing on a per gigabyte basis at the same time as CPU power is increasing.

This leads to a dramatic imbalance in terms of computational configuration of processing architectures.

So that's a big problem that at Teradata we're addressing using what we call a virtual storage architecture, that allows us to combine in memory processing with solid state disk drives, together with electro-mechanical drives, because it's the electro-mechanical drives that are not keeping up with the CPUs.

On the other hand, in-memory and solid state drives (SSD) are more expensive per terabyte, so it doesn't make economic sense to store all of your data in-memory or SSD.

So what we have done is allow the data to be spread across multiple technologies, so you can optimise both price and performance at the same time.

What's the next big tech thing in your industry?

The next big tech thing is pretty clearly centred around the idea of big data. Not just the bigness of it - the volume of it - but also the diversity of it.

So with social media coming into play, with sensor data coming into play, the nature of data is changing dramatically.

It used to be essentially rows and columns of records being stored that were the result of doing business. But now data is the basis for creating new businesses. And this data comes in many different forms.

We believe the diversity of data, as well as the volume of data, is going to completely change the nature of analytics.

In the future, every object will know its location, will know its temperature, will know the humidity. All the vital signs for an object.

And that object might be a human by the way, for healthcare sensing. It might be an object in the supply chain so you know where the object is in your manufacturing plant.

Anything that's been shipped from one place to another, sensor devices will allow collection of huge amounts of data that by its very nature needs and wants to be analysed to drive better decisions.

So this big data, which is volumes of data but also diversity of data, is clearly the next big thing in our industry.

While CPU processing power has increased massively over the last 30 years, disk drives have lagged far behind, says Stephen Brobst What's the biggest technology mistake you've ever made - either at work or in your own life?

A number of years ago, Intel in a joint venture with Hewlett Packard developed a new chip architecture called Itanium.

I will take partial should I say discredit for the investments Teradata made in porting our software onto this new chip architecture.

It was supposed to be the next generation and take over the world in processing architectures and so on.

In the end it was dead on arrival.

They had schedule delays, there were a lot of issues between HP and Intel and in the end it was a dead chip. We wasted a lot of money porting our software onto Itanium.

Luckily we recovered pretty quickly and diverted those resources once it became clear this technology wasn't going to go anywhere.

But we clearly got diverted by this Itanium chip, which was not such a good decision and I will certainly take part of the blame for that decision.

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Samsung profit dips on low demand

29 July 2011 Last updated at 05:27 GMT Falling demand for LCD televisions has hit profits of electronics manufacturers in Asia Samsung has become the latest electronics maker to report a drop in profits due to a weak demand for TVs.

Samsung said net profit was 3.5tn won ($3.3bn; £2bn) in the second quarter, an 18% drop from a year earlier.

The company said its TV unit made a loss for the second successive quarter as sales of Liquid Crystal Display's (LCDs) fell 15%.

On Thursday, Sony reported a loss of $199m for the first quarter due to falling TV sales.

Analysts said weak demand for TVs would continue to hurt its profits in the short term.

"It will be difficult to boost earnings sharply in the third quarter as demand for memory chips and TVs will continue to remain depressed," said Song Myung-sup, an analyst at HI Investment & Securities.

"Its loss-making flat-screen business will also report break-even at best," he added.

However, the company reported robust growth in its mobile phone business with a 43% surge in sales.

Profits in the telecom unit rose by 6.3% from a year earlier to 1.7tn won.

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VIDEO: Retracing Grapes of Wrath route

In The Grapes of Wrath, John Steinbeck describes the harrowing journey of the Joad family - migrant workers forced to leave their farm during the Great Depression - a story still relevant to those facing the realities of America's current economic crisis, as Paul Mason found when he retraced their route.

Broadcast on Thursday 28 July 2011.

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Virtual people to get ID checks

29 July 2011 Last updated at 00:12 GMT Is that cyclops the same one you saw yesterday? The faces and behaviour of online avatars could help identify the people controlling them, scientists believe.

Using both characteristics, researchers hope to develop techniques for checking whether the digital characters are who they claim to be.

Such information could be used in situations where login details are not visible or for law enforcement.

Impersonation of avatars is expected to become a growing problem as real life and cyberspace increasingly merge.

Signature moves

Avatars are typically used to represent players in online games such as World of Warcraft and in virtual communities like Second Life.

As their numbers grow, it will become important to find ways to identify those we meet regularly, according to Dr Roman Yampolskiy from the University of Louisville.

Working out if their controller is male or female has an obvious commercial benefit, he said. But discovering that the same person controlled different avatars in separate spaces would be even more useful.

As robots proliferate we will need ways of telling one from the other, said Dr Yampolskiy.

"It's useful for profiling of avatars for marketing purposes by businesses in virtual worlds," explained Dr Yampolskiy.

"It also has some applications in forensic tracking of avatars across multiple virtual communities."

The technology may also have implications for security if a game account is hacked and stolen.

Behavioural analysis could help prove whether an avatar is under the control of its usual owner by watching to see if it acts out of character.

The research looked at monitoring for signature gestures, movements and other distinguishing characteristics.

Limited expressions

Researchers discovered that the lack of possible variations on a avatar's digital face, when compared to a real human, made identification tricky.

However, those limited options are relatively simple to measure, because of the straightforward geometries involved in computer-generated images.

Dr Yampolskiy's team generated large data sets made up of many possible faces in Second Life and Entropia Universe and then studied them to spot key characteristics.

"It's very preliminary work as we are still collecting data," he said. "So far we have been very successful."

Dr Yampolskiy pointed out that another factor driving the need for avatar identification was the increasing use of telepresence and augmented reality.

Especially for businesses, it will be important to ensure that on-screen facsimiles represent the people they purport to.

