Saturday, March 5, 2016

Inside China’s National People’s Congress - Financial Times

http://www.ft.com/intl/cms/s/0/c4eddaf6-e108-11e5-9217-6ae3733a2cd1.html#axzz41wEMxggf

March 3, 2016 9:13 am

Inside China’s National People’s Congress

Thousands of delegates from around China are gathering in Beijing this week for the National People’s Congress, an annual conclave that is the closest the ruling Communist party gets to seeking broader public input on its decisions. 
What is the NPC?
China’s version of the legislative branch of government, the NPC meets once a year for about 10 days in March. The meeting opens with pomp and ceremony at the Great Hall of the People, a temple to communist architecture built in the 1950s. The interior features thick red carpets, marble columns and lush decorations that aim to reflect the diversity of China’s provinces. The 2,943 delegates range from meek “model workers” and token ethnic minorities in colorful costumes to ministers and provincial party secretaries or captains of state-owned industry. The latter have been thinned by a two-year anti-corruption probe.
Is the NPC a rubber-stamp parliament?
Yes — every law that goes up before the NPC is passed and every ministerial appointment approved. But the body is not as supine as it appears on the surface. Many draft laws never make it to the NPC for a final vote, either because they have been blocked by industrial lobbies, are too socially controversial or because party backers realise opposition within the ranks is too high. Similarly, China’s tea-leaf readers love to count the votes on ministerial approval as a clue to who is genuinely popular and who is held in relative disregard.
Why do Chinese refer to the ‘two meetings’?
The NPC meets at the same time as the Chinese People’s Political Consultative Congress, an advisory body made up of 2,220 representatives from business, academia and the eight powerless “dwarf” parties that allied with the Communists during the Chinese civil war. While lacking formal power, CPPCC delegates tend to bring views from a broader segment of society. Some are also very active in organising fact-finding tours to explore social and economic issues, the results of which can influence national policy. The CPPCC’s fortunes waned under the absolute rule of Chairman Mao Zedong but the body was revived and expanded under Jiang Zemin in the 1990s, during a time of rapid economic opening.
So what do they do during those 10 days?
Delegates spend most of the time broken into groups, either by province or by affinity group, in the case of the CPPCC. Every delegate has to read a statement reflecting on the premier’s work report presented at the first session and senior leaders rotate among the delegations. The slogan-filled meetings may drone on but many delegates manage to inject their own priorities into their statements. Others come armed with dozens of proposals for how China can be better governed, many of which get an enthusiastic airing in the Chinese press. Some make their way into future policy initiatives.
Do the ‘two meetings’ ever change?
The openness of the meetings and the degree of genuine discussion as oposed to parrotting slogans varies considerably with the political climate. Since unusually lively meetings in 2007 and 2008, a power consolidation under Xi Jinping, China’s president and general secretary of the Communist party, has been reflected in much more stilted and closed NPC sessions.

Friday, March 4, 2016

Facebook Executive Released After Arrest for Withholding Information - TIME

Posted: 02 Mar 2016 10:05 AM PST

(RIO DE JANEIRO) — A Facebook executive arrested for refusing to give information about the company’s users to law enforcement was released from jail on Wednesday.
Diego Dzodan, Facebook’s most senior representative in Latin America, left a jail in Sao Paulo after one night in custody on a warrant issued by a judge in the northeastern state of Sergipe.
The warrant says Dzodan repeatedly failed to comply with a judicial order to cooperate with an investigation into drug trafficking and organized crime. The company had ignored requests to surrender user information from the WhatsApp messaging service, an application bought by Facebook in 2014.
According to police, investigators first contacted the company four months ago, but received no response. Starting two months ago, the company was fined 50,000 Brazilian reais ($12,700) for every day it ignored the order, an amount which rose to 1 million Brazilian reais ($250,000) in recent weeks.
Brazilian police argue that Facebook’s stance is at odds with those of Yahoo, Google and local telecommunications companies, which have been willing to hand over user information to help investigations.
WhatsApp insists that is it unable to provide information that it does not have to the authorities. In a statement released on Wednesday, the company said, “arresting people with no connection to pending law enforcement investigation is a capricious step and we are concerned about the effects for the people of Brazil and innovation in the country.”
The Brazilian authorities’ tussle with Facebook has drawn comparisons to the FBI’s battle with Apple following its request that the company unlock the iPhone belonging to one of the terrorists who carried out the San Bernardino killings.
“The Apple vs FBI case and the WhatsApp case are in many ways exactly the same thing,” said Zaki Manian, a cryptography engineer and privacy activist. “The encryption systems employed by these companies is such that they do not have access to encrypted data. The only way the company could access the data would be to employ a malicious update to allow access.”
While some companies have been willing to design systems in which intercepts were possible, many tech companies are taking the opposite approach in the wake of the outraged reaction to the U.S. National Security Agency’s mass-surveillance program revealed by the whistleblower Edward Snowden.
“After the Snowden disclosures, my understanding was that the Brazilians were very upset to learn how easy it was for the NSA to spy on their communications,” said Chris Soghoian, the principle technologist of the American Civil Liberties Union. “What the Brazilians apparently want is something that cannot exist. There is no way to design a service that is secure from the NSA that allows local law enforcement access.”
Dzodan’s arrest is not the first time the Brazilian authorities have come into conflict with Facebook. In December a judicial order forced Brazil’s telecommunications companies to block WhatsApp over its refusal to cooperate with a police inquiry. The move snarled communications for many of its 100 million users in Brazil for around 12 hours. Facebook CEO Mark Zuckerberg at the time said he was “stunned” by the “extreme decision.”

