Posted by: Jennifer Schenker on May 6, 2010
Global videogame giant Electronic Arts has made lots of acquisitions—especially in the mobile arena—but how does it make the deals work? "M&A; is a challenging, risky activity," admits Barry Cottle, senior vice-president and general manager of EA Interactive, the division of Electronic Arts that includes Playfish, a London-based social gaming company acquired last year, as well as EA Mobile and Pogo. EA doesn't pretend to have all of the answers, but its executives agreed to talk to Informilo about how the gaming company integrates startups once it acquires them—an issue of interest to multinationals in all sectors.
"The gaming space moves fast, market segments and different types of genres pop up, so we not only have to use internal efforts to try and innovate but also look at outside companies that are attacking those places, and, when it makes sense, to acquire them and bring them into the organization," says Cottle. "What is key is you have to get an agreement on the objectives and the measurements, but not dictate the culture on how to get there."
Plans for Playfish, the fourth European games studio acquired by EA since 2004, include allowing it to stay in London and to retain its culture. The hope is that Playfish will help EA create more hits in social gaming, an area that is expected to help significantly expand the gaming market by attracting a broader audience.
Giving acquired game studios a degree of autonomy is a formula that has worked well for EA, helping it launch new blockbuster games, retain the management of start-ups it acquires, and infuse its top management with young talent.
Take the case of Digital Illusions Creative Entertainment (DICE), a Swedish game studio specializing in first-person shooter games, which was purchased by EA in 2006. Swedish computer scientist Patrick Soderlund, DICE's chief executive officer at the time of the acquisition, not only stayed on—along with most of the team—but has risen in the ranks at EA.
Continue reading "How EA Integrates European Game Startups"
Posted by: Andy Reinhardt on April 30, 2010
The numbers are out from market research houses, and the biggest winners for the first quarter of 2010 in smartphones were Apple and Nokia. Both companies saw their sales surge from the same period in 2009, and both gained market share, according to figures released Apr. 30 by Boston-based researcher Strategy Analytics.
The telecom research firm figures the global market for smartphones—handsets that support wireless e-mail, Internet access, downloadable apps, and often touchscreen- or stylus-based user interfaces—grew by a sprightly 50% vs. the first quarter of 2009, to 53.7 million units. That amounts to about 18% of overall handset unit sales, up from just under 15% a year earlier. Apple's sales grew a dazzling 132%, to 8.8 million units, while Nokia's grew an impressive 57%, to 21.5 million units.
Canada's Research In Motion was no slouch, either: The BlackBerry-maker shipped 10.6 million units in the quarter, up 45% from a year earlier, giving it the No. 2 position overall in the category, according to Strategy Analytics. But RIM's market share in smartphones slipped slightly to 19.7%. Finland's Nokia commanded 40% of the market—up from 38.2% in the first quarter of 2009—and California-based Apple walked away with 16.4% share, vs. 10.6% a year earlier.
Of course, smartphones are still a relatively small (if profitable) part of the overall mobile phone market, where Nokia and the Korean giants Samsung and LG Electronics continue to dominate. Figures released Apr. 30 by researcher IDC show that the global market for all kinds of handsets, which run the gamut from high-priced devices with video and GPS navigation to lowly voice-and-texting models, surged a healthy 21.7% in the quarter, to 242.2 million units, vs. the same period in 2009.
IDC cautions that this isn't a sustainable growth rate, given that last year's first quarter—amid the depths of the global economic downturn—was one of the worst on record. Overall, IDC expects mobile phone shipments this year to climb by about 11% vs. 2009. But in an encouraging sign for mobile operators who have invested billions in building out third-generation (3G) networks that support faster wireless data connections, ABI Research said on Apr. 30 that for the first time in history sales of 3G-compatible phones in the first quarter of 2010 eclipsed those of earlier-generation (2G) devices.
Continue reading "Apple and Nokia Gain in Smartphone Sales"
Posted by: Jennifer Schenker on April 26, 2010
Venture capitalists are descending on the U.K. and Ireland this week to meet the cream of technology upstarts. They'll be introduced to companies such as Belfast's Lagan Technologies, a supplier of software for improving delivery of public services that has become a world leader in its market niche, beating rivals like Oracle for contracts with American cities from San Francisco to Boston.
Lagan is one of 30 companies pitching themselves to a group of more than 60 venture capitalists during the U.K. & Ireland Tech Tour on April 27-28. Many of the presenters are, like Lagan, later-stage companies that have already carved out successful global businesses. A surprising one-third of them are located on the Emerald Isle.
This week's tour of the U.K. and Ireland is the 42nd such outing put on by the Geneva-based European Tech Tour Association, an independent non-profit organization that has been discovering and promoting early- and later-stage tech startups for more than a decade. It last held tours of England in 2004 and 2007, Scotland in 2001 and 2006, and the Republic of Ireland in 1999 and 2004.