Further work by the group will extend the identifying work and behaviour monitoring to robots.

As more and more machines start to work alongside people access to controlled areas would rely on being able to tell one from another.

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Starbucks profits rise by a third

28 July 2011 Last updated at 21:46 GMT Starbucks wants to earn half its revenues from outside the US US coffee giant Starbucks has reported a sharp rise in profits and increased its full-year forecasts as global sales continued to grow.

Net income for the three months to 3 July was $279.1m (£170.5m), up 34% on the $207.9m the company made a year earlier. Revenue was up 12% at $2.93bn.

Like-for-like sales, which strip out the impact of new stores, rose by 8%.

The results were better than analysts had expected and Starbucks' shares rose in after-hours trading.

"Starbucks record third quarter results reflect both the underlying strength and continuing momentum we have been experiencing across all of our business segments and around the world," said chief executive Howard Schultz.

"Starbucks has never been healthier."

International revenues rose by 20%, while those in the US were up 9%.

Earlier this month, Starbucks unveiled a reorganisation of its global operations as aims to raise half of its revenues from outside the US.

The company currently earns less than 25% of its revenues from non-US operations.

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Bashir plans austerity for Sudan

12 July 2011 Last updated at 15:09 GMT There has been a sharp increase in the cost of living in Khartoum Sudan's President Omar al-Bashir has announced that he will introduce economic austerity measures following South Sudan's secession.

Most of Sudan's oil lay in the south and the two countries have not agreed how to divide future oil revenues.

The president told MPs that a three-year "emergency programme" would include issuing a new currency.

He also promised a more open society where people would be free to express political views without fear of arrest.

Continue reading the main story

Our relations with the newly born state of South Sudan will be based on respect of covenants and serious commitment to consolidate stability”

End Quote Omar al-Bashir Sudan's president "Our government is keen not to curb freedom of speech. No-one from today will be arrested for expressing his political views," the president said in his speech to parliament in the capital, Khartoum.

Consultations on a new constitution - a key opposition demand - would also begin soon, he said.

It would be an inclusive process involving opposition politicians, religious leaders and university professors and the new constitution would be put to a referendum.

Last December, President Bashir said a new constitution would make Islam the only religion in Sudan and Sharia the only law.

The BBC's James Copnall in Khartoum says that Mr Bashir's opponents will be sceptical about the promises of greater political freedom.

But our correspondent says that perhaps President Bashir has decided that only greater openness and inclusiveness - or at least the impression of it - will keep his country united through what could be a very tough period.

According to Reuters news agency, Sudan has been hit by a scarcity of foreign currency and high inflation.

"We have placed an emergency programme for the next three years," Mr Bashir said in his nationally televised speech.

A new budget with no new taxes is to be put before parliament.

"The package of the economic measures includes issuing a new currency in the coming days," he said.

'Sensitivity'

South Sudan announced it was launching its own currency and the South Sudan pound note would be in circulation by next Monday.

The new country's Central Bank Governor Elijah Malok told Reuters it would take three months to completely replace the northern currency.

Ex-southern fighters in South Kordofan and Blue Nile are to join the north's army or disarmed

The south's independence follows decades of conflict with the north in which some 1.5 million people died.

The two countries have still to decide on issues such as drawing up the new border and how to divide Sudan's debts and oil wealth.

At present, the revenues are still shared equally.

Although most oil lies in the south, most of the oil pipelines flow north to Port Sudan on the Red Sea.

Continue reading the main story

I hereby assure the sons of Southern Kordofan and Blue Nile regions that we are committed to expand a just political participation for them and enable them to manage their affairs”

End Quote Omar al-Bashir Sudan's president Mr Bashir said his government would work with the south "towards resolving all remaining and pending issues despite their sensitivity".

"I reaffirm in front of you what I declared in Juba, that our relations with the newly born state of South Sudan will be based on respect of covenants and serious commitment to consolidate stability and establish a unique and positive neighbourly relationship," he told MPs.

On Monday, the president told the BBC the disputed border region of Abyei was a source of potential conflict with South Sudan.

Fighting in Abyei and another border region, South Kordofan, forced some 170,000 people to flee their homes in the run-up to southern independence.

It has been agreed that 4,200 Ethiopian troops will be deployed to keep the peace in Abyei after a previous deal to make it a demilitarised zone.

Abyei is claimed by both sides, while the fighting in South Kordofan pits northern forces against mostly ethnic Nubans who fought for the southern rebels during the civil war but now find themselves in the north.

Mr Bashir told parliament that the government intended to restore order in South Kordofan and Blue Nile - northern states where UN peacekeepers have been told to leave, but promised more dialogue.

"I hereby assure the sons of Southern Kordofan and Blue Nile regions that we are committed to expand a just political participation for them and enable them to manage their affairs."

An African Union-mediated deal signed before the south's secession agreed that the former southern fighters in South Kordofan and Blue Nile would either be integrated into the northern army or disarmed.

Show regions

The great divide across Sudan is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. South Sudan is covered by green swathes of grassland, swamps and tropical forest.

Sudan's arid north is mainly home to Arabic-speaking Muslims. But in South Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own languages and traditional beliefs, alongside Christianity and Islam.

The health inequalities in Sudan are illustrated by infant mortality rates. In South Sudan, one in 10 children die before their first birthday. Whereas in the more developed northern states, such as Gezira and White Nile, half of those children would be expected to survive.

The gulf in water resources between north and south is stark. In Khartoum, River Nile, and Gezira states, two-thirds of people have access to piped drinking water and pit latrines. In the south, boreholes and unprotected wells are the main drinking sources. More than 80% of southerners have no toilet facilities whatsoever.

