SILICONEER | INFOTECH INDIA: Tech News Briefs | FEBRUARY 2009

!-- Start Alexa Certify Javascript --> !-- Start Alexa Certify Javascript --> !-- Start Alexa Certify Javascript --> SILICONEER | INFOTECH INDIA: Tech News Briefs | FEBRUARY 2009 | Celebrating 10 Years

A General Interest Monthly Magazine for South Asians in the U.S.

Current Issue

Mobile

Past eMags

eMagazine

Videos

Advertisers

Media Kit

Archives

ADVERTISEMENTS

PREMIUM

CLASSIFIEDS

MULTIMEDIA VIDEO

SEBI to Weigh L&T’s Plan to Acquire Satyam

Indian market regulator SEBI is likely to consider Larsen & Toubro’s proposal on the pricing of a possible open offer to Satyam shareholders at its board meeting Feb. 2, the Economic Times reports.

The board will consider whether the current pricing rule based on a 26-week average price formula should be relaxed specifically for enabling an acquirer to take control of Satyam Computer Services, according to a person familiar with the development.

The regulator is debating this issue internally, following requests from several potential bidders, including L&T, which has already submitted a formal proposal to SEBI seeking a relaxation in the pricing norm spelt out in the takeover code.

If the 26-week pricing formula is applied, any bidder for the company would have to offer a minimum price of over Rs. 270 per share, while the current market price is only a fraction of that. Satyam shares recently closed at Rs 55 on the Bombay Stock Exchange.

L&T, which has raised its stake in Satyam to over 12 percent, has offered to pay Rs 50 a share.

According to a senior SEBI official, since a few firms have requested SEBI to relax the pricing norm, the matter may be up for board discussion. For the regulator, it’s a dicey call since an exemption could set a precedent. “While SEBI has the power to make changes in the takeover code, any exemption will have to be justified. This is an exceptional situation and an exemption could serve a wider public interest,” said a securities lawyer.

A view that is gaining ground, if the rules are eased, it could act as an incentive for several bidders, who are seeking to acquire the company at a fair value. If multiple bidders emerge, it would then ensure that the interest of investors is protected to some extent, as a proper price discovery can be carried out through competitive bidding process.

|TOP|

Global Meltdown Hits Indian Semiconductors

The global slowdown will cut the growth rate of the Indian semiconductor market in half in two years, a report said recently in Bangalore.

According to the Indian Semiconductor Association-Frost & Sullivan report update 2008-10, the total revenues of the Indian semiconductor market are poised to grow from $5.9 billion in 2008 to $7.59 billion in 2010 at a compounded annual growth rate of 13.4 percent.

The decline in CAGR, from 26.7 percent in the earlier report of 2007, to 13.4 percent in the current report, is on account of revised investment and manufacturing scenario seen in the second half of 2008.

There has also been a decline in the average selling price for various semiconductor components ranging from three percent to 10 percent depending on the final product and the semiconductor content. The overall global slowdown had also not been anticipated during the previous report of 2007.

“The current slowdown will impact manufacturing investment prospects. A low manufacturing index for electronic products leads to higher imports and thus lowers the local potential for semiconductors, their key component,” ISA president Poornima Shenoy told reporters here.

According to the report, the total available market for semiconductors in India is anticipated to climb from $2.53 billion in 2008 to $3.24 billion in 2010 with a CAGR of 13.1 percent.

|TOP|

TCS May Call Back 20 percent Onsite Staff in U.S.

TCS, India’s largest software company, is planning to move about a fifth of its employees working onsite at various locations in the U.S. to India as a general slowdown and reduced client requirements have decreased the need for a large workforce in the U.S, reports the Economic Times. According to a person familiar with the development, a communication was sent recently to various middle and senior-level management personnel, informing them about the proposal to shift people back to India, following a sharp fall in client requirements.

However, a TCS spokesperson, when contacted, strongly denied that 20 percent of the staff in the U.S. was being moved back to

India

. “In the current environment, moving work to offshore locations (to India) is the focus for the company and its customers, as this helps optimize costs and increase operational efficiencies for both TCS and its customers,” he said, adding that less than five percent of TCS total U.S. staff strength have come back to India in Dec. 31, 2008.

The Tata Group company employs close to 14,000 employees in the

U.S.

, who services many blue chip clients in the banking and financial services, auto and other manufacturing sectors.

Typically, most of the client requirements include a combination of what is called ready-to-serve work and enhancement work or value-addition. Since the slowdown in the U.S., most clients have completely stopped the enhancement work and hence require lesser number of people for delivering solutions onsite.

|TOP|

Infosys Confident

Infosys Technologies is confident it can meet its fourth-quarter revenue target, chief operating officer S.D. Shibulal said.