Wednesday, March 2, 2016

3 Leadership Lessons From Warren Buffett - Fortune


Posted: 29 Feb 2016 11:42 AM PST

Warren Buffett’s annual letter to Berkshire Hathaway shareholders, released last Saturday, is scrutinized worldwide for economic and investing insights. Understandably so; in 2015 Berkshire had, guess what, another knockout year. Yet I can’t recall ever seeing it read as a leadership document. That’s what it is, though, and this year’s letter shows why Buffett has been so extraordinarily successful not just as in investor but also as a business leader. Three traits stand out.
-He’s optimistic. What comes through most strongly, as it does almost every year, is a powerfully upbeat attitude. No one has ever answered the call of someone who says, “Our situation is hopeless. Follow me.” Effective leaders have figured out how to be optimistic while simultaneously confronting reality, regardless of the circumstances. Buffett does that this year by responding to the presidential candidates, who “can’t stop speaking about our country’s problems (which, of course, only theycan solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do.” Nonsense, Buffett says: “The babies being born in America today are the luckiest crop in history.”
Unfounded wishful thinking? Through simple math – this is the confronting reality part – Buffett supports his argument. He shows that even “the much-lamented 2%” annual growth of America’s economy in recent years “delivers astounding gains” in just one generation. And he’s right. At that rate, and if America’s population continues to expand as it’s doing now, real per-capita GDP will grow 34.4% in 25 years. That is indeed a giant increase, and Buffett explains its full meaning at some length. By the time he’s done, it’s hard to dispute his conclusion, based on hard facts, that “America’s kids will live far better than their parents did.”
-He explains what he’s doing so that anyone can understand it. Trusting leaders is important, but we all feel more comfortable knowing what they’re doing and why. Part of Buffett’s genius has long been his ability to explain the financial workings of a massive conglomerate in language that real people use. This year he devotes most of the letter to explaining just how each of Berkshire’s main businesses operates and how each performed. I defy anyone who reads those pages to come away confused. On the contrary, you come away thinking, “This guy knows what he’s doing.” Because he doesn’t ask you to trust him, you trust him more.
-He admits mistakes and makes no attempt to sugarcoat them. I’m not aware of any other leader who every year acknowledges his errors as openly as Buffett does. Again this year he admits “serious errors I made in my job of capital allocation” and mistakes “in evaluating either the fidelity or the ability of incumbent managers or ones I later appointed.” And then, as usual, he goes further: “I will commit more errors; you can count on that.” Again, this makes you more confident in him, not less. Yet most leaders haven’t learned that lesson.
American Express CEO Ken Chenault, a leader whom Buffett admires greatly – Berkshire owns almost 16% of Amex – says “The role of a leader is to define reality and give hope.” You won’t find that done any better than Buffett does it in this year’s letter.
This article originally appeared on Fortune.com

Tuesday, March 1, 2016

One Day Until Super Tuesday, When Some Clarity (Maybe) Moves In - New York Times

One Day Until Super Tuesday, When Some Clarity (Maybe) Moves In 

Monday, February 29, 2016

Good Monday morning.
A raucous Republican race could gain clarity this week, and Senator Bernie Sanders of Vermont could face a dwindling opportunity to prove he can develop support beyond his coalition of younger, whiter voters, as the parallel primaries head into Super Tuesday.  
With roughly a dozen nominating contests in both primaries, the Republican votes present an opportunity for Donald J. Trump to amass a plurality of the 595 delegates available, and to put that much more distance between him and Senators Ted Cruz of Texas and Marco Rubio of Florida. Mr. Cruz is fighting to win his home state of Texas, which votes on Tuesday, while Mr. Rubio is looking to increase his vote totals in congressional districts and to bolster his delegate count.  
But it also appears that those in the Republican Party who do not back Mr. Trump are realizing that he could be their problem through the fall. And in the last two days, Mr. Trump has given his opponents a lot of ammunition — by initially refusing to disavow support from the former Ku Klux Klan leader David Duke, who has praised Mr. Trump’s ascent in the primaries, and by retweeting a famous quote from Mussolini.  
Mr. Trump has proved Teflon-like in the campaign so far. But he is now facing the first sustained attacks in the form of television advertisements, and he is doing little to counter them with his own spending. And Mr. Rubio and Mr. Cruz are unloading their opposition research files, including mentions that Mr. Trump avoided the military draft as a younger man and that some news accounts have claimed his businesses had reported ties to organized crime. But the biggest charge that Mr. Rubio hopes will stick is the one in which he has called Mr. Trump a “con man” over and over. With lesser schoolyard taunts, like discussing the size of Mr. Trump’s fingers, he is trying to get in the real estate billionaire’s head. 
As for the Democrats, Mr. Sanders is looking to rebound after a deeply lopsided loss to Hillary Clinton in the South Carolina primary, where more than half the voters were African-American. Mrs. Clinton overwhelmingly won black voters. And while it is hard to translate the results from one state to others, Mr. Sanders had a number of paid staff members in South Carolina and worked hard — raising questions about where he will next find success.  
  
What We’re Watching Today
• On the day before 11 states participate in Super Tuesday, where are the candidates choosing to make their final appeals? On the Democratic side, both Mrs. Clinton and Mr. Sanders will be in Massachusetts, where 116 delegates are at stake and where polls show Mrs. Clinton with a slight edge. Mr. Sanders will also be in Minnesota, 93 delegates, and Mrs. Clinton will be in Virginia, 110. 
• Mr. Rubio will appear in several of the states, including Georgia, 76 delegates; Tennessee, 58; Arkansas, 40; and Oklahoma, 43. Mr. Trump and Ben Carsonwill be in Virginia, 49. Gov. John R. Kasich of Ohio will be in Massachusetts, 42 delegates, and Vermont, 16. Mr. Cruz will be in Minnesota, 38, and Texas, his home state and, with its 155 Republican delegates, the contest on which he is staking his strategy.

