In Apple-Google maps war, consumers lose

9/22/2012

Cutthroat competition is supposed to be good for consumers, but the battle between Apple Inc. and Google Inc. over maps shows that’s not always the case.

On the iPhone 5, which went on sale Friday, the popular Google Maps app was replaced with Apple’s own maps software. The change was widely panned by consumers, who complain that Apple AAPL +0.20%   stuck them with something inferior in an effort to hurt one of its biggest competitors. Apple conceded Friday that the new map software is still a work in progress, and said it would get better with time.


Apple Maps on iPhone 5
Retail and tech experts say Apple’s move is aimed at displacing Google GOOG +0.81%  , which has long dominated the maps-app market, which accounts for an estimated $625 million in annual sales, according to Opus Research. While such rivalries often lead to better products, they say the rush by tech companies to register patents on the most basic of smartphones and their features, including map apps, is having the opposite effect. Apple’s goal here is to maintain control of its own suite of products — or “ecosystem” — to increase its share of the mobile-phone market, according to Scott Sutherland, analyst at Wedbush Securities.

By building its own map software from scratch, Apple lost its way, say a slew of tech reviewers, calling the app one of the biggest drawbacks of the iPhone 5. The software is not nearly as robust as Google’s, which was developed and improved upon over nearly a decade, experts say. The early consensus is that the app is buggy, displays distorted images and provides confusing search results. Apple’s version also lacks Google’s popular “Street View” feature and does not provide directions over mass transit.

Click to Play
Criticism over iPhone 5’s maps
Amid the controversy surrounding Apple dumping Google Maps, Ian Sherr spells out Apple's efforts to match the detail of Google Maps and how iPhone users can still use Google Maps on their smartphones.

Maps are not the only area where consumers may end up in the crossfire between Apple and its competitors. In a $1 billion settlement last month, Samsung was found to have infringed on six Apple patents — some for what appear to be very simple features like the way apps are laid out or how users zoom in on pictures. Such decisions could mean that consumers only have access to a handful of proprietary features, insiders say. “In the short run, consumers are clearly the losers from the current wars over intellectual property,” says David B. Yoffie, Max and Doris Starr Professor of International Business Administration at Harvard University.

Competition tends to be bad for consumers when it creates more high-tech products that are incompatible with each other, experts say. For instance, Apple’s iCloud works exclusively with Apple products, while Google’s Cloud works with any device using Google’s operating system — customers get locked into one or the other, says Ben Bederson, a professor of computer science at the University of Maryland.

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Another problem, say tech pros, is that the rush by tech firms to find a one-size-fits-all approach to wildly different smartphones often results in “worse software,” adds Bederson.

Apple did not respond to requests for comment. Google says the company’s goal is to make Google Maps available to everyone, “regardless of device, browser or operating system.”

Smartphone users may eventually win out, say some experts, with Apple and Google licensing each other’s software to make their best features available across several platforms. “In the history of the technology business, it has been common for intense wars over patents to be followed by broad cross-licensing,” Yoffie says.

Apple will likely fine-tune its maps app over the coming months, says Damien Geradin, a competition law partner at Covington & Brussels, a Washington, D.C.-based law firm. Apple dropping Google Maps may be bad for users in the short term, but it will be beneficial over the longer term. “We don’t want to be left with only one type of way to find directions: Google Maps.”

USD - Dollar Benefits from Risk Aversion

The US dollar was able to take advantage of risk aversion in the marketplace following a series of disappointing indicators out of China and the euro-zone, which led to gains against several of its main currency rivals. The AUD/USD tumbled close to 100 pips during Asian trading, eventually reaching as low as 1.0366. Despite a slight upward correction later in the day, the pair was once again bearish by the evening session. Against the Swiss franc, the greenback gained more than 90 pips during the first half of the day, and by the end of the European session was trading at the 0.9350 level. 

Turning to today, traders will want to pay attention to announcements out of the euro-zone, particularly with regards to the current situation in Spain. It is widely expected that the Spanish government will soon request a bailout from the ECB. Any signs today that the request may come soon could lead to significant volatility before markets close for the weekend. If the situation in Spain turns out to be worse than originally thought, the dollar could extend its upward trend vs. its riskier currency rivals. 

EMI-Universal deal cleared by EU and US regulators

EU and US regulators have approved the takeover of UK music firm EMI by Universal Music, but it must sell some of the firm's most valuable labels.

The European Commission said Universal would have to sell off assets including the Parlophone label, home to artists such as Pink Floyd and Kylie Minogue.

The US Federal Trade Commission later approved the deal in its turn without imposing any conditions.

