Consumer electronics giant Sony continues to have a rough time in its business, posting less than stellar Q3 2011 results. Sony losses for the quarter included a $1.2 billion operating loss, and a $2 billion net loss over the same period, while revenue was $23.37 billion.

Floods, forex, and feeble markets

The company partly blamed ‘the impact of the floods in Thailand, deterioration in market conditions in developed countries, and unfavorable foreign exchange rates’. They also cited tax issues that came up in the Sony Ericsson buyout as reasons for the big losses.

The real problems

Even then, though, Sony’s problems are significantly more pronounced than unavoidable real world conditions or fluctuating exchange rates. The problem is Sony is heavily exposed in too many struggling markets, and competing for attention in a marketplace where many consumers have their entertainment needs served elsewhere. Add to that that Sony Ericsson lost money, and both Sony Pictures and Sony Music managed miniscule profits.

The $23.37 billion Sony revenue represented a steep 17.4 percent year-on-year decline. Worse still, sales in Sony’s consumer products – that’s all the electronics you and I buy – was down 24 percent year-on-year. That’s colossal. Sony’s ailing TV business, slowed growth in its video game business, and struggling camera businesses are all to blame for this.

New beginnings

Kaz Hirai, Sony’s next CEO, will have his hands full trying to steer the monolith that is Sony. The company still has the engineering and design talent as well as consumer affection to be one of the most profitable consumer electronics businesses on the planet, but Sony has lost ground to Samsung and the likes of Apple in recent years.

The next earnings call will be watched carefully, and one hopes that Sony revenue stabilises, at the very least, and losses shrink, too.

The internet is abuzz about Facebook’s S1 filing – the first step for the company on its way to going public later this year. The company has filed to raise $5 billion when it is finally available for public ownership. At first glance, the numbers are very impressive and point to Facebook’s potential to one day justify the lofty $75 billion plus valuation the company will have when it goes public.

Healthy margins

The first key metric for the Facebook IPO filing is the company’s profit and revenue numbers. In 2011, the platform had profit of $1 billion on $3.7 billion revenue, for a healthy profit margin of 27 percent. 85 percent of that revenue came in the form of advertising and the remaining 15 percent came from the sale of virtual goods.

Notably, the company’s 2012 sales is nearly double the $1.97 billion revenue it had in 2010, showing that growth, at least at a monetary level, is still happening at a rapid rate.

Nearly 850 million users

The next key metric in the Facebook IPO filing is the number of users the platform has and how engaged they are. The S1 filing revealed that the social network has 845 million active monthly users. 57 percent of them log in to the service daily! In addition, nearly half of Facebook’s users use mobile devices to access the platform. The company noted that this large influx of mobile users – many of whom access the service exclusively from their handsets – is a big contributor for the rapid growth they’ve experienced in emerging markets like Brazil and India.

Billionaires and millionaires aplenty

When the Facebook IPO officially happens, many people associated with the company will become ‘overnight’ millionaires, while some, most notably founder and CEO Mark Zuckerberg, will become billionaires.

What is worth pointing out, though, is that the numbers behind Facebook show a company with fantastic fundamentals, steady profits, and sustained growth. That alone is reason to believe that $75-100 billion may actually be an accurate valuation of what the social network is worth.

Social network Facebook is finally readying its long awaited public offering. The latest reports suggest that the social network would release its initial prospectus on Wednesday, laying the groundwork for a May Facebook IPO led by Morgan Stanley that is expected to raise $5 billion.

Smaller IPO, more flexibility

The proposed amount to be raised is less than the $10 billion many previously thought Facebook would go for, with reports suggesting this is a deliberate move on the social network’s part that will give it the flexibility to increase its base at a later stage if it needs to.

The usual suspects

The New York Times reported that Morgan Stanley would lead the IPO, with JP Morgan nabbing second place and Goldman Sachs placing third. The Bank of America, Merrill Lynch and Barclays Capital round out the five institutions thought to be behind the share offering. Many expected Goldman Sachs to take second spot, yet reports that have recently surfaced hint at a fractured relationship. Evelyn M. Rusli of the New York Times writes: ‘The firm [GS], which led a $1.5 billion investment in the social network last January, was privately criticized by Facebook for allegedly botching the private placement, after word of the deal was reported by DealBook, people with knowledge of the matter have said.’