“Given where we are today, we are confident that we can meet Q4 guidance,” Shibulal said at the World Economic Forum in Davos, Switzerland.

Infosys said in early January that it expected to pull in revenue of $1.13 billion to $1.17 billion for the March quarter.

Also on Tuesday, Shibulal said the Indian technology company does not expect it will need to tap the capital markets.

|TOP|

MICROSOFT: CRM Solution

Microsoft

India

has launched its customer relationship management software to help businesses optimize costs and streamline processes amid the current economic scenario.

Microsoft Dynamics CRM 4.0 is a value-driven customer relationship management solution that delivers the ability for organizations to optimize productivity, profitability, infrastructure and their budgets, the company said in a statement.

“With customer service and loyalty becoming increasingly critical to business success, our CRM solution assists organizations place their customers at the centre of all their business activities,” Microsoft

India

director (business solutions) Sushant Dwivedy said.

In India, the insurance sector is driving the adoption of CRM followed closely by the IT/ITeS segment, it added.

According to a Forrester Research study, the CRM software and services market is expected to grow from about $8.4 billion in 2006 to $10.9 billion in 2010, with much of the growth coming from the mid-market firms.

|TOP|

INTEL: $23M Investment

Intel Capital, chipmaker Intel’s global investment arm, has announced an investment of $23 million in three Indian companies — One97 Communications, IndiaMART.com and Global Talent Track.

With these investments, the organization has spent nearly $100 million of its $250-million Intel Capital India Technology Fund set up in December 2005.

Intel Capital is looking at four areas for investments — WiMAX and mobility, clean tech and renewable energy, consumer Internet and education, its India, Japan, Australasia and South East Asia managing director Sudheer Kuppam said.

While the investment arm did not disclose individual investment figures, it’s learnt that about $9-10 million has been invested in IndiaMART.com, an online business-to-business marketplace for apparel, chemicals and electronics. The company said it will use the fresh fund infusion for new branding and marketing initiatives.

Global Talent Track, in which Intel Capital has invested along with Helion Ventures, is a start-up. The new investments will help the vocational education firm set up its training centers across the country. Its first centre will come up at Pune in March this year.

Telecom solutions provider One97 Communications has received about $15 million from Intel Capital and Silicon Valley Bank. The value-added services provider will invest another $15 million from internal accruals to fund its R&D lab for third generation — 3G — wireless network.

Intel Capital has invested in about 60 Indian companies since 1998. The organization makes investments at various stages of a company in return for a minority stake.

Intel Capital also gets to nominate an independent board director and appoint its own executive as a board observer. It also helps companies in customer acquisition by providing them its own channel partners and arranging interactions with customers.

|TOP|

MOSER BAER: Solar Cells

Moser Baer has announced that its photovoltaic subsidiary is ready for production of thin film photovoltaic modules at its manufacturing plant in Greater Noida.

This follows final acceptance test certification of Moser Baer Photovoltaic’s SunFab Thin Film Line supplied by Applied Materials, Inc, the California-based nanomanufacturing technology solutions provider.

The 40MW capacity line is the largest thin film solar line in

India

. Moser Baer claims that the single junction SunFab line has demonstrated the highest production capacity to date for manufacturing the world’s largest (2.2m x 2.6m) solar modules.

Commenting on the development, Deepak Puri, chairman and managing director of Moser Baer, said: “Moser Baer is pursuing a differentiated strategy in the high growth photovoltaic business and launching production of the SunFab thin film solar module line is of great significance in our effort to bring the solar energy dream to fruition. The thin film line will help us significantly scale up our manufacturing capacity and supply thin film solar modules to our customers.”

Mike Splinter, Applied Materials’ CEO, said: “We are very pleased to have achieved this key customer sign-off for our thin film production line, the first SunFab line in India.”

The Applied SunFab Thin Film Line is a fully-integrated PV module production line that delivers leading-edge solar manufacturing capability using advanced engineering, process equipment, automation and other key supporting technologies.

“This important collaboration established the first advanced thin film solar facility in

India

that builds on Applied’s proven technology from the semiconductor and LCD industries,” said Dr. Rajiv Arya, CEO, Moser Baer Photovoltaic.

|TOP|

NOKIA: Take-back Campaign

Nokia India has launched its “take-back” campaign from Jan. 1 The take-back campaign is aimed at educating mobile phone users on the importance of recycling eWaste and will be rolled out in phases across the country. As a part of this initiative, Nokia encourages mobile phone users to dispose their used handsets and accessories such as charges and handsets, regardless of the brand, at any of the recycling bins set up across Nokia Priority Dealers and Nokia Care Centers.