Throughout Sudan, access to primary school education is strongly linked to household earnings. In the poorest parts of the south, less than 1% of children finish primary school. Whereas in the wealthier north, up to 50% of children complete primary level education.

Conflict and poverty are the main causes of food insecurity in Sudan. The residents of war-affected Darfur and South Sudan are still greatly dependent on food aid. Far more than in northern states, which tend to be wealthier, more urbanised and less reliant on agriculture.

Sudan exports billions of dollars of oil per year. Southern states produce more than 80% of it, but receive only 50% of the revenue. The pipelines run north but the two sides have still not agreed how to share the oil wealth in the future.

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VIDEO: International Airlines: 'Back in the black'

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VIDEO: Business concerns over US debt delay

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VIDEO: Swiss tourism hit by strong franc

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Inside China's secretive tech giant

25 July 2011 Last updated at 23:18 GMT By Nick Mackie Shenzhen, China WATCH: Nick Mackie gets a rare look inside Huawei Technologies in Shenzhen, China

It's one of the world's leading - and somewhat inscrutable - technology companies.

Its telecom systems connect a third of the world's mobile phones. And globally, it employs 110,000 staff - more than Cisco or Microsoft.

The company is Huawei - born and bred in Shenzhen, southern China. And it epitomises today's power of Asia.

"It's a very young company, it's less than 20 years old," explains Ross Gan, global head of Huawei Technologies' corporate communications.

"Our workforce is also very young - the average age is 29 - so there's a very dynamic environment within the company."

This is certainly the impression one gets at the sprawling headquarters campus in Shenzhen's Longgang district, where 40,000 employees work.

Here, the company houses key research-and-development units, global testing facilities, and an executive training centre. But the enthusiasm on show isn't all down to the youth factor.

Huawei's workforce is young, with an average age of just 29 years old

Huawei is owned totally by its employees - with around 60% of its staff holding non-tradable shares that are allocated according to position and performance.

Rural roots

In its early days, Huawei had to fight its corner for a share of China's mobile telecoms market.

Back then, the main orders for the lucrative urban network systems went to either state-owned companies or foreign firms. So Huawei, instead, focused on the challenging countryside.

"Huawei actually cut its teeth in the rural markets where the conditions were such that we had to design very specialised and customised equipment in order to meet our customers' needs," says Ross Gan.

This included developing infrastructure that could withstand variable power supplies, lightning and attacks by rats.

As the company grew and expanded into foreign markets, it made a name for itself as a problem solver - listening to its potential customers' needs or problems and designing solutions.

Huawei's Ross Gan says the company cut its teeth on rural markets

Huawei is now the world's second-largest supplier of mobile telecom equipment, after Ericsson, serving 45 of the top 50 telecoms operators. It also boasts 55% of the global market share in 3G dongles.

Engineering cream

Revenues in 2010 topped $28bn, and the company predicts an aggressive expansion over the next 10 years to $100bn.

The main driver is its workers - of which 46% are engaged in research and development (R&D). The company has applied for more than 49,000 patents.

Huawei attracts the cream of China's engineers - postgraduates like Zhong Jianwei, project manager at the company's technical compliance unit.

He discovered that working here is very different from most large Chinese companies with their typical rigid, statist, chains of command.

"Every day, I need to communicate with Huawei staff all over the world. It's international here - global," remarks Zhong Jianwei.

"I've never experienced this before."

To achieve its growth targets, Huawei wants new experiences.

It's not going to drop its core business - providing the systems for mobile operators in 140 countries - but it is developing two new strategic pillars.

Zhong Jianwei is a project manager in Huawei's technical compliance unit

"A lot of it is driven by the larger forces of convergence," says Ross Gan.

"There are other customer segments out there - such as the enterprise market and increasingly the device markets."

Enterprise is about developing technology that helps make companies, even cities, more efficient and even more secure.

At the Shenzhen headquarters, it's clear that huge efforts are going into video conferencing - from standard desktop or mobile use to the kind of systems used by large corporations and governments. The goal is to create near face-to face communication.

The design team is now working on reducing today's distracting seams between the multi-screens.

"Within the next one-to-two years, we will, step-by-step, go from a narrow gap to no gap, to even 3D, " enthuses Luo Shan, software development engineer.

"Now we're working on the technology. We want to deliver a trusted high-level experience."

Enterprise has moved the company into the IT sector. It plans to be a big player in providing solutions for tech convergence.

Huawei has also set its sights on the cloud - from creating the basic hardware to developing the software and applications.

The company is moving aggressively into consumer electronics

It's also marketing the cloud in a box - kitting out standard shipping containers as fully functional data centres which can then be dropped off ready for use.

Gadgets and gizmos

For large operations, customers need only prepare a shell of a building that can house multiple containers.

Huawei is making an aggressive push into the consumer market - video on demand, phones, 4G network cards - albeit delivering in much smaller boxes.

This year, it expects to ship 60m cellphones - from entry level to smart.

Much of the manufacturing is outsourced - including to Foxconn which has its huge Shenzhen manufacturing complex close by.

Huawei mainly supplies, wholesale, to the likes of mobile operators - though this strategy is changing.

After two decades of being in the crucial, but "boring", end of the mobile revolution - and largely unknown among the world's public at large - it's now seriously into brand building.

The company is rolling out tablets and smart phones and establishing new marketing channels.

Taking a leaf out of Apple's book, the company plans to develop a network of retail stores, in China and overseas.

Security concerns The company has an image problem, however, among US lawmakers - who accuse it of maintaining links with China's military.

Citing national security concerns, they've vetoed two Huawei purchases of US technology firms.

Huawei has long rejected such concerns - stressing it is an employee-owned company that welcomes a serious discussion with its detractors in order to put the accusations to rest.