Monday, February 29, 2016

Warren Buffett: U.S. Economy Better Than Presidential Hopefuls Say - TIME

Posted: 27 Feb 2016 07:33 AM PST

(OMAHA, Neb.) — The United States’ economy is in better shape than the presidential candidates make it seem, investor Warren Buffett said Saturday, even though businesses like his still face challenges.
In his annual letter to Berkshire Hathaway shareholders, Buffett didn’t name specific candidates or issues, but noted that the negative drumbeat about the economy, health care reform and income inequality may get voters down about the future.
“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve),” he said, adding later, “that view is dead wrong: The babies being born in America today are the luckiest crop in history.”
Buffett noted that there will still be economic troubles as business evolves, but that the country needs to make sure it has a solid safety net to help people who lose jobs.
“The answer in such disruptions is not the restraining or outlawing of actions that increase productivity. Americans would not be living nearly as well as we do if we had mandated that 11 million people should forever be employed in farming,” he wrote.
Buffett pointed out that change also creates challenges for Berkshire’s businesses. For instance, its BNSF railroad is certain to haul less coal in the future and Geico insurance could be hurt by driverless cars.
He assured shareholders that Berkshire’s businesses will adapt just as the company did when its original Berkshire Hathaway textile operation failed.
Buffett’s letter is one of the most well-read documents the business world each year because of his successful track record and his knack for explaining complicated subjects in simple terms.
Buffett said the book value of Berkshire’s businesses improved 6.4 percent last year even as its stock price fell 12.5 percent. When dividends are factored in, the S&P 500 gained 1.4 percent by comparison. Buffett has warned that it will be increasingly hard for Berkshire to continue beating the market because the company is so large.
Berkshire Hathaway employs more than 360,000 people at its eclectic mix of companies, including insurance, utilities, railroad, manufacturing and retail firms. Berkshire also holds significant stakes in Coca-Cola, Wells Fargo, American Express, IBM and other companies.

Sunday, February 28, 2016

U.S. Economy’s Year-End Slowdown Not as Bad as Expected - TIME Business

Posted: 26 Feb 2016 01:17 PM PST

Twitter has spent its entire existence, especially since becoming a public company, in the shadow of Facebook. So maybe it shouldn’t come as a shock that someone asked Facebook CEO Mark Zuckerberg what he would do if he was CEO of Twitter, which has suffered stalled user growth and a slumping stock price in recent months.
Zuckerberg fielded the question at a town hall Q&A session in Berlin, according to VentureBeat. Though he initially said he didn’t know how to answer the question, he eventually pivoted to crow about Facebook’s own successes, especially the rapid growth of Instagram. The photo-sharing network is similar to Twitter in that many people flock to it in order to keep up with public figures, according to Zuckerberg. But Instagram has now exceeded Twitter by many major metrics. Instagram has more than 400 million users compared to Twitter’s 320 million and it has 200,000 advertisers compared to Twitter’s 130,000.
The next big development in this relationship between public figures and their followers will be live broadcasting, Zuckerberg predicts. Facebook has been heavily pushing live video and is now rolling out live-streaming to its Android users. Twitter, meanwhile, bought the live-streaming app Periscope in March.
“‘Live’ is going to be an awesome thing for public figures… imagine your favorite public figure or politician having the power to broadcast from their pocket, go live, have an audience of thousands of people,” Zuckerberg said. “I think you’re going to see a lot of that on Instagram and Facebook, and if the Twitter folks do a good job, I think you’ll see a lot more of that on Twitter too.”
The challenge for Twitter, of course, will be to figure out how to effectively fit live video into the core user experience before Zuckerberg and his employees do.
Posted: 26 Feb 2016 11:49 AM PST

Put one in the win column for Samsung.
The U.S. Court of Appeals for the Federal Circuit on Friday ruled (PDF) in favor of Samsung in a long-fought patent battle with Apple. The court’s ruling means Samsung will not be required to pay $120 million in patent-infringement damages, nor will it need to alter any product designs, dealing a blow to Apple’s argument that Samsung has “slavishly” stolen its intellectual property.
In its ruling, the U.S. Court of Appeals said that Samsung did not in fact violate patents Apple holds related to turning alphanumeric characters, such as phone numbers, into links, as well as the iPhone’s slide-to-unlock feature. The court also reversed an earlier jury decision that Samsung violated an Apple patent on auto-correction.
The court was particularly scathing in its comments about Apple’s patents, calling them “obvious”—a term used to describe technologies that are not deserving of patents. The court added that Apple’s slide-to-unlock and auto-correct patents are “invalid.”
Apple and Samsung have been battling over patents since 2011. Both companies have said that the other has violated patents they own related to mobile technology and design. As the patent-infringement cases extended across the U.S. and Europe, neither Apple nor Samsung won a significant case until 2012, when Apple won a landmark ruling in California that awarded the company more than $1 billion in damages.
Since then, the companies decided to scuttle their international disputes and focus solely on the U.S., but the patent-infringement cases have continued to fly. Over the last couple of years, a series of appeals, rulings, and trials whittled down Apple’s $1 billion in damages to $548 million. Samsung has appealed that case to the U.S. Supreme Court in hopes of ultimately dealing a final blow and retrieving its cash from Apple, which is currently holding it until the Supreme Court decides whether to hear the case.
The case in question on Friday is the other big battle between Apple and Samsung. Like the other case, Apple and Samsung sued each other over alleged patent infringement across a slew of mobile devices. Apple had initially sought $2 billion on the patents cited in the case, but was awarded just $120 million by a jury in 2014.
At that time, the jury also awarded Samsung over $158,000 for Apple’s alleged infringement of a patent related to the way photos and videos are organized in folders. Interestingly, the U.S. Court of Appeals sided with the jury on Friday, meaning Samsung will still be able to collect that small sum of cash if Apple doesn’t appeal the ruling.
Samsung argument in the case centered on the idea that Apple’s patents are invalid and obvious, and should not be a legitimate means by which the company could collect damages. The court’s agreement calls into question the validity of Apple’s patents and whether the company could (and should) hold patents related to so-called “obvious” technologies like slide-to-unlock—a software mechanism that allows users to unlock their smartphones.
Given that, it’s possible the issue could ultimately find its way to the U.S. Patent and Trademark Office (USPTO), which awarded the patents to Apple. The USPTO has reviewed the legitimacy and validity of Apple patents in the past, most recently examining whether the so-called ‘915 patent, which describes how the pinch-to-zoom feature works on touch devices, is “patentable.” The USPTO has on separate occasions determined that the ‘915 patent should not have been awarded, forcing Apple to file an appeal last year to the Federal Circuit in hopes of keeping its patent and the damages associated with it.
With the latest ruling now in, Apple has effectively lost $120 million in damages it would have otherwise received from Samsung and will now need to pay out a little over $158,000. The company can either accept the ruling or appeal it, though it hasn’t said what its next move will be.
An Apple spokesperson declined to comment on the ruling.
In addition to Samsung, several industry giants, including Google, Facebook, and eBay, may be pleased by today’s ruling. In July, those companies, along with others in the industry, filed a brief with the Federal Circuit Court supporting Samsung’s fight with Apple. The companies argued that if Apple’s victories are allowed to stand, it could unleash a series of subsequent patent lawsuits utilizing the same intellectual property to target other device makers. Those lawsuits, the coalition said, would negatively affect the development of “useful modern technologies” and “have a devastating impact on companies.”
Samsung did not respond to a request for comment.
This article originally appeared on Fortune.com
Posted: 26 Feb 2016 11:40 AM PST