The ?1.2bn ($1.9bn) takeover of EMI was announced in November.

Although the European Commission said its ruling would allay competition fears, rival music labels have condemned the move.

EMI, with a history dating back to 1897, is home to artists including the Beatles and Pink Floyd. Universal is a unit of French media giant Vivendi.

Continue reading the main story
Analysis

Robert Plummer
Business reporter, BBC News
In EMI's 1960s heyday, it was one of four music companies that dominated the British charts. The others were Decca, Philips and Pye.

One by one, the others fell by the wayside, swallowed up by what is now Universal Music Group (UMG).

Now, with all remaining obstacles to the deal cleared, EMI's recorded music division looks set to follow suit, putting the last big UK record company into French hands.

However, the scale of the sell-off required by the European Commission is impressive.

It includes the catalogue of one of those proud 1960s labels, Pye - now part of Sanctuary, which Universal bought in 2007 and must now hive off again.

With other labels such as Mute also on the list, music by artists from the Kinks to Depeche Mode will now be changing hands.

The Commission's demand for assets sales also includes disposal of EMI's Chrysalis, Mute, and Classics labels, as well as Universal's Sanctuary and Co-op Music labels.

"The very significant commitments proposed by Universal will ensure that competition in the music industry is preserved and that European consumers continue to enjoy all its benefits," EU competition commissioner Joaquin Almunia said in a statement.

'Preserve choice'
He said a combined group would have a market share with the European Union of less than 40%, the threshold which typically prompts regulators worry about market dominance.

Mr Almunia said: "Competition in the music business is crucial to preserve choice, cultural diversity and innovation.

"In this investigation, we have paid close attention to digital innovation, which is changing the way that people listen to music."

Citigroup is selling EMI, having bought it when buyout firm Terra Firma defaulted on loans owed to the US investment bank. Regulators have already allowed a group led by Sony to buy EMI's music publishing arm for $2.2bn.

Universal welcommed the commission's decision, saying: "Today's approval brings to an end an extensive EU regulatory review and the acquisition will benefit the artistic community and music industry."

The company said that after the asset sales, its catalogue would include the Beatles, Beach Boys, Genesis, Katy Perry, Emeli Sande and Robbie Williams. The Beatles, part of Parlophone, was exempted from the sale.

A source close to Universal said the company had already received interest in the assets for sale from well-funded potential buyers.

'Universal's arrogance'
Smaller rival music labels reacted angrily to the commission's decision. Impala, which represents independent label across Europe, claimed that the commission's conclusions acknowledged that "Universal's power is a problem across the whole market".

Helen Smith, executive chair of Impala, said: "This decision has finally put a freeze on Universal's ability to expand further and sets a benchmark for constraining abusive behaviour across the whole market.

"Following the approval of the Sony/EMI merger, however, this decision nonetheless reinforces what is already a powerful duopoly. Contrary to the basic principles of competition in cultural markets, artists and consumers will ultimately pay the price."

Martin Mills, chairman of Beggars Group, said: "It's good to see that the Commission has seen this deal as such a threat to the market that it has demanded and received truly swingeing commitments to divestments.

"However, that should not conceal that fact that Universal's arrogance has paid off for them, that they have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels.

"Anyone trying to start a new digital service will be realising that very soon, and we will continue to look to the regulators to monitor ongoing behaviour."

Belize wins 60-day reprieve after partial debt payment

Debt-burdened Caribbean nation Belize has won a 60-day reprieve from bondholders after paying a portion of its overdue $23m (?14.2m) debt interest.

It paid $11.7m to creditors, earning it some breathing space and reducing the likelihood of a full-blown default.
Belize had been due to pay the $23m bond interest payment, or coupon, on 20 August, but was given a 30-day grace period in which to do so.
It missed this deadline on Wednesday.
As a result, ratings agency Standard & Poor's categorised Belize as being in "selective" default, one step below a full default.
Bondholders say they are content with the part-payment and have delayed taking legal action.
"The government's decision on the coupon payment was taken in consultation with the [bondholder] committee and we consider it a material and good faith step in the right direction," said AJ Mediratta of Greylock Capital Management, co-chair of the committee.
Struggling economy

Tourism-dependent Belize, famous for its reef-diving and fishing, is trying to renegotiate the terms of a $550m 'superbond' it is now struggling to service.
Prime Minister Dean Barrow had said his country could not afford the coupon payment and promised to renegotiate the terms of the bond when he won a second term of office in March.
The superbond represents about half the country's national debt.
But the government's suggestion that creditors consider writing off 45% of their investment was not received favourably by the bondholders.
Creditors had worried that Belize was trying to bounce them into a Greek-style debt restructuring.
The superbond is due to mature in 2029, but the government wants the term to be extended, with payments spread over 50 years. It also wants the interest rate - currently 8.5% - to be reduced to 2%.
Negotiations are continuing.
English-speaking Belize, which won independence from Britain in 1981 and has a population of just 330,000, depends heavily on tourists from Europe and the US for its income, but the global financial crisis has drastically cut visitor numbers.