"There is no link between Huawei and the military," stresses Ross Gan.

"The reality about Huawei is that it is a private company, wholly owned by its employees, who are its shareholders - and the company operates on a commercial basis and nothing more."

That said, the company hasn't made life easy for itself. It lifted a cloak of secrecy over its board membership only in April 2011.

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Vodafone to get Verizon dividend

29 July 2011 Last updated at 00:28 GMT This is the first dividend Vodafone shareholders will have received from Verizon. Vodafone shareholders will finally receive a return on the company's investment in Verizon Wireless after the US telecoms firm approved the payment of a $10bn (£6.1bn) dividend.

Vodafone owns a 45% stake in Verizon, and so will receive $4.5bn, due to be paid on 12 January next year.

Shareholders will then get a special dividend of £2bn, equivalent to 4 pence a share, in February, the company said.

The balance of the dividend will be used to reduce debt levels.

This is the first dividend Vodafone shareholders will have received from Verizon.

"Our long term partnership in Verizon's strong and successful wireless business has seen the value of our investment increase significantly over recent years," said Vittorio Colao, Vodafone's chief executive.

"The dividend from Verizon Wireless allows us not only to reward our own shareholders with an immediate and sizeable cash return, but also to continue to reinvest in our business.

Last week, Vodafone reported a small rise in quarterly service revenues, as weak trading in southern Europe was offset by strong growth in India and Turkey.

The company also confirmed its outlook for the full year, which had previously been stated as an adjusted operating profit of between £11bn and £11.8bn.

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FA urgently needs reform say MPs

Whittingdale MP wants FA overhaul

The Football Association has been urged by MPs to make big changes in the way the game is run in England.

A report by MPs stresses the need to address the financial instability and the levels of debt in football.

John Whittingdale MP said: "Significant changes need to be made to the way the game is run to secure the future of England's football heritage."

Portsmouth became the first Premier League club to go into administration in February 2010.

"No one doubts the success of the Premier League in revitalising English football," Whittingdale said.

"But it has been accompanied by serious financial problems throughout the football league pyramid."

The Commons Culture, Media and Sport Committee [chaired by Whittingdale] has recommended that more rigorous measures should be introduced to promote a sustainable business and should underpin self-regulation measures introduced by the Premier League and the Football League.

Continue reading the main story

The FA is the organisation for the job, but it has some way to go getting its own house in order before it can tackle the problems in the English game

John Whittingdale MP

The report also suggests that a strong fit and proper persons test is consistently applied, and that the selling of a club's ground should not take place unless it is in the club's interest.

The Committee report also said that "there is no more blatant an example of lack of transparency than the recent ownership history of Leeds United" and has urged the FA to investigate if necessary with the assistance of Her Majesty's Revenue and Customs.

Other recommendations include an end to the Football Creditor's Rule, an FA review of expenditure at grass roots level, and a restructuring of the FA board.

"The FA is the organisation for the job, but it has some way to go getting its own house in order before it can tackle the problems in the English game, and address the future," Whittingdale added.

"We need a reformed FA to oversee and underpin a rigorous and consistent club licensing system and robust rules on club ownership, which should be transparent to supporters."

Continue reading the main story Matt Slater,
BBC sports news reporter

"The Culture, Media and Sport Committee's report on Football Governance is 112 pages of good sense and honorable intentions. Those eight evidence-gathering sessions, hundreds of written submissions and trips to see what German football looks like were not wasted. Sadly, we have been here before: many, many times. Government interventions into English football have been as regular and pointless as England's failures in summer tournaments. MPs get bored, ministers move on, governments change, football stays the same. Will this time be any different?"

The Commons Culture, Media and Sport Committee's findings now pass to Sports Minister Hugh Robertson, who will co-ordinate the Government's response and relay to football's governing bodies which recommendations it would like to see adopted.

"We will look carefully at the report in detail before setting out the Government's plans in our response," Robertson said.

"But it's clear that no change in the areas of governance, financial regulation, transparency and the involvement of supporters is not an option.

"There is a moment here for the football authorities to respond positively and decisively to both the content and spirit of the report and we will be working with them to achieve this," he added.

Shadow Sports Minister Ian Austin was equally supportive of the measures and recommendations made in Friday's report.

"The game needs strong leadership on governance issues, transparency for every professional club and proper involvement for supporters and fans because giving fans a bigger stake in their clubs and a greater say in the decisions which are made by football's governing bodies should be an integral part of modern football," Austin said.

"In the period ahead it is important that the FA build on reforms to be considered by their shareholders next month and the Premier League embraces the need for change by making a clear commitment to improved governance arrangements."

Some of the recommendations made may not meet with the Premier League's approval, but the corporation have said they will await the Government's response before reacting to the Commons Culture, Media and Sport Committee's findings.

David Bernstein took on the role of FA Chairman in December 2010

"The CMS Select Committee has undertaken a lengthy and considered inquiry into the governance structures of English football, one we were happy to contribute to with both written and oral evidence," the Premier League said in a statement.

"We, along with the other football authorities, will now consider the report's contents and await the Sports Minister's response before taking a view on the recommendations and any part the Premier League may have to play in implementing them."

Supporters Direct, which gives advice and funding to fans wanting to enhance representation and set up trusts at clubs, has welcomed the report into football governance in England.

Brian Burgess of Supporters Direct said: "The Select Committee's inquiry has provided a welcome opportunity to consider the challenges facing football in this country and hear the views of the fans.

"With 52 clubs who are or have been in the top 92 having suffered from insolvency events since 1992 it is clear that things cannot carry on as they are.

"We look forward to working with the Government, the FA, the Premier League and the Football League to develop practical solutions to respond to the report's recommendations," Burgess added.