What’s at stake

Rumours regarding a Facebook IPO have been incessant for the better part of three years. Private trades of Facebook equity on secondary markets has valued the social network at more than $80 billion, and if the IPO is as successful as demand suggests it might be, several employees and investors will become overnight paper millionaires, while a handful of others will become overnight billionaires. Whether the social network is remotely worth that much at present is a hotly debated topic, yet with over 800 million highly engaged users on a platform still experimenting with various monetization avenues, there’s no telling what Facebook could be worth a short few years from now.

While the music and film industries have been up in arms for the better part of a decade about the harmful effects of piracy, Rovio CEO Mikael Hed views the illegal distribution of digital media as a way of exposing more people to a company’s – in this case, his company’s – brand.

Piracy as a marketing tool

Speaking at the Midem music conference held in Cannes every year, the CEO of the company best known for hit mobile game Angry Birds said [via The Telegraph]: “Piracy may not be a bad thing: it can get us more business at the end of the day.” He said that pursuing pirates is a fruitless activity for his company, and, as such, views piracy as a way for his brand to reach even more consumers.

Music industry, you’re doing it wrong

He explained to the attendees – mostly people in the music industry – that his firm learned how to approach the piracy issue by observing how the music industry mishandled it. Speaking honestly, he said: ‘We could learn a lot from the music industry, and the rather terrible ways the music industry has tried to combat piracy.’

Piracy is not limited to digital

His company, Rovio, which started out as a mobile games app developer and is slowly transforming into a media property built on Disney’s template, has experienced piracy in digital and physical products alike. Rovio CEO Mikael Hed said that: ‘We have some issues with piracy, not only in apps, but also especially in the consumer products. There [are] tons and tons of merchandise out there, especially in Asia, which [are] not officially licensed products.’

Easy for you to talk?

Many will see Rovio CEO Mikael Hed’s attitude towards piracy both informed and pragmatic. It’s not as if piracy will go away, and, at surface level, for people to want to steal your products is the equivalent of someone signaling that you make something worthwhile in the first place. There is something valuable in that, yes?

Yet, on the other side of the coin, one cannot help but feel Hed’s attitude to piracy is this positive because his bread is nicely buttered regardless, so to speak.  While Rovio, through Angry Birds, has benefited significantly from the recent years’ mobile application growth explosion, the music industry has been hemorrhaging money and shrinking in sales year-on-year for nearly a decade straight. This decline, unsurprisingly, has happened almost instep with the rise of platforms that make worldwide distribution of media files dead simple.

Coincidence much? Hardly. And, of course, this is not to say the music industry war on piracy has been at all intelligent. Context informs attitude, ultimately, and to say the mobile apps business and the music industry have contrasting realities would be an understatement.

Mike Lazaridis, along with his longtime partner Jim Balsillie, recently stepped down as co-CEOs of RIM, the makers of the BlackBerry. The decision came after a time of sustained shareholder pressure, decreasing market share, and formidable competition from Apple and Google both. In one of his first lengthy interviews since making way for Thorsten Heins to run Research In Motion, Lazaridis has called the decision ‘very hard’, though necessary.

Painful, but necessary decision

Speaking to Rose Simone of The Record, he admitted that ‘Stepping aside, as a founder, after 27 years, I would be lying if I said that wasn’t emotional for me, and for my whole family’. Even with that said, he felt very confident that Thorsten Heins, promoted from COO to CEO of RIM, would ‘take this company to new heights.’

How much actually changes?

Lazaridis remains a part of the company, though, as a member of the board of directors, as well as chairing RIM’s new innovation committee, but he will not be involved in how the company runs on a day-to-day basis. Still, given Thorsten Heins is considered a part of the former RIM co-CEOs inner circle, some think too little will actually change.

Mike Lazaridis implies a lot will change, not least of which is how he will spend his time from hereon. ‘Working so hard, with a 24-by-7 workload for so long, my biggest regret was not having enough time for my family. I need to correct that over the next few years. My kids have not gone to university yet, and so hopefully, I will correct that before they leave.’

Too little too late?

The Record’s lengthy interview with former RIM co-CEO Mike Lazaridis is a worthwile read for those who want to get to know a little about the man beyond his profile as co-founder of one of the biggest and earliest innovators in the smartphone industry.

It is, however, in the last bit – smartphone industry – where most readers’ interest lies. The big question, of course, is whether it is too late for RIM to stage a comeback under new CEO Thorsten Heins. So it is not left unsaid, under his leadership, the BlackBerry makers have an almighty task ahead of them if they are to claw back the control Apple, Google, Samsung, HTC and a few others have wrestled away from the company in the last two to three years.