The extent of Apple’s ambitions in the automobile market have taken centerstage—previously occupied by rumblings of a tablet or television set—in the canon of long-running rumors about the company’s future plans. CEO Tim Cook again addressed the issue Feb. 26 during the company’s annual shareholder’s meeting in Cupertino, Calif. Asked about the potential for an iCar of sorts, Business Insider reported he said:
Do you remember when you were a kid, and Christmas Eve, it was so exciting, you weren’t sure what was going to be downstairs? Well, it’s going to be Christmas Eve for a while.
Before answering, Cook kidded his questioner “maybe I should have called on someone else.”
In a recent interview with Fortune, he addressed the spate of hires in the car space many have taken as confirmation of the firm’s interest in challenging locals Google and Tesla, not to mention potential competitors in Detroit. “The great thing about being here is we’re curious people. We explore technologies, and we explore products,” Cook told the magazine. “And we’re always thinking about ways that Apple can make great products that people love, that help them in some way. And we don’t go into very many categories, as you know. We edit very much. We talk about a lot of things and do fewer. We debate many things and do a lot fewer.”
Tesla CEO Elon Musk has called Apple’s plans around building a car an “open secret,” something Apple itself has never confirmed. Reports about the project, supposedly called “Project Titan” internally, claim that some 600 employees are attached. Steve Zadesky, the executive many think in charge of Titan, recently left the company.
Posted: 26 Feb 2016 08:28 AM PST
The next time you actually click a Facebook ad, you may not get shuttled over to a marketer’s website. The social network announced Feb. 25 that it’s opening up Canvas, its full-screen multimedia ad format, to all advertisers.
The goal of Canvas is to show users more engaging ads that load much faster than the external webpages to which ads often point. Canvas ads reside in the News Feed just like traditional ads, but when clicked they expand into a full-screen ad that can include images, text and video.
A big problem with mobile advertising is that it’s harder for marketers to really grab a user’s attention with such a small amount of visual real estate. These new ads, like the vertical ads on Snapchat, are likely to leave a bigger impression than banner ads or other types of mobile marketing.
Major brands like Coca-Cola and Burberry have already used the format and, according to Facebook, found it effective. In Coke’s case, people who viewed the ad watched it for 18 seconds on average, which is a long time in the battle for attention on mobile devices.
The ad format is the latest initiative in Facebook’s ongoing plan to move more Internet activity to its own apps. The social network recently launched Instant Articles, which let news organizations load their content directly into the Facebook app for faster loading.
Posted: 26 Feb 2016 07:38 AM PST
Weight Watchers sales declined rapidly in the last quarter, despite media celebrity Oprah Winfrey’s investment and advertising campaign.
Weight Watchers reported a 21% drop in quarterly revenue down to $259.2 million, and active subscriber membership dipped 4.8% during the fourth quarter ending Jan. 2, Reuters reports.
Winfrey joined the weight-loss company in October 2015 after it had experienced a nearly three-year decline in sales. She made a $43.2 million investment for a 10% stake and was added to the company’s board; its stock more than doubled on the day her involvement was announced.
Posted: 26 Feb 2016 07:38 AM PST

Kohl’s will close 18 stores in 2016 in anticipation of another year of meager sales gains. The number may not sound huge, but it’s the first time the retailer has had a store-closing campaign.
Earlier this month, Kohl’s reported comparable sales rose a modest 0.4% during the holiday season. Now the department store expects comparable sales, which exclude recently closed or opened stores, to range from unchanged to rising 1% for most in 2016. Total sales may even fall, Kohl’s warned investors on Thursday. So now the retailer has decided to pare some of its 1,160-store fleet. (Macy’s has also announced store closings because of weak sales.)
“While the decision to close stores is a difficult one, we evaluated all of the elements that contribute to making a store successful, and we were thoughtful and strategic in our approach. We are committed to leveraging our resources on our more productive assets,” Kohl’s CEO Kevin Mansell said in an interview.
While the planned closings represent not even 1% of square footage, they represent a shift in Kohl’s strategy toward smaller stores and outlets. As first reported by Fortune in October, Kohl’s will open seven smaller stores of 35,000 square feet each, or just under half the size of a regular Kohl’s store, in 2016. The retailer will also expand its new chain of outlets called Off-Aisle, adding two locations to the pilot stores. What’s more, Kohl’s will open 12 Fila outlet stores to showcase that sportswear brand.
The shift comes as Kohl’s turnaround plan, launched in 2014 and called the “Greatness Agenda,” has helped it avoid sales declines that have hurt Macy’s, but they still have yet to significantly boost sales. The chain has reported five straight quarters of comparable sales growth, but the pace of gains has been modest.
Kohl’s had promised investors that sales would go from $19 billion in 2014 to $21 billion by 2017. But with the company forecasting total sales from down 0.5% to up 0.5% from 2015’s $19.2 billion levels, Kohl’s is clearly not on track.
This article originally appeared on Fortune.com
Posted: 26 Feb 2016 07:38 AM PST