What sets this tour apart from earlier trips is how many of the companies have already established themselves as world leaders in their fields, says Victor Basta, a veteran investment banker and president of the European Tech Tour Association. Basta is a former partner with London-based boutique investment firm Arma Partners, and now serves as an advisor to Magister Artis Capital, a London-based firm that provides merchant banking services for later stage companies and investors in growth industries.
The other major difference this time around is the number of Irish companies. Lagan is based in Northern Ireland, and another 10 of the startups that made the tour selection committee's final cut are from the Republic of Ireland. That's a disproportionately large number, considering that Ireland has a population of just 4.5 million, compared with 62 million in the U.K, says Basta. "What this shows is that multiple years of government focus on technology in Ireland, tie-ins with universities, an entrepreneurial spirit, and a local ecosystem of advisers and investors has created an ecosystem to rival [that of] Cambridge," says Basta.
Continue reading "Irish Startups Shine in Venture Tech Tour"
Posted by: Andy Reinhardt on April 23, 2010
Like a one-two punch, the two Nordic giants of telecom equipment reported results on Apr. 22 and 23 that fell short of analyst estimates. Nokia's first quarter revenues announced on Apr. 22 grew 3% from the same period a year earlier, to €9.5 billion ($12.7 billion), and net income nearly tripled from 2009's tough first quarter, to €349 million ($466 million). But the earnings were about €61 million shy of analyst estimates, and Nokia's shares plunged 13.3% on Apr. 22 and another 2% on Apr. 23. It wasn't so much the profit miss that spooked investors but falling average selling prices for phones, flat market share, and a slightly lowered forecast for operating margins this year.
Ericsson's results announced Apr. 23 were in many ways worse. Revenue dropped 9% from the same quarter in 2009, to 45.1 billion Swedish kroner ($6.28 billion), about 3 billion kroner ($418 million) short of analyst predictions. Net income fell 27%, to 1.26 billion kroner ($174 million), nearly 38% ($103 million) below analyst estimates. The company blamed tepid operator investment in network equipment and continued sharp price competition from rivals. Yet Ericsson shares soared 10.3% on Apr. 23, largely because its results included a near-doubling in North American sales.
Is there an illness at the heart of Nordic telecom? No question, the first quarter was a comedown from the results posted by both Nokia and Ericsson in the final quarter of 2009. But aside from that, the companies are facing quite different situations. While the reaction from investors in both cases may have been overdone, the basic direction of movement reflects diverging realities.
Nokia, whose shares have fallen 1.4% this year against a backdrop of generally rising telecom stocks, can't seem to catch a break these days. Long the leader in mobile handsets, and still hanging on to one-third of the overall market, Nokia has been sent reeling by the success of the Apple iPhone. Sure, Nokia sold 21.5 million "converged mobile devices," or smartphones and mobile computers, in the first quarter, up 57% from a year earlier. Apple, by comparison, sold just 8.75 million iPhones. But Apple snagged an average of $622 in product and service revenue for each iPhone, whereas Nokia's devices sold for an average price of $207 (€155). Translation: Apple made 22% more revenue on 60% fewer units—and its profit margins were even more dominant.
Continue reading "Nokia and Ericsson: A Tale of Two Telcos"
Posted by: Jennifer Schenker on April 19, 2010
Staid bankers are embracing the latest collaborative tools to drive innovation. The Society for Worldwide Interbank Financial Telecommunications (SWIFT), a global organization that handles an average of 15 million standardized financial transactions such as wire transfers every day for more than 8,000 banks, is spearheading a drive to "inject an innovation culture not only at SWIFT but the financial community as a whole," by collaborating on new e-banking solutions and working more closely with start-ups, says Kosta Peric, head of innovation at SWIFT.
Since 1973, Brussels-based SWIFT has provided a shared worldwide data processing and communication link for the world's banks, using a common language for international financial transactions. Its main function is to be a carrier of messages. It does not hold funds, manage accounts on behalf of customers, or store financial information on an ongoing basis. That said, SWIFT is increasingly taking on the role of a catalyst to bring the financial community together to work collaboratively on market practice, standards, and issues of mutual interest.
With that goal in mind, Peric is behind an online marketplace called Innotribe that went live on Feb. 11 and aims to leverage the collective creativity of the finance sector. The idea is not only to deliver on the traditional mission of lowering costs, reducing operational risk, and eliminating inefficiencies, but also to get creative about taking the sector into entirely new directions.
Innotribe is clearly not your father's banking communications platform. Bankers who wish to submit their ideas for new products, services, or business processes (or enhancements to existing ones) can do so by signing in with a Facebook, Google, or Twitter account. They are greeted with the message "Remember, everyone is an innovator; and a crazy idea that works is not so crazy at all. Share with us your ideas, be they matter of fact or wildly aspirational."
Continue reading "SWIFT Bank Network Taps Crowdsourcing"