Micro-blogging and communication platform Twitter has seemingly swayed to pressures from governments across the world with today’s revelation that the service can – and will – now start censoring tweets on a country-by-country basis.

Policing with policy

The Twitter censorship policy was revealed by the service, wherein it now holds the right to ‘reactively withhold content from users in specific countries.’ BoingBoing pulled out a key blurb in the new policy, which read: ‘We haven’t yet used this ability, but if and when we are required to withhold a Tweet in a specific country, we will attempt to let the user know, and we will clearly mark when the content has been withheld. As part of that transparency, we’ve expanded our partnership with Chilling Effects to share this new page, http://chillingeffects.org/twitter, which makes it easier to find notices related to Twitter’

What it means

For folks living in the UK and much of the western world, this new Twitter censorship policy is unlikely to be too big of a problem right away. Though in the US SOPA/PIPA continue to be ongoing discussions and the UK government half-heartedly blamed Twitter for the recent London riots, Internet censorship is not currently an issue.

For other nations, however, most notably China, and many of the nations central to last year’s ‘Arab Spring’, this is a significant change of policy. Considering Twitter was used as a platform for rallying government opposition, organising marches, and general communication during those uprisings, there is little but disappointment to see in this decision.

What now?

Unlike SOPA/PIPA, there’s nothing the man on the street can do to overturn the new Twitter censorship policy, short of no longer using the service. Considering the tens of millions of people that currently use Twitter, it would be a collective action nightmare to organise enough of a user exodus for the micro-blogging and communications platform to do a U-turn.

The highly anticipated Samsung Galaxy S III will be unveiled later than expected, after reports emerged that the Korean consumer electronics maker would not use Mobile World Congress 2012 to show off their device.

Reveal after MWC, release before ‘summer’

The news comes courtesy of The Verge, who cited indications from ‘people familiar with the matter’ that the unveiling of the latest release of the best-selling Android device in the world by some margin would only happen after MWC 2012 in February. The source did, however, explain that the originally planned summer release window (between June and August) remains in tact.

Why the delay?

While a reason for the delay has not been given, it’s believed that Samsung was unhappy with the long gap between the Samsung Galaxy S II’s unveiling at MWC, and its eventual release in North America. Given how massive North America is as a smartphone market and the fact that the Galaxy S II is the best selling Android handset in the region, whatever Samsung can do to accelerate sales of the S III will be prudent.

What we can expect

A report in TechRadar on Tuesday suggested that the Samsung Galaxy S III would launch in the UK as soon as April, with an impressive tech spec sheet to boot. The handset will reportedly have a 12-megapixel camera, and will run on Ice Cream Sandwich from day one (unlike many as-yet unreleased handsets that will get an ICS sandwich as an update after release).

The gravity of anticipation

Just as Samsung has managed to become the second biggest smartphone manufacturer in the world behind only Apple, the Samsung Galaxy S III and its predecessors have shaped up to become the second most anticipated smartphone releases each year. I’d like to think the S III is a big enough deal that it should get its own press conference, and that MWC 2012 may be too crowded as is.

Thoughts? We’ll see how Samsung plays it.

Apple Inc, the biggest technology company in the world by market capitilization, posted blowout Q1 2012 revenue figures. The company posted record revenue, record profit, record iPhone, record iPad and record Mac sales figures in a quarterly performance that topped even the guidance of the most optimistic analysts.

About that revenue and profit

Apple revenue for Q1 2012 totaled $44.63 billion (£28.61bn), up 73 percent year-on-year. Apple’s profit for the quarter was $13.06 billion (£8.37bn), up 118 percent year-on-year. For perspective, Apple’s quarterly profit exceeded Google’s revenue of $10.6 billion over the same period. Further perspective still, CNN reports that this is the second most profitable quarter of any corporation ever. For even more perspective, Apple’s cash hoard now sits at $97.6 billion (£62.55bn), which is greater than the market capitilisation of 474 Fortune 500 companies. Crazy.

iPhone momentum unprecedented

That growth, of course, comes from two key device categories – the iPhone primarily, and the iPad secondly. Apple iPhone sales topped 37.04 million units, representing year-on-year growth of 128 percent. The sales figures also meant Apple reclaimed its position as the number one smartphone vendor in the world, eclipsing Samsung’s 35 million unit sales over the same period.