Subway, the world’s biggest fast-food restauranteur, will next month add a new chicken sandwich to its menu, one that will feature antibiotic-free meat for the first time in the chain’s history.
The new sandwich, which Subway showcased at a media event in Manhattan this week, will debut on March 1 at U.S. restaurants. Subway says the new rotisserie-style chicken sandwich also features no artificial colors, flavors, or preservatives.
The menu addition is part of a broader plan by Subway to transition to only serving chicken raised without antibiotics, with a promise to make the transition for all chicken it serves in the U.S. by the end of 2016. It will also transition to turkey raised without antibiotics over the next two to three years, while the pork and beef phase will be completed in 2025. The longer delay for those meats is because it takes longer for those animals to mature, and thus the change takes more time for suppliers to implement.
“We are looking at all our menu items and ingredients and looking at how we can make those ingredient lists cleaner so customers can understand what’s in their food,” Lanette Kovachi, Subway’s global dietitian, told members of the media at a Subway store in New York City. She added that by the end of this year, Subway will have removed all artificial colors and flavors across the entire menu.
Quick-service restaurant (QSR) concepts like Subway have made public strides to source ingredients that consumers have deemed healthier or come from more humane practices. Subway, like McDonald’s, Dunkin Brands and several others, has vowed to switch to cage-free eggs. In Subway’s case, that change is set to be completed by 2025.
Subway, which opened its first store in 1965, says it has been on this journey for many years. It points to past initiatives to fortify bread with calcium and vitamin D; reduce sodium; and provide clearer details about the nutritional information for items on Subway’s menus.
The restaurant chain, along with many of the industry’s largest brands, including McDonald’s and Burger King, have faced challenging sales trends as consumers have shifted their spending patterns. Fast-casual concepts with more focused menus are winning business away from the QSR concept. Consumers are also increasingly visiting convenience stores and supermarkets, which are offering more freshly made grab-and-go menu items.
So Subway, like many of its competitors, is responding to a consumer-driven trend. And it are leaning on its suppliers to change their manufacturing process so Subway can offer antibiotic-free meats and other healthier fare. Will the fresher and cleaner image Subway espouses boost sales? Only time will tell.
“Today’s consumer is ever more mindful of what they are eating, and we’ve been making changes to address what they are looking for,” Dennis Clabby, executive vice president of Subway’s Independent Purchasing Cooperative (IPC), said in a statement last year.
This article originally appeared on Fortune.com
Posted: 26 Feb 2016 07:14 AM PST

(WASHINGTON) — The U.S. economy’s slowdown in the final three months of 2015 wasn’t quite as bad as initially thought.
The gross domestic product, the broadest measure of economic health, grew at an annual rate of 1 percent in the fourth quarter, the Commerce Department reported Friday. That’s an improvement from the first estimate of 0.7 percent, though just half the 2 percent growth posted in the third quarter.
The revision was made because the downturn in business stockpiling was less severe than the government’s first estimate. That helped offset slightly weaker consumer spending.
The latest figure, however, does little to change the fact that growth in the final months of 2015 was modest. Since then, global weakness and financial market turbulence have triggered worries about the potential fallout on the U.S. economy.
Still, economists are confident that GDP is poised to accelerate this quarter. Steady job gains and faster wage growth are boosting consumer spending, which accounts for more than two-thirds of the economy.
“First-quarter GDP growth is on track to rebound to a very healthy 2.5 percent (rate) which should dampen any concerns about an imminent recession,” said Paul Ashworth, chief U.S. economist at Capital Economics.
The fourth-quarter figure marks the slowest growth in six months, since the economy skidded to a weak 0.6 percent showing in the first quarter last year. That was followed by a solid rebound to 3.9 percent in the second quarter and then the 2 percent gain in the summer.
Friday’s upward revision stems from a tweak in the government’s data for business stockpiles. That translated into a 0.1 percentage point drag on growth, rather than a 0.5 percentage point drag initially reported. This change could weigh on first quarter activity if businesses are reluctant to add to their stockpiles.
In addition, the trade deficit subtracted 0.3 percentage point from growth, rather than the 0.5 percentage point drag in the first report. Exports still suffered, reflecting the struggle American manufacturers are having from a stronger dollar. But the country imported less than first thought.
Consumer spending grew at a 2 percent rate in the fourth quarter, down from an initial estimate of 2.2 percent. Spending had surged at a 3 percent rate in the third quarter, and economists are counting on a rebound in the current quarter. Also weighing on growth in the fourth quarter was a downward revision to government spending, which fell at a 0.1 percent rate instead of a 0.7 percent rise first reported.
All the changes in the fourth quarter left GDP growth for the year unchanged at 2.4 percent, the same as 2014.
While some economists have boosted the odds of a recession because of the declines in stock prices this year, Gus Faucher, senior economist at PNC Financial Corp., said he believe the economy will keep growing. He forecasts GDP will expand 2.3 percent this year, little changed from the past two years.
“The decline in stock prices is something to watch out for, but consumer spending is being helped by rising home prices that are boosting household wealth, continued solid job growth and increased wage growth,” Faucher said.
In addition, economists view the big decline in energy prices as the equivalent of a tax cut, giving consumers more money to spend on other items.