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Nintendo shares slump after loss

29 July 2011 Last updated at 07:17 GMT Nintendo's latest gadget the 3DS has not made a big impact on the market Shares in Nintendo have tumbled on the Tokyo stock exchange a day after the company announced a loss in the first quarter.

The shares closed down 13%, having fallen as much as 20%, on news of the worse-than-expected profits figures.

On Thursday, Nintendo reported a net loss of 25.5bn yen ($324m, £201m) for the April-to-June quarter, its first-ever quarterly loss.

The company also cut its full-year profit forecast.

Nintendo said it now expects a net profit of 20bn yen for the year to March 2012, down 82% from its previous projection.

'Underweight' Nintendo earnings were hit by weak sales of its new gadget, the handlheld 3DS console.

In an attempt to boost sales the company has announced huge price cuts.

The price in Japan will be about 40% less - retailing at 15,000 yen. In the US, the price will drop next month to $169.99 from $249.99.

However, analysts said the price cut may hurt the company's earnings even further.

"The timing of the 3DS hardware price cut is surprising, given the major in-house software releases," said Hiroshi Kamide of JP Morgan.

"We believe the 3DS will be a heavy weight on earnings over the medium term," he added.

JP Morgan also cut its rating on Nintendo from "overweight" to "underweight," saying the current situation was worse than feared and the outlook uncertain.

Tired customers?

To make matters worse for the gaming giant, industry watchers say sales of the 3DS are unlikely to turn around anytime soon.

"Software is a big problem. Right now there are not many games available for the 3DS," said David Abrams, of CAGCast Video Game.

Mr Abrams added that while the 3DS has had a lukewarm response, smartphones continue to capture an increasing share of the gaming market.

He said easy availability of games and their low cost meant more and more people were preferring smartphones over specialised gadgets.

"The question is, are people willing to spend a premium to play the next Mario game or would they spend that amount to buy close to 40 games on their smartphones," he said

Mr Abrams added that despite the launch of its latest version, the DS gadget has been losing its charm.

"The reality is that people may be tired of the whole DS concept. It has been around for almost seven years," he said.

"May be its not that exciting to people anymore," he added.

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Moving IT beyond the firewall

20 July 2011 Last updated at 21:12 GMT Beyond the firewall: Aruba Networks chief technology officer Keerti Melkote says companies are struggling to secure corporate data on employees' personal devices Each week we ask high-profile technology decision-makers three questions.

Aruba Networks CTO Keerti Melkote founded the company with partner Pankaj Manglik in 2002

This week it is Keerti Melkote, founder and chief technology officer (CTO) of Aruba Networks.

Aruba Networks is a provider of network access technologies, including wireless LAN (local area network) and edge access networking equipment, as well as virtual networking technology.

The company is based in Sunnyvale, California, and has more than 500 employees. Aruba Networks had revenues of $267m (£165m) in 2010.

What's your biggest technology problem right now?

We're a technology company so the problems our customers face are our problems.

For our customers it's directly tied to the influx of mobile devices into the enterprise, especially since Apple introduced the iPad.

Most corporations are having a very tough time trying to figure out how to deal with this. They're struggling with the security considerations of these devices - how do they retain control of confidential corporate data?

I have a firewall on the internet that protects my corporation from hackers, everything that is inside the firewall is protected.

But this personal device comes along and blurs the line, and says the firewall is irrelevant. I am bringing in my personal device and making it part of the corporate network, it becomes a pretty difficult problem to control the security of the corporate information.

I would say that is the number one challenge that most corporations are facing today.

What's the next big tech thing in your industry?

It's directly related to the introduction of the iPad.

What we've seen is a complete shift in how corporations are going to eventually think about employee computing and communications.

Today this essentially translates to providing a PC at somebody's desk and a phone. And maybe a mobile and maybe a laptop.

When you think about these new devices, it's not just the iPad, it's the iPhones, and Android phones, and all the other smartphones that are coming into the market.

So you extend this model and say, why don't we enable the 'bring your own device' model to include them.

Your own personal computer, personal tablet PC or iPad and smartphone can be used for corporate computing and communications.

At the same time the next generation office environment is going to change dramatically. Instead of cubical farms, you'll be sitting at this desk with this mobile experience, so you can basically take your work with you wherever you go.

The way that offices are going to be built is going to be more collaborative and open, rather than the traditional desk-bound workplaces that we are used to seeing.

What's the biggest technology mistake you've ever made - either at work or in your own life?

When we moved our corporate headquarters from the previous location to the current location, because we're a fundamentally wireless company we believed from a technology perspective that we didn't need to wire the building, for telephone and internet etc.

This was about three or four years ago. Our internal IT department said it was too risky, and they still wanted to spend the money on cabling the building which we did.

A few years later we find ourselves essentially not using any of that investment, or very little of it.

I think that was a very significant mistake as far as corporate IT decisions go.

The second one is more to do with personal networking use.

Like most of us I have a TV, both cable and internet TV, I have three types of phone, I have a landline at home, a mobile phone for my family, and I have Voip (voice over internet protocol - internet telephone) from Vonage. Of course I use the internet not only for personal entertaining but for work as well.

I was going through the bills I was paying to maintain this totally connected lifestyle I think most of us have today. I was pretty staggered at the amount of money I was spending.

I decided to simplify my life. What I found was that the most important things for me were my internet connection and my mobile connection.

I decided to go with a bundled plan to save money with one provider, only to find that these guys were not net neutral, and were monitoring content. That's something I absolutely despise.

So I'm back on the market shopping for a provider for my internet and mobile. I want to buy an internet connection from someone who can at least give me the semblance of net neutrality.

Bundled plans - they're not all that they're cracked up to be.