For perspective on the ridiculous amount of momentum Apple iPhone sales have had since the device’s introduction in 2007, consider what Matt Richman writes: ‘In 2009, Apple sold more iPhones than it did in 2007 and 2008 combined. In 2010, Apple sold more iPhones than it did in 2007, 2008, and 2009 combined. Last year, Apple sold 93.1 million iPhones, slightly more than it did in 2007, 2008, 2009, and 2010 combined. The pattern continued.’

iPad and Mac extremely strong

Apple iPad sales totaled 15.43 million units in Q1 2012, representing year-on-year growth of 111 percent. Even though the PC industry is widely considered soft, with growth slowing to a crawl, the Mac has been, well, immune to that slowdown. Mac sales grew 26 percent year-on-year totaling 5.26 million units for the quarter.

Momentum

The mobile devices market is without doubt the most important competitive landscape in computing today and Apple, without doubt, is in the lead, in terms of unit sales per manufacturer, and in terms of revenue and profit. This is not to say that this will forever be the case, but the Cupertino giant is certainly sitting pretty at this point.

Early reports indicate that the Nokia Microsoft is paying dividends, with nearly half of all second-generation Windows Phone 7 handsets sold being by the Finnish handset manufacturer.

Unpacking the WP7 marketshare

The report comes courtesy of WMPoweruser, who used data gleaned from OccasionalGamer’s game collection. On Nokia, they write: ‘Even at this early stage the company already has 45 percent of the second generation handset market, with most of that being the Nokia Lumia 800 and some the more recently introduced Nokia Lumia 710.’ Next in line? HTC with 40 percent market share, but that is down quite drastically from the 55 percent market share the company had prior to Nokia’s arrival.’

How much is the base growing?

The fact that Nokia has managed to race to almost half of all sales of the second-generation handsets so quickly is notable, but there are a few important qualifiers to consider. If that growth is at the expense of other WP7 handset vendors, as opposed to growing the whole sales base of WP7 handsets, than this is not an ideal situation for the Nokia Microsoft partnership.

Why? Well, Microsoft wants to compete with Android and iOS, and for that to happen, the company’s mobile OS has to grow in volume. What each vendor has of a non- or slow-growing base of WP7 handsets is, for all intents, immaterial. Nokia, on the other hand, wants to compete with the likes of Apple, Samsung and HTC, and for that to happen, need consumer acceptance of Windows Phone 7 and overall sales of that mobile OS platform to explode.

What will follow?

Windows Phone 7 say that they ‘suspect if market acceptance for Windows Phone 7 increases it may be because it becomes strongly associated with Nokia, which may mean this percentage could easily increase to 60-70% or more,’ while some users comment that the market will grow because of Nokia, but other OEMs will become attracted to WP7 as a result. Whichever it is, the Nokia Microsoft partnership has very quickly become mission critical – as many suspected it would – if WP7 is to succeed in the long run.

Following a week of high drama where the future of the internet as we know it was hanging in the balance due to the controversial SOPA/PIPA anti-piracy bills in the US, Y Combinator has sent out a request for startups with a focus on the media industry and with the intent to ‘Kill Hollywood’.

Why Kill Hollywood?

Y Combinator, an incubator for web startups including mega-hits like Airbnb, Dropbox, and Heroku, issued its ninth request for startups, wherein it states that ‘SOPA brought it to our attention that Hollywood is dying’. The startup incubator says that Hollywood won’t fade quietly like other declining industries do, because ‘The people who run it are so mean and so politically connected that they could do a lot of damage to civil liberties and the world economy on the way down.’

The challenge

When asking the how and what part of the killing of Hollywood, Y Combinator says ‘What’s going to kill movies and TV is what’s already killing them: better ways to entertain people,’ and not filesharing, as Hollywood, SOPA, and PIPA seem to suggest. The incubator continues, saying: ‘So the best way to approach this problem is to ask yourself: what are people going to do for fun in 20 years instead of what they do now?’

Parting thoughts

Y Combinator’s call to ouster Hollywood from its perch comes at a time when the film industry is facing ever-mounting challenges from other forms of entertainment competing for people’s time, as well as independent programming often times that of Hollywood quality being increasingly easier to access due largely to the internet. This request for startups to ‘Kill Hollywood’ would only serve to make the distribution and content creation platforms designed to compete with Hollywood only more numerous, and more effective, too.

Where SOPA/PIPA were seen as a way to protect Hollywood, they’ve only served as a rallying call to upend it, at least for a small sliver of highly influential entrepreneurs.