Saturday, February 27, 2016

Samsung Wins Appeal in $120M Patent Fight With Apple - Fortune

Posted: 26 Feb 2016 11:49 AM PST

Put one in the win column for Samsung.
The U.S. Court of Appeals for the Federal Circuit on Friday ruled (PDF) in favor of Samsung in a long-fought patent battle with Apple. The court’s ruling means Samsung will not be required to pay $120 million in patent-infringement damages, nor will it need to alter any product designs, dealing a blow to Apple’s argument that Samsung has “slavishly” stolen its intellectual property.
In its ruling, the U.S. Court of Appeals said that Samsung did not in fact violate patents Apple holds related to turning alphanumeric characters, such as phone numbers, into links, as well as the iPhone’s slide-to-unlock feature. The court also reversed an earlier jury decision that Samsung violated an Apple patent on auto-correction.
The court was particularly scathing in its comments about Apple’s patents, calling them “obvious”—a term used to describe technologies that are not deserving of patents. The court added that Apple’s slide-to-unlock and auto-correct patents are “invalid.”
Apple and Samsung have been battling over patents since 2011. Both companies have said that the other has violated patents they own related to mobile technology and design. As the patent-infringement cases extended across the U.S. and Europe, neither Apple nor Samsung won a significant case until 2012, when Apple won a landmark ruling in California that awarded the company more than $1 billion in damages.
Since then, the companies decided to scuttle their international disputes and focus solely on the U.S., but the patent-infringement cases have continued to fly. Over the last couple of years, a series of appeals, rulings, and trials whittled down Apple’s $1 billion in damages to $548 million. Samsung has appealed that case to the U.S. Supreme Court in hopes of ultimately dealing a final blow and retrieving its cash from Apple, which is currently holding it until the Supreme Court decides whether to hear the case.
The case in question on Friday is the other big battle between Apple and Samsung. Like the other case, Apple and Samsung sued each other over alleged patent infringement across a slew of mobile devices. Apple had initially sought $2 billion on the patents cited in the case, but was awarded just $120 million by a jury in 2014.
At that time, the jury also awarded Samsung over $158,000 for Apple’s alleged infringement of a patent related to the way photos and videos are organized in folders. Interestingly, the U.S. Court of Appeals sided with the jury on Friday, meaning Samsung will still be able to collect that small sum of cash if Apple doesn’t appeal the ruling.
Samsung argument in the case centered on the idea that Apple’s patents are invalid and obvious, and should not be a legitimate means by which the company could collect damages. The court’s agreement calls into question the validity of Apple’s patents and whether the company could (and should) hold patents related to so-called “obvious” technologies like slide-to-unlock—a software mechanism that allows users to unlock their smartphones.
Given that, it’s possible the issue could ultimately find its way to the U.S. Patent and Trademark Office (USPTO), which awarded the patents to Apple. The USPTO has reviewed the legitimacy and validity of Apple patents in the past, most recently examining whether the so-called ‘915 patent, which describes how the pinch-to-zoom feature works on touch devices, is “patentable.” The USPTO has on separate occasions determined that the ‘915 patent should not have been awarded, forcing Apple to file an appeal last year to the Federal Circuit in hopes of keeping its patent and the damages associated with it.
With the latest ruling now in, Apple has effectively lost $120 million in damages it would have otherwise received from Samsung and will now need to pay out a little over $158,000. The company can either accept the ruling or appeal it, though it hasn’t said what its next move will be.
An Apple spokesperson declined to comment on the ruling.
In addition to Samsung, several industry giants, including Google, Facebook, and eBay, may be pleased by today’s ruling. In July, those companies, along with others in the industry, filed a brief with the Federal Circuit Court supporting Samsung’s fight with Apple. The companies argued that if Apple’s victories are allowed to stand, it could unleash a series of subsequent patent lawsuits utilizing the same intellectual property to target other device makers. Those lawsuits, the coalition said, would negatively affect the development of “useful modern technologies” and “have a devastating impact on companies.”
Samsung did not respond to a request for comment.
This article originally appeared on Fortune.com

Friday, February 26, 2016

This City Has the Most Billionaires - TIME

Posted: 24 Feb 2016 06:21 AM PST

(BEIJING) — Move over, New York City: Beijing is the new “Billionaire Capital of the World.”
The Chinese capital has overtaken the Big Apple as home to the most billionaires — 100 to 95 — according to Hurun, a Shanghai firm that publishes a monthly magazine and releases yearly rankings and research about the world’s richest people and their spending habits.
The study, which comes months after reports suggested China now has more billionaires than the United States, highlights how China’s elite are continuing to accrue vast wealth despite a wobbling stock market and cooling economy.
Different tabulations of wealth, such as the Hurun Report and the Forbes list, have historically produced somewhat different results depending on their methodology.
Rupert Hoogewerf, the founder of Hurun, attributed China’s explosive wealth creation to Chinese market regulators allowing a flood of new initial public offerings after holding back new IPOs for several years.
Hoogewerf said his wealth calculations were made using stock prices as of Jan. 15, which means they took into account the Chinese market’s 40 percent tumble over the past half year.
Had the calculations been made at the market’s peak last summer, the number of Chinese billionaires would have been nearly 150, Hoogewerf said.
Beijing took the title from New York after minting 32 new billionaires last year, while New York gained four. Moscow came in third place, with 66 billionaires, while Hong Kong and Shanghai came in fourth and fifth with 64 and 50, respectively, Hurun said.
China’s richest man, real estate tycoon Wang Jianlin, came in 21st place globally behind Wal-Mart scions, the Swedish family that owns Ikea and Brazilian investor Jorge Paulo Lemann. Other Chinese billionaires in the global top 100 included Alibaba founder Jack Ma, beverage magnate Zong Qinghou, and the tech bosses at phone maker Xiaomi, social media firm Tencent and Baidu, the search engine.
Hoogewerf said China had a particularly high proportion of self-made billionaires compared to the United States.
“What we showed today is that at the super-wealth creation level, the Chinese are now leading,” Hoogewerf said. “People will look at China the same way that people looked at Stanford or Silicon Valley in the 1990s.”

Thursday, February 25, 2016

Scientists Find Causes of Takata Air Bag Explosions - TIME business


Posted: 23 Feb 2016 06:41 PM PST

(DETROIT) — Scientists hired by the auto industry have determined that multiple factors — including moisture and high humidity — can cause some Takata air bags to inflate with too much force and hurl shrapnel at drivers and passengers.
The Independent Testing Coalition, which has been investigating the cause for the past year, announced its findings Tuesday.
Air bags made by Japan’s Takata Corp. have caused at least 10 deaths and 139 injuries worldwide. The exact cause of the problem has eluded investigators for more than a decade, although more recent probes have focused on Takata’s use of a mixture of ammonium nitrate and other chemicals to create a small explosion and inflate the air bags in a crash.
The rocket science company Orbital ATK, which was hired by the coalition, determined that three factors, working together, can cause the air bags to explode. Using an ammonium nitrate compound without a moisture-absorbing substance — as Takata does — increases the risk of an explosion after long-term exposure to high temperatures and moisture. Orbital ATK also found that Takata’s inflator assembly doesn’t adequately prevent moisture from intruding in very humid conditions.
The coalition said its findings apply to around 23 million of the 28 million Takata air bag inflators that have been recalled by the U.S. government. All of those air bags use specially formulated ammonium nitrate without a drying agent.
David Kelly, a former acting administrator of the National Highway Traffic Safety Administration and the coalition’s project manager, said that while humidity and ammonium nitrate have been discussed as factors, this is the first time scientists have determined all the factors that combine to cause the explosions. Kelly also said the design of the inflator is coming under more scrutiny than it has in the past.
Kelly said determining exactly what was causing the explosions was a critical step. Now, he said, investigators will focus on the performance of all of the inflators that are being used as replacement parts in ongoing recalls of Takata air bags. He said owners whose vehicles have been recalled should continue to get their air bags replaced while the investigation continues.
“If you don’t have the root cause, you’re just throwing stuff up on the wall,” he said. “You may never get to a situation where you can have an end game.”
Takata has given multiple explanations for the problem, including quality control problems at manufacturing facilities and exposure of the air bags to high humidity.
Frustrated by the numerous explanations and the slow pace of the investigation, 10 of Takata’s customers — Toyota, BMW, Fiat Chrysler, Ford, General Motors, Honda, Mazda, Mitsubishi, Nissan and Subaru — formed the Independent Testing Coalition and hired Orbital ATK in February of last year. Orbital makes rocket propulsion systems, small arms ammunition, warhead fuses and missile controls.
Kelly said he’s not sure how long the next phase of the investigation will take. Scientists need to replicate the behavior of air bags over a period of several years, which will take time, he said.
In a statement Tuesday, Takata said the coalition’s results are consistent with its own testing. Takata said age and long-term exposure to heat and high humidity appear to be significant factors in cases where inflators have malfunctioned. The company said it is cooperating with the coalition and the U.S. government.
The faulty inflators are used in both driver and passenger-side air bags. Globally, about 50 million inflators are subject to recall. U.S. safety investigators have said that the number of recalls is certain to grow as more tests are done.
Analysts say there could be 50 million or more Takata inflators in U.S. cars and trucks that haven’t been recalled yet. Takata must prove to U.S. regulators that the inflators are safe or all of them will be recalled starting in 2018.