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VIDEO: Life in Sparta amid economic gloom

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Spending cuts hurt BAE Systems

28 July 2011 Last updated at 19:20 GMT The new RAF Nimrod is one of the BAE projects scrapped as a result of spending cuts Military spending cuts have led to a drop in profits at UK defence company BAE Systems.

Profits before tax for the first six months of the year were £691m, down from £781m a year ago, with global sales down 13% to £9.2bn.

Despite this, BAE announced a dividend rise of 7% and a share buy-back scheme.

BAE benefited from a one off payment of £125m from the UK Ministry of Defence in compensation for contract changes over the past nine years.

The company reached a separate settlement agreement with regards to the cancellation of the Nimrod surveillance jet and Harrier jet programmes, but did not disclose the numbers.

BAE also took a one off loss of £160m linked to a contract to provide an Omani patrol vessel.

Continue reading the main story The scheme to purchase £500m of its own shares was well received by investors, with BAE shares closing up by 4.9%.

Chief executive Ian King said the company would focus on new areas of business such as cyber weapons.

"We continue top pursue the fast lanes of growth in the areas of military and technical services, cyber and intelligence and high-end electronics," he said.

Analysts said the results were not as bad as they could have been given the spending cuts.

"These results are by no means a disaster, and the increased shareholder returns should be taken as a positive," said Andrew Gollan from Investec Securities.

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Drama or crisis?

28 July 2011 Last updated at 10:44 GMT By Damian Kahya Business reporter, BBC News Some Republicans are firmly against raising the debt ceiling As worries over debts move from Europe to the US, the markets have reacted with only mild panic.

Economic problems in the US could be far more serious for the world economy than anything that could happen in Greece.

But some economists have suggested that an essentially political drama is being mistaken for an economic crisis.

The US government needs the permission of Congress to raise the ceiling on the amount of money it can borrow.

If Congress doesn't grant it - currently the deadline is 2 August - the government will hit the limit and may have difficulties in paying its bills.

But there is a wider economic problem behind the stalemate.

The US - like Greece - is spending far more than it earns through taxes.

The annual budget deficit has reached $1.5tn (£920bn) this year - just over 10% of GDP - and the country has amassed a national debt of around $14.3tn.

Continue reading the main story

The interests of voters and the interests of the markets are completely at odds”

End Quote Dr Pippa Malmgren Principalis Asset Management President Barack Obama and the Republican controlled House of Representatives both agree the US needs to borrow less in the future - they just disagree on how.

It's that argument which is delaying progress on lifting the current borrowing limit.

As a result, ratings agencies have suggested that they may downgrade US debt from its benchmark top-rated AAA status - unless the two sides agree on radical action to lift the limit and cut the deficit.

Default

The immediate worry for investors is that, if no deal is agreed by the 2 August, the US may find itself at risk of a so called technical default.

"The interests of voters and the interests of the markets are completely at odds," says Dr Pippa Malmgren from Principalis Asset Management.

Some members of Congress were elected promising not to allow the government to run a deficit.

"The market keeps being surprised when it shouldn't be. You will win votes if you shut the government down," she says.

President Clinton shut down some government services in 1995 after parties failed to agree a budget

But a failure to reach a deal by the deadline may not provoke panic.

"The 2 August deadline is not an absolute deadline, because tax revenues are pretty good so far," says James Knightley from ING.

Potential impact

If it does run out of money the government may stop paying wages and social security checks - a so-called 'shut down'.

Government last shut down under Bill Clinton in 1995 when non-essential government services stopped after similar failed negotiations over the budget.

That would hurt the fragile economic recovery - but many economists find it hard to believe the US would ever default and fail to pay its debts.

"I think the risk of that is almost zero," says Josh Feinman, global chief economist for DB Advisors.

"They'll keep paying the bond holders but they'll stop paying someone else." he added.

Not everyone agrees with Mr Feinman though.

The US needs to re-finance $1.7tn, or 12% of its total debt this year - that would be hard to do if it can't borrow fresh funds.

Fidelity, one of the largest private sector holders of US bonds, say they have been preparing for a possible default.

"We have re-positioned our portfolios to respond to [the threat of default] and that means we have raised our liquidity [cash] and adjusted our portfolio maturities past the early part of August," says Robert Brown, head of Fidelity's money-market business.

That means funds - which lend money to banks and businesses - are already holding more cash to prepare for a possible default.

This limits the amount they can invest - potentially driving up the cost of lending to businesses.

The cost will stay high until investors believe the crisis is solved on a long term basis.

With so much at stake some warn that, unless it is resolved soon, the political stand-off may undermine wider business confidence.

"We've got a melodrama here and we're going to have a panic for no good reason," warns Professor Peter Morici from the University of Maryland.

"If they do something at the eleventh hour they might not avoid panic. Companies are starting to hoard cash and delay hiring, that is the beginning of a crisis."

The economy could slow as companies panic over the uncertainties created by seemingly endless negotiations in Washington.

Downgrade

Even if the borrowing limit is raised, the US may have its top AAA credit rating downgraded.

Ratings agency Standard and Poor's has cut its outlook on the US's credit rating to negative.

Economists say agencies want a comprehensive deal to limit the US deficit over the long term.

"Agencies have said if we don't get the debt ceiling raised soon, coupled with an agreement in both houses of Congress to stop the debt ballooning, then we are going to downgrade the US," says Phillip Shaw from Investec.

Lowering the credit rating may make it harder for the government and companies to borrow money in the long term.

"You might see some impact outside of treasuries," warns Mr Feinman.

Markets have so far failed to panic over debt talks

US debt would be less safe, so investors holding it would have less freedom to lend to other, riskier, companies.

"If you downgrade the US then they might have to sell some lower-rated stuff in order to keep the average credit quality."