A Nokia survey across 13 countries has showed that only a mere 17 percent of the cellular users in

India

were aware that the handset could be recycled. The awareness quotient was the lowest in India. “The company will be planting a tree for every handset dropped into these recycling bins and giving out a surprise gift as well,” Nokia said in a statement.

The highlight of the survey was that despite the fact that people on average have each owned around five phones, very few of these are being recycled once they are no longer used. Only three percent said they had recycled their old phone. Instead, the majority — 44 percent — are simply being kept at homes never used. Others are giving their mobiles another life in different ways passing on their old phones to friends or family or selling their used devices. Globally, half of those surveyed didn’t know phones could be recycled like this, with awareness lowest in India at 17 percent and Indonesia at 29 percent , and highest in the U.K. at 80 percent and 66 percent in Finland and

Sweden

.

“The take-back campaign aims to increase awareness of the concept of recycling. If people no longer need their mobile devices, they can bring it back to Nokia for recycling and it can put it to good use — 100 percent of the materials in the phones can be recovered and used to make new products or generate energy,” the company statement added.

According to D. Shivakumar, managing director, Nokia India, “Nokia is a responsible brand and company. We want to contribute positively in every associated community and the issues that concern the community. Ecology is one of the biggest concerns and as an industry leader, Nokia has designed

India

’s first Take-Back program for mobile handsets. This program covers not just Nokia handsets but is open to all mobile phones. That is Nokia’s unique contribution.”

|TOP|

Sluggish Growth

India saw a mere 1.7 percent growth in PC shipments in the July-September quarter, on the back of a nearly 9 percent drop in desktop PC shipments, according to data compiled by research firm IDC. Notebook shipments increased 37.8 percent to constitute nearly a third of total PC shipments of 2.26 million units during the period.

During the quarter, desktop PC shipments fell 8.9 percent to 1.56 million units. . Notebook PC or laptop shipments grew 37.8 percent during the third quarter to 0.7 million units.

While PC shipments to large companies fell 13 percent year-on-year, the home segment recorded an increase of 16 percent . The small and medium businesses segment also registered a 3 percent growth in Q3 2008.

“The current subdued buying sentiment has led to inventory pile-up with channel partners, adversely impacting finances. Vendors must re-discover niche segments with buying potential and implement innovative marketing programs to overcome this situation,” IDC India PC research lead analyst Sumanta Mukherjee said.

In the overall PC market, Hewlett-Packard (HP) had the highest market share of 19.7 percent in the third quarter. HCL Infosystems (9.8 percent ) was second, followed by Dell (9.6 percent).

In the desktop PC shipments too, HP continued to lead the market in Q3, followed by HCL and Acer in second and third spots respectively. HP, Dell and Acer were the top three players in laptop shipments.

For the nine-month period ended September 2008, the overall PC shipments grew 6.4 percent year-on-year to touch 6.43 million PCs. Laptop shipments grew 54.5 percent to touch 1.87 million, while desktop PC shipments fell 5.7 percent to 4.56 million units.

|TOP|

Sales Drop

Sales of computers in the Asia Pacific region outside Japan fell for the first time in a decade during the fourth quarter, as the global meltdown hit consumer spending, a study said.

Preliminary figures showed 17.2 million desktop computers and laptops were sold in the December quarter, down 14 percent from the previous quarter and 5 percent lower than a year ago, global market intelligence firm IDC said.

The figures marked the first year-on-year decline since the third quarter of 1998 when the region was grappling with the Asian financial crisis, it added.

“This quarter was quite a jaw-dropper” not just in China but also in

India

, said Bryan Ma, regional director for personal systems research with IDC.

“The clouds are darkening in 2009, although there might be some pockets of shelter in the region’s public sector.”

For 2008, struggling Chinese computer giant Lenovo was the region’s number one vendor with market share of 18.3 percent, followed by U.S. rival Hewlett Packard which had 14.1 percent, and Dell at 9.1 percent, IDC said.

Taiwanese computer firm Acer was fourth with market share of 7.5 percent and

China

’s Founder ranked fifth, with 4.0 percent.

|TOP|

3G Spectrum

Successful bidders for spectrum allocation for third generation — 3G — telecom services will also be eligible to get spectrum space for second generation — 2G — services, as and when any space becomes available, the Telecom Commission said here.

‘New 2G spectrum will be allocated as and when it is available. Currently 2G is saturated and we hardly have any spectrum available, so successful 3G bidders will have to wait in queue to avail of 2G spectrum,’ said R. Ashok, member, finance, Telecom Commission, on the eve of bidding for 3G spectrum.