Wednesday, February 24, 2016

Explainer: Hong Kong's 2016-17 Budget and What it Means for You - Hong Kong Magazine


What's in it for you in John Tsang's $38.8 billion relief package?

Feb 24, 2016
Financial secretary John Tsang Chun-wah delivered his ninth budget speech today to the Legislative Council. The government is offering a relief package of $38.8 billion: But what does that mean for the man on the Causeway Bay minibus?

Even less tax

One of the most eye-catching parts of the package is a 75 percent reduction in salary tax for 2015-16. Taxpayers will have up to $20,000 of their tax bill covered by it, and if there's extra then they'll get a check from the Inland Revenue Department. Nice.

More cash

There will be an increase in basic allowance from $120,000 to $132,000 and in married person’s allowance from $240,000 to $264,000, meaning you get to keep more of your cash before you're taxed on it. There are also increased allowances if you're maintaining a dependent parent or grandparent.

Flat-owners are still fine

Rates will be waived for four quarters of 2016-17, with a ceiling of $1,000 per quarter. Then again, if you own a flat in Hong Kong, $4,000 is probably chump change.

Business Owners Make Money

Just like personal income tax, profits tax for small and medium businesses in 2015-16 are coming down by 75 percent, again with a $20,000 cap. It's also a good time to start a business, as they're waiving registration fees. License fees are also being waived for travel agents, restaurateurs and hawkers for a six-month period.

Food Trucks

Despite initially announcing this last year, nothing really happened. But it's definitely happening this year, with 16 potential parking spots up for grabs. 

Old People Get a Break

Those who recieve Comprehensive Social Security Assistance welfare, disability allowance or old age allowances will get an extra month's worth free.
Of course, the critics are already out in force, bashing the package for a lack of relief measures for the poor, especially in terms of housing needs—including the cancellation of this year's one-month rent waiver for public housing residents.

Tuesday, February 23, 2016

Facebook’s Big Plan to Make Your Cellphone Faster - Fortune


Posted: 22 Feb 2016 06:30 AM PST

Facebook has teamed up with Nokia, Intel, and several telcos to create an open source hardware and software platform for the telecommunication industry designed to make it easier and faster to build communications networks. The program is modeled after a similar effort the social network created five years ago for its data center.
If successful, the project will help operators build networks using a more modular approach, but it will also change the economics of telco equipment providers such as Ericsson and Cisco .
Facebook is proposing the Telco Infra Project, or TIP. The goal is to build open source hardware and software that will cover the three elements of a telecommunications network: The access, the backhaul and the core. Access is how a phone or a computer gets online in the first place and includes elements like the base stations and cell towers. The backhaul is how the signals from the devices get onto the Internet itself, and includes fiber access or even copper or microwave, depending on the situation. Once it gets to the Internet, those data packets have to get where they’re going and be counted appropriately on the cellular network for billing or application purposes (things like traditional text messages are still routed differently than WhatsApp messages). This happens in the core.
That’s telecom 101, and, because it’s a system that has been built up over a century, it’s a mish-mash of complicated gear and proprietary software holding it all together. However, the Internet, and particularly the evolution of services that go over the top of carrier networks using data connections, have threatened the carrier’s business models. It’s hard to charge people 20 cents per text, for example, when Facebook Messenger or WhatsApp are “free” with a data plan.
The proprietary, cumbersome, and expensive mess of gear is holding carriers back. It raises their costs, keeps them from innovating quickly and forces their executives to fear becoming a dumb pipe.