But he doesn't think a downgrade makes any sense.

The US, he says, is not like Greece - it controls its own currency and can print as much as it likes to pay back debts.

"A credit rating is based on the chances [lenders] are going to get paid back. When you control your own monetary policy what does a rating even mean?" argues Mr Feinman.

Figures collated by ING show that 45% of US debt is held by the US government - which is unlikely to be unduly perturbed by a downgrade.

Even money-market funds such as Fidelity would not have to sell their debt, as US law makes government debt exempt from rules about diversification of risk.

Over the long term though the US may find it very hard to recover it's credit rating - should it need to.

"In my 16 years at Fidelity and at other firms, I've never seen an upgrade to AAA. We are the bellwether for safety and there are a lot of advantages that go with that," says Mr Brown.

Distraction

Some argue the episode is a distraction.

"The slowdown we are seeing in emerging and developed markets, together with the ongoing European crisis, is foremost in my thinking," says Rick Patel, portfolio manager at Fidelity International in the UK.

He sees the current uncertainty as investment opportunity.

"I've been investing in US treasuries largely because of the weakening growth outlook [in the US] which leads me to think treasuries are the way to go."

For others, the focus will soon return to Europe, where governments can't simply print money to get out of debt.

"Once the US story is complete and that is past we are going to revert to the eurozone story again," says Mr Knightley.

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VW unveils an ultra-efficient car

25 January 2011 Last updated at 18:23 GMT By Jorn Madslien Business reporter, BBC News Improved aerodynamics and weight reductions enable the car to use a smaller engine Volkswagen has made a car it says can travel 313 miles on a gallon of diesel, and that emits just 24 grammes of carbon dioxide per kilometre travelled.

The XL1, which seats two adults, combines a 0.8 litre two cylinder diesel engine with an electric motor.

The car is constructed around a carbon fibre reinforced polymer monocoque to reduce the weight to just 795 kilos.

German rival BMW is also making an electric carbon fibre car, while Mercedes is to make carbon fibre parts.

Their efforts show how the motor industry is increasingly working to improve aerodynamics and reduce weight, in order to supplement improvements in cars' engines.

On the engine front, electrification is becoming mainstream even though pure electric cars are expected to remain niche products for decades yet.

Instead, carmakers are increasingly combining conventional solutions, such as petrol or diesel engines, with battery-powered solutions.

"All sorts of mixes will come to the fore," said Jim O'Donnell, BMW North America's chief executive, in an interview with BBC News.

The Volkswagen XL1 is to be formally unveiled at the Qatar motor show on Tuesday night.

The carmaker says it can accelerate from nought to 100 kilometres per hour (60 miles per hour) in 11.9 seconds.

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Apple overtakes Nokia and Samsung

29 July 2011 Last updated at 11:55 GMT Handsets from Apple (left) and Samsung (right) saw the biggest growth Apple has become the world's biggest seller of smartphones, according to industry analysts.

The US firm overtook both previous leader Nokia and Samsung in the second quarter of the year, when total smartphone sales hit a record 110m.

The figures from Strategy Analytics also showed that 361m handsets were shipped, up 13% on the previous year.

Nokia remained the biggest seller of all types of handsets, but the numbers shipped and its market share fell.

It shipped 20% fewer handsets in the second quarter - 88.5 million.

The Finnish firm's market share dipped to 25% - its lowest level since 1999.

'Star'

The report describes Apple as the "star performer" during the quarter, more than doubling its handset shipments to a record 20.3 million units.

All handsets Smartphones Total market share

However, its share of the overall market was 6%, making it the world's fourth biggest mobile phone seller behind Nokia, Samsung and LG.

Samsung shipped 74 million units, rising 16% from 63.8 million in the quarter a year earlier.

The company's market share rose to just above 20%, and Samsung is now "breathing down Nokia's neck", the report said.

Strategy Analytics said Nokia was plagued by problems.

"An unexciting touchphone portfolio, inventory corrections in Asia and Western Europe, wavering demand for the Symbian platform and limited presence in the huge US market continue to weigh on Nokia's near-term performance," the report said.

Third-placed LG shipped 24.8 million handsets during the three months, with volumes down 19% from a year earlier.

China-based ZTE shipped 18 million handsets, giving it a global market share of 5%.

Seperately, Taiwan's HTC said it had shipped 12m handsets in the second quarter of the year, helping its profits double to 17.5 billion Taiwan dollars ($607m; £372m).

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Japan data shows further recovery

29 July 2011 Last updated at 02:15 GMT Japanese manufacturers have been working at reduced capacity after the earthquake and tsunami Japan's economy has continued to recover from the aftermath of the earthquake and tsunami, latest government data showed.

Factory output rose 3.9% in June from the previous month as supply chain concerns eased, while household spending increased by 0.8%.

Analysts said it showed the economy was recovering faster than expected.

The data comes a day after Japan reported a rise in retail sales for the first time since the 11 March quake.

"I thought we had to wait until the middle of next year for production to come back up to levels seen before the earthquake," said Seiji Adachi, of Deutsche Securities.

"But it now looks like manufacturing activities might go back to where they were as early as January-March next year," he added.

Strong forecast Continue reading the main story

The yen's strength, if sustained for a long time, could dampen production in the longer term by hurting corporate earnings and thus their capital expenditure”

End Quote Tatsushi Shikano Mitsubishi UFJ Morgan Stanley Securities Japanese manufacturers were hit hard by the devastation caused by the earthquake and tsunami.

Disruption to the country's supply chain saw some of the biggest manufacturers curb or suspend production.

However, as the infrastructure is restored, manufacturers are becoming increasingly optimistic.