How to buy or sell a house against which loan is outstanding

6/10/2012

When Sameer Khan purchased two properties in the western suburbs of Mumbai three years ago, the idea was to generate extra rental income for his family. "I had taken loans for both flats when they were under construction. Though the properties are nearly completed, it will take another six months for the developer to give me possession," he says.

However, with the steep increase in home loan interest rates, Khan is finding it difficult to service both the loans and plans to sell one property. "The profits generated from the sale of one house can be used to pay the loan for the other," he says.

Financial insecurity is just one of the reasons aproperty owner may want to sell a house for which he is still paying the EMIs. A couple of years after buying the house, you may realise the need to upgrade to a bigger property because your needs have increased.

Some buyers also prefer shifting to a better location within the same city either because it offers better infrastructure or is closer to their workplace or their children's school. If you are moving to a different city for work, you may want to settle down there after disposing of the existing property.

While these arguments are valid for a seller of a mortgaged property, it may also make sense to buy a mortgaged resale property rather than one that is under construction. The advantage of purchasing a resale property is that it may be at a better and established location and you will be dealing with an individual instead of a builder's sales team.

"When a buyer approaches a developer, the salespersons use all kinds of pressure tactics to ensure a quick sale and the buyer doesn't get a chance to conduct due diligence," says Sandeep Sadh, chief executive officer of Mumbaiproperty.com, a Mumbai-based real estate portal. In the case of a resale property, you have ample time to examine the pros and cons of the deal before taking a decision.

Another advantage with buying a resale property is that banks generally conduct due diligence for the house that they are going to finance. "So if you are planning to buy a mortgaged property, rest assured that it has got all the necessary approvals by the relevant authorities," says Sadh.

Nanda bought a 2-BHK house in Thane, in 2009, for Rs 35 lakh. The seller had an outstanding loan of Rs 5 lakh.

How he settled the loan

Nanda made a down payment of Rs 12 lakh. The seller used a part of it to prepay the outstanding loan amount and got the original documents from the bank.

Nanda had a preapproved loan, and after registering the property in his name, he got the loan processed in 10 days to pay the remaining amount.
"I got a good deal on the property as the seller was in a hurry and was not finding enough buyers because of the outstanding loan."

While the reasons for selling and buying a mortgaged property may vary, one common problem that most people face is the lack of clarity on how to buy or sell a property that is mortgaged to the bank. Can you sell a mortgaged property at all? Do you need to settle the home loan first and then approach a buyer or can the buyer take over your loan? What if the buyer himself plans to take a loan to fund the purchase?

Many property owners who have bought the house with money borrowed from a bank have grappled with these questions. "I still have to repay a sizeable portion of the principal back to the bank before I can get the original papers," says Khan, whose house is mortgaged with a leading public sector bank.

Khan plans to sell his 2-BHK house at Goregaon, for which he has an outstanding loan of Rs 19 lakh. He has purchased another house through a bank loan and is finding it difficult to process both. So, he has decided to sell one.

How he plans to settle the loan

The potential buyer has agreed to pay him a lump sum. Once the original documents are released by Khan's bank, the buyer will apply for a housing loan when the documents are cleared by his bank.
"I have a copy of all the original property documents. The potential buyer can get it verified with the bank as well."

Reliance Capital gets RBI nod for mutual fund business stake sale

NEW DELHI: The Reserve Bank of India has approved Anil Ambani-led Reliance Group's Rs 1,450 crore stake sale in its mutual fund business unit to Japan's Nippon Life.

The diversified conglomerate's financial services arm Reliance Capital is selling 26 per cent stake in RCAM (Reliance Capital Asset Management Company) to Nippon Life for Rs 1,450 crore - making it the largest ever Foreign Direct Investment (FDI) in the Indian mutual fund space.

Sources said that RBI has cleared the deal, bringing it a step closer towards its completion. The transaction has already been cleared by the Competition Commission of India (CCI) and might be completed soon after achieving a couple of more remaining regulatory approvals, they added.

"We have no objection to your company transferring 26 per cent of the issued and paid-up equity shares in RCAM to Nippon Life," RBI communicated to the company in a letter dated June 7, