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Posted: 01 Sep 2016 06:10 AM PDT
(SEOUL) – The recovery in Samsung Electronics Co Ltd’s mobile business suffered a blow on Thursday as reports of exploding batteries forced the firm to delay shipments of Galaxy Note 7 smartphones, and knocked $7 billion off its market value. Investors drove the stock to two-week lows after the global smartphone leader told Reuters late on Wednesday the shipments had been delayed for quality control testing, and that shipments to South Korea’s top three mobile carriers had been halted. Faults with the new premium flagship device could deal a major blow to the South Korean giant, which was counting on the Galaxy Note 7 to maintain its strong mobile earnings momentum against Apple Inc’s new iPhones expected to be unveiled next week. “This is some major buzz-kill for Samsung, especially given all of the hard-earned excitement that products like the Note 7 have been garnering lately,” IDC analyst Bryan Ma said. “The pending Apple launch puts all the more pressure for them to contain this quickly. The timing of this couldn’t have been worse.” Samsung did not comment on what problem it was trying to address or whether other markets were affected besides South Korea. Sister company Samsung SDI Co Ltd said that while it was a supplier of Galaxy Note 7 batteries, it had received no information to suggest the batteries were faulty. Several people posted images and videos of charred Galaxy Note 7s online and said their phones had caught on fire. “Be careful out there, everyone rocking the new Note 7, might catch fire y’all,” one user said in a YouTube clip showing a burnt Note phone. It was not immediately possible to confirm the veracity of the clip. Samsung‘s shares, which hit a record high of 1.694 million won last week, fell 2 percent, andSamsung SDI tumbled 6.1 percent, versus a 0.1 percent fall for the broader market . Several South Korean media reports, without citing direct sources, said Samsung will soon announce a plan to recall affected Note 7 phones and replace their batteries as opposed to giving the users a new device. A Samsung spokesman declined to comment on the reports. Damage Control Last year, production problems for the curved displays for the Galaxy S6 edge model resulted in disappointing sales, and Samsung risks a repeat this year if it cannot address the Galaxy Note 7 problems quickly. Its mobile profit is on track to post annual growth for the first time in three years, thanks to robust sales of the Galaxy S7 and S7 edge devices that it launched in March to critical acclaim. The Galaxy Note 7 received similar praise, raising expectations for strong sales in the second half. Samsung said in August demand for the new handset, priced at 988,900 won ($882) in South Korea, was far exceeding supply, pushing the firm to delay the launch in some markets. HDC Asset Management fund manager Park Jung-hoon said it now appeared inevitable thatSamsung‘s smartphone average selling price and profits would miss lofty second-half expectations. “Apple is supposed to show off the iPhone 7 next week and this issue has emerged, so the current state of things do not look good,” he said. Though a components pick-up will buttress overall profits, Park said mobile operating profit might decline by up to 200 billion won for July-September. The mobile division accounted for about 54 percent of Samsung Electronics’ January-June operating profit of 14.8 trillion won. Hyundai Securities said in a report that the Galaxy Note 7’s problems should be resolved within a “few weeks.” The brokerage retained its third-quarter operating profit forecast of 8.5 trillion won. ($1 = 1,120.8100 won) (Reporting by Se Young Lee; Editing by Stephen Coates and Simon Cameron-Moore) |
Monday, September 5, 2016
Samsung’s New Phone Delayed After Reports of Exploding Batteries - TIME Business
What SpaceX’s Rocket Explosion Means for Elon Musk - TIME
Posted: 01 Sep 2016 01:51 PM PDT
Elon Musk has a thing for moving fast. Back in 2000, according to a story Musk told in an interview with technology journalist Sarah Lacy, he was driving along California’s Sand Hill Road in his McLaren F1 with Peter Thiel, his co-founder at PayPal. When Thiel asked, “So what can this do?” Musk replied, “Watch this” and floored the car so hard it entered a tailspin before spiraling into a crash.
Both men emerged unscathed and hitchhiked their way to a meeting with venture firm Sequoia Capital. But the anecdote has renewed relevance this week because of Lacy’s follow-up question: “Is there a parallel with how you build companies and that story?” “I hope not,” Musk said, laughing. “That could be awkward with a rocket launch.”
SpaceX has come a long way since Musk, 45, founded it in 2002. But Thursday’s explosion of a rocket preparing for launch marks another setback for the company, and for Musk. No one was injured in the incident, which SpaceX saidoriginated in an oxygen tank while the rocket was being fueled a few days ahead of a scheduled launch. But millions of dollars in equipment was destroyed, including a satellite Facebook was hoping would bring Internet access to parts of Africa.
Facebook CEO Mark Zuckerberg, who happened to be in Africa at the time, posted an update saying he was “deeply disappointed” about the loss of the satellite, which could have helped his users there. Zuckerberg’s message seemed carefully worded to remain brusquely indifferent to SpaceX itself, focusing his lament on the damage to Facebook.
When launching rockets, failure is an all-too common and expensive risk. Last year, five of the world’s 86 total rocket launches ended in failure, including a SpaceX Falcon 9 that exploded two minutes after launch. Because of SpaceX’s high profile, its two failed launches in 15 months have drawn lots of media attention, heightening Musk’s reputation as a CEO who moves fast, even if it means breaking things — in spectacular fashion, in SpaceX’s case.
The SpaceX explosion is only the latest in a series of issues, both mechanical and financial, that has plagued SpaceX and Tesla, where Musk serves as CEO, as well as SolarCity, where Musk chairs the board and where his cousins serve as CEO and CTO. All three companies boast ambitious goals. SolarCity brings low-cost clean energy to the masses. Tesla aims to speed the transition to a sustainable-energy economy. SpaceX’s long-term goal is to make humans a multi-planetary species. Any one of these would be an audacious ambition for a corporate leader. All three at once may be a bit too much for any one human being.
That challenge doesn’t hinder Musk. Instead, it seems to spur him on. It’s like he’s sitting inside three racing cars at once – behind the wheel of two of them, a backseat driver in the third. Sometimes this leads to inspiring results, such as the breathtaking sight of a rocket landing agilely back on Earth after being launched to space. Other times it ends in a smoking wreck, as it did Thursday.
And yet, even this difficult trick is not enough of a challenge for Musk. He has consistently raised the bar for himself, by vowing a mission to Mars in two years, by angling to merge SolarCity with Tesla, and by doubling down on Tesla’s production goals. The problem for Musk in 2016 is, the bolder the goals become, the faster the crashes and glitches are coming.
Musk’s plan to merge Tesla and SolarCity has inspired more skepticism than encouragement among investors. The Wall Street Journal said this week that both companies are “facing financial crunches,” with Tesla planning to raise more money this year. Some investors see the tie-up as a bailout for SolarCity, which according to an SEC filing approached several companies about a buyout or investment but came up empty handed.
Integrating the companies could slow the amped-up production schedule Musk has set for Tesla. Musk is pushing to begin production of the $35,000 Model 3 by next July, a bold goal given the delays in production faced by the Model X SUV that Musk recently described as hellish and a result of the company’s hubris. The thing is, though, Tesla did overcome all of its production problems. It took longer than expected, but then again Tesla is also revamping the way cars are manufactured.
In other words, speed bumps are going to appear on the road to the future. And the bumps facing Musk’s companies, because of their high profiles, will draw attention. He may yet succeed. But right now, the setbacks and speed bumps are coming more frequently. But Musk seems happy to hit the gas pedal as he approaches them.
Brexiters promise of points immigration system not happening - Independent
Downing Street dispels any remaining suggestion that Theresa May will consider an Australian-style points-based immigration system saying it is "not an option".
The idea was promised by key Leave campaigners, including Boris Johnson and other members of Mrs May's cabinet, as the answer to lowering the immigration.
But Mrs May has long been sceptical of the system and told reporters on the way to the G20 in Hangzhou this week that it is not certain a PBS would work, risking Cabinet divisions over the issue.
leaves a decision on who comes to the country down to regulation, while Mrs May is hunting for solution that allows the Government to determine the volume of people coming in.
A Number 10 spokesman said: "One of the opportunities of Brexit is that we will be able to control the number of people coming to Britain from the EU.
"The precise way in which the Government will control the movement of EU nationals to Britain after Brexit is yet to be determined. However, as the PM has said many times in the past, a PBS will not work and is not an option.
"When Labour introduced a PBS, the numbers went straight up. In Australia, they have a PBS, and they have higher immigration per capita than Britain. A PBS would give foreign nationals the right to come to Britain if they meet certain criteria.
"An immigration system that works for Britain would ensure that the right to decide who comes to the country resides with the Government."
Foreign Secretary, regularly expressed support for a PBS as he travelled the UK on the Brexit campaign bus. International Trade Secretary Mr Fox made the system one of the first policies of his Tory leadership bid.
International Development Secretary Priti Patel, Transport Secretary Chris Grayling and Environment Secretary Andrea Leadsom have all said such a system could help the UK better manage the inflow of people.
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