According to a survey done by the Ministry of Economy, Trade and Industry, manufacturers expect output to rise 2.2% in July and 2% in August.

"Manufacturers' strong forecasts for July and August suggest the recovery in output remains on track," said Tatsushi Shikano, of Mitsubishi UFJ Morgan Stanley Securities.

Overcoming challenges

The recovery in the supply chain and factory output has come despite the manufacturers facing various challenges, not least a shortage of electricity.

Japan has been facing a power shortage after the twin natural disasters damaged the Fukushima Daiichi nuclear plant and forced the closure of various other nuclear plants in the country.

There were concerns that the electricity shortage would hit production, especially during summer months, when demand for power is at its peak.

However, analysts said manufacturers were able to overcome this shortage by implementing changes to their working hours.

"Power problems are having less of an impact than previously thought, thanks to companies' efforts to avoid operating during peak power demand hours," said Mr Shikano.

Currency woes

While the manufacturers have been able to overcome these challenges to get their production back on track, other factors continue to remain a threat.

The biggest amongst them has been a strengthening Japanese currency.

The yen, a traditional haven, has been rising against the US dollar in wake of the ongoing debt issues in the US and Europe.

A strong currency does not bode well for Japanese manufacturers as it not only make their goods more expensive to foreign buyers, but also hurts the companies' profits when they repatriate their foreign earnings.

"The yen's strength, if sustained for a long time, could dampen production in the longer term by hurting corporate earnings and thus their capital expenditure," said Mr Shikano

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EU to investigate Royal Mail plan

29 July 2011 Last updated at 10:53 GMT The UK government said it was confident that its plan was in line with EU guidelines The European Commission has begun an investigation into whether the UK government's plan to overhaul the Royal Mail contravenes EU rules on state aid.

The government plans to take on Royal Mail's £8bn pension deficit and restructure its £1.7bn debts.

The Commission said it doubted that the plan did enough to deal with how much it would distort competition.

The UK government said that its plan was in line with EU guidelines for rescuing firms in difficulty.

It wants to privatise some or all of the Royal Mail, but needs to sort out its finances first if a buyer is to be found.

"The Commission acknowledges the importance of the reform of the postal market in the UK," said Competition Commissioner Joaquin Almunia.

"However, we must ensure that the state measures do not provide undue advantages to Royal Mail as this would distort the conditions of competition among postal operators in the internal market."

Postal Affairs Minister Edward Davey said the investigation had been expected and was the next step in the government's attempts to reform the Royal Mail.

"It is only right that the Commission has opened the State Aid process to properly investigate the case," he said.

"However, we are keen to resolve the case as soon as possible, and are seeking a resolution by March 2012."

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Rail crash

28 July 2011 Last updated at 11:41 GMT By Saira Syed Business reporter, BBC News Protesters carry a banner that reads 'return dignity to the victims who died on July 23' As China mourns lives lost in last week's high-speed rail crash near Wenzhou, there is also a tone of anger in the air.

"The people don't need this world number one or that world title. All we want is safety!," commented one reader of a news story posted on the popular Sina portal.

But the crash's other casualty is likely to be China's ambitions for its railway technology, which it has been developing rapidly and had high hopes of making an export success.

Before the crash, all talk had been of the government's drive to break records. The high-speed rail network was to be the largest in the world, as well as being completed in record time.

Those accolades are no longer being thrown around, as some blame that urgency and ambition for the death of at least 39 people.

The first of China's bullet-train lines opened in 2007 with plans to lay 16,000km (10,000 miles) of high-speed track by 2015, making it the biggest high-speed rail network in the world.

Technology issues But the project has had its share of problems, even before the fatal crash.

First because of allegations of mass corruption that went all the way to top of the railway ministry, then later for delays caused by power shortages.

But some say that this latest incident could have been prevented, had authorities heeded the alarms raised.

"The Japanese say they have warned the Chinese for years about scaling up on this rapid pace," says Allistair Thornton from IHS Global Insight.

A bullet train passes the wreckage of two other high-speed trains which collided two days earlier

This is regarded as significant as some of the technology which Chinese companies say they 'reinnovated' was bought from Japan's Kawasaki, as well as from Canada's Bombadier and Germany's Siemens.

The other allegation is that the construction period was shortened unnecessarily.

"There is criticism on this kind of acceleration of the construction, experts warned there could be some problems in later operations," says Ingrid Wei, infrastructure analyst for Credit Suisse in Shanghai.

Global plans

However, Chinese companies were thinking even further ahead, past completion date.

Chinese train companies CSR Corp, CNR Corp and China Railway Group were hoping to sell the new technology to foreign countries, directly competing with the likes of Siemens and Bombadier.

But the crash has shaken public faith in China's rail system both inside and outside of the country.

In June the Beijing to Shanghai high-speed train route was opened to the public

Experts say that means potential clients such as Malaysia, Venezuela and Saudi Arabia who were looking into replicating China's rail expansion plans will be putting those ambitions on hold.

And potentially highly lucrative markets for China such as the US, will no longer be options.

"It's pretty hard to imagine any politician in the US signing on the dotted line for Chinese high-speed rail now. And so that's a huge market the Chinese were hoping to tap into and that's evaporated," says Mr Thornton.

Profit or loss

That poses an even bigger financial problem for the state-owned rail companies.

The Chinese government has invested huge amounts of money into developing the high-speed rail network.

"It's not clear whether they will now be able to turn this into a profitable enterprise," says Mr Thornton.

Not least because ticket prices are too high for many Chinese consumers to afford. And after the crash, many others will be deterred from taking the high-speed trains.

However, Ms Wei says the high-speed rail network project is a state asset and will be strongly supported by the central government.

Before then, the government will have to answer some tough questions: why the systems failed and why safety was not the top priority.

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