Enter the cloud model

The solution for carriers has been to turn to cloud providers for inspiration. The big question for the telecommunications carriers is whether they can turn fast enough—and whether their vendors will move with them. For example, this shift in underlying infrastructure is behind AT&T’s move to adopt software-defined infrastructure. That infrastructure will hopefully give Ma Bell more flexibility to deliver services without having to manually change out its gear, and also helps it simplify the overall network design. As part of AT&T’s plans to build this new type of network, it announced last week that its SDN efforts were 5.7% complete in 2015 and would be 30% complete by the end of 2016. It plans to roll out its next-generation wireless network using equipment from Ericsson and Intel.
Facebook’s TIP has a similar goal to AT&T and is even working with Intel. Other partners include Deutsche Telekom, Nokia, SKTelecom and Globe Telecom.
Facebook hopes to create a more simplified network architecture using modular components that combine hardware and software. This would replace the expensive, proprietary gear that underlies telecommunications networks today. Facebook calls the efforts open, but there will be licenses involved, simply because the telecommunications world is far more complicated than the world of building servers, where Facebook has experimented with open source hardware before.
In April 2011, Facebook launched the Open Compute Foundation, an effort to build open source servers. At the time the goal was to help eliminate much of the unnecessary stuff that the server makers put on servers that Facebook felt added costs in terms of components and power draw. For a company like Facebook, which had tens of thousands of severs, $2 in extra components costs added up. A year ago, the company said investing in open source servers had saved it more than $2 billion.
What was good for Facebook and other big buyers of server gear was less of a win for the makers of the boxes themselves. While Dell and HP were on board as Open Compute partners from the get go, it’s no secret that the margins of building bare bones servers for the most demanding buyers are slim. Dell has made a go of it, while HP has struggled. As Facebook tries to bring this model to the telecommunications world, which has seen its business hurt by consolidation as well as the recent move to more open systems, things are about to become brutal.
So far, of the equipment vendors only Nokia is a member of TIP, leaving out the two largest telco equipment vendors Ericsson and Huawei. Ericsson did just join the Open Compute Foundation, the open source server project, which also counts Nokia as a member. Nokia has less to lose by becoming involved in any effort to build modular telecom gear. That was already a move that Alcatel-Lucent, the company that Nokia merged with, was veering toward. However, for other providers of gear, who tend to sell their equipment as a highly integrated system, modularity represents a threat.
Being able to pick and choose from a variety of vendors creates competition for the various elements of the network, where it didn’t really exist before. Axel Clauberg, a VP of aggregation, transport, IP & fixed access at Deutsche Telekom AG, said via email he’s looking forward to the lowered costs and potential boost in efficiency.
We believe that the exponential growth of Internet traffic requires new approaches, also on networking equipment like routers and switches. The Open Compute Project has proven that open specifications for hardware, combined with an active community, can have a drastic impact on efficiency and cost—TIP will trigger the same for all areas of the network.
As for existing vendors, Clauberg says of including companies such as Cisco and Juniper (whose gear is also likely to be hard hit by this initiative), “We are expecting similar changes as they already happened within the data center. While this impacts existing players, it also creates large opportunities.”

TIP in action

So far Facebook working with Globe has created the first pilot network using the TIP gear in a small village in the Philippines, and Jason Taylor, VP of infrastructure at Facebook, estimates that more networks will be tested later this year. Carriers will likely reap the benefits of having this level of modular design first, although the savings may not be as drastic as what happened in the data center because of the level of complexity that telecommunications infrastructure requires.
The equipment vendors that move quickly to reduce their costs and adapt to build products for the TIP will have an easier time than those who ignore it as a flash in the pan or something that won’t have much an impact. One question worth pondering is how far the TIP efforts will extend. When Facebook introduced the Open Compute Project, it was mostly adopted by the companies that operated giant data centers and those in the financial service industry. Server makers still could count on enterprise clientele to buy their fancier boxes at higher margins. But the telco equipment market has a much smaller group of buyers.
So it’s not clear if there will eventually be a bifurcation of buyers who will adopt the Facebook’s Telco Infra Project while others steer clear. Even those who don’t play along are likely to adopt the principles of modularity and flexibility through software-defined architectures and buying gear from companies that support true interoperability. That’s why vendors like Cisco and others have been leery about the threat of open source switches, Open Flow, and other elements that have been forcing the network world to open up and embrace interoperability between vendors and their gear.
With TIP, Facebook is basically creating a framework and consortium to ensure that interoperability happens without all of the FUD and games that typically happens in an industry that is long overdue for a change. The fact that Facebook has convinced Nokia and several carriers to get involved is a great first step and one that makes TIP worth watching. If I were Cisco, Ericsson, Huawei or Juniper, I’d be looking over my shoulder.
This article originally appeared on Fortune.com

Monday, February 22, 2016

Hillary Clinton’s campaign will head to South Carolina this week, hopeful that the tide of the Democratic presidential race has turned decisively in her favour - The Independent

After holding back the surge of Bernie Sanders at the Nevada caucuses, Hillary Clinton’s campaign will head to South Carolina this week, hopeful that the tide of the Democratic presidential race has turned decisively in her favour.
The former Secretary of State ground out a five-point victory over the Vermont Senator in Nevada, a far slimmer margin than was predicted several weeks ago, but sufficient to give her the momentum as the race turns towards the southern states. 
An electoral bellwether for the West, Nevada has a diverse population that more closely resembles the broader US than the largely rural, predominantly white Iowa and New Hampshire, which precede it in the presidential primary season. Ms Clinton can now be hopeful of a convincing win in the South Carolina primary on Saturday.
After a paper-thin win in Iowa and a crushing defeat to Mr Sanders in New Hampshire, the Clinton campaign had believed minority voters would provide a bulwark of support in the Silver State, where they had laboured to portray Ms Clinton as the candidate more committed to Latino voters’ issues. That strategy was partially successful at best, with an entrance poll suggesting Mr Sanders had in fact won 53 per cent of the Latino vote – a figure quickly disputed by Ms Clinton’s team.
The same poll, however, suggested Ms Clinton’s support among African-Americans remains staunch, accounting for three-quarters of Nevada’s black voters. That is seen as promising news ahead of Saturday’s primary in South Carolina, where she has a 20-point poll lead, and where the large black population has long been considered Clinton-friendly. The same is true of several southern states due to vote on Super Tuesday, 1 March, among them Texas, Georgia and Alabama.
In her victory speech in Las Vegas on Saturday, Ms Clinton reiterated her recent critique of Mr Sanders  as a single-issue candidate, focused only on new financial regulations for Wall Street. “The truth is, we aren’t a single-issue country,” she said. “We need more than a plan for the big banks.”
Yet the speech also demonstrated just how much Mr Sanders’ rhetoric has influenced his rival, drawing her further left on economic issues. “We all want to get secret unaccountable money out of politics,” Ms Clinton said. “That starts with appointing a new Justice to the Supreme Court who will protect the right of every citizen to vote, not every corporation to buy elections.”
In his concession statement, Mr Sanders pointed out how close he had come to overwhelming Ms Clinton in Nevada. “Five weeks ago we were 25 points behind and we ended up in a very close election,” he said. The impressive result was surely helped by his campaign spending: almost $35m (£24m) in January, $15m more than his opponent.
Leaving Nevada, Mr Sanders reassured his supporters that “the wind is at our backs”, but there was at least one troubling sign for his campaign’s longevity: his call for a “political revolution” relies on a record turnout, boosted by the young voters he has attracted to his cause. But a low 80,000 Nevadans participated in Saturday’s caucuses, more than 60 per cent of them aged 45 and over.