The member’s statement helped dispel rumors that 3G operators would only be allowed to function in the 3G domain.

According to Department of Telecom officials who requested anonymity, Chennai and Tamil Nadu that were earlier two separate circles, will now be considered as one circle and license-holders for each will now be able to bid for the new combined circle.

|TOP|

HCL: $1B in Q3

For HCL Technologies, the December 2008 quarter has proved to be the best in terms of deals it has signed. The company said it won deals worth $1 billion during the three-month period, nearly double its average quarterly revenue. It is also transitioning contracts from other vendors for free, according to analysts who attended its quarterly earnings call presentation.

“Typically, the new order inflow is 10-20% higher than its quarterly revenue. In HCL's case, the $1 billion worth of new orders are approximately double its quarterly revenue of $500 million,” said Apurva Shah, head of research, Prabhudas Lilladher. The Nokia win announced on Thursday is also part of this $1 billion.

“In the normal course, the IT vendor does not pay for contracts that are transitioned. My understanding is that some of the contracts that HCL has won are through this route and some others were a case of free transitioning,” said an analyst with a foreign brokerage, who was on the call. One of the contracts has moved from multinational EDS, he added.

In its December 2008 earnings call, CEO Vineet Nayar said that there was cost for knowledge capture and cost for moving onsite work offshore or moving work from the existing vendor employees to its employees. Rather than have the client pay for the transition, the company would build into its pricing and recover the cost over the period of the contract.

“No, there was no announcement of free transitioning for clients. It is primarily billed to the customer and recovered over a period of the contract,” HCL Tech said in response to a mail from ET.

Transitions can take many months and be fairly complex, especially if the project being moved is large. “Many times it is also done in a hostile environment because the vendor, who is losing business, does not necessarily want to co-operate. HCL has formed a special team for this - not necessarily to tap contracts from Satyam clients - but for opportunities arising from vendor consolidation,” said another analyst.

|TOP|

SATYAM: Job Aspirants Protest

Tired of the wait, a group of 300 aspirants who were given offer letters months ago by the company gathered before Satyam Infocity’s office in Hi-Tec City and demanded that they be allowed to join immediately.

Holding posters asking their prospective employer to break their silence on the job issue, Satyam’s ad hoc recruits filled in the lawn opposite the office, blocking traffic and movement of employees from the premises. They started gathering even before the official work hour.

The crowd which comprised of less than 20 students in the morning, swelled to 150 in an hour and in the afternoon reached 300. Though not violent with slogans, the aspirants made their presence felt by their assertive silence.

Many ad hoc recruits are wary of their plight amid a recession, but still want to join the scam-hit company. “When I got the offer letter from the company, I was thrilled and never felt the need to opt for any other job. I am sure the company will do better eventually. I would like to be a part of it,” said Devendra Singh, a job aspirant who came from Bangalore to take part in the protest. He was given the offer letter by Satyam way back in December 2007.

|TOP|

EMAIL US: info (at) siliconeer.com | SHARE YOUR THOUGHTS ONLINE BELOW

Click here to read in the CURRENT ISSUE in PDF format

COVER STORY
Cultural Terrorism:
The Growing Threat of Intolerance
India, and for that matter the whole world, appears to be drifting towards bigotry and intolerance, laments poet and folklorist Ved Prakash Vatuk.

SUBCONTINENT
Hunt for Energy:
China Edges India
India and China are both eager for economic growth and India’s giant neighbor seems to have an edge in the hunt for energy, writes Siddharth Srivastava.

MIDDLE EAST
Tragedy in Gaza:
Israel’s Indefensible War
To understand Israel’s unconscionable behavior in Gaza, you have to understand its history, writes historian Avi Shlaim.

ENTERTAINMENT
IIFA Awards 2008
A Siliconeer Exclusive Photo Essay

OTHER STORIES
EDITORIAL: Culture and Intolerance
NEWS DIARY: January
COMMUNITY SERVICE: Running for Assembly
SUBCONTINENT: Outsourcing Babies
COMMUNITY: Indian Republic Day in SF
SPORTS: Howzzat!! CricketTicket
TRAVEL: Europe on a Budget
BOLLYWOOD: Forty-plus Hunks: Bollywood Kings
AUTO REVIEW: 2009 Ford Flex
BOLLYWOOD: Chandni Chowk to China
BOLLYWOOD: Guftugu
RECIPE: Tutti Frutti Sandesh
TAMIL CINEMA: Villu
COMMUNITY: News in Brief
INFOTECH INDIA: Tech Briefs
HOROSCOPE: February

Current Issue

Mobile

Past eMags

eMagazine

Videos

Advertisers

Media Kit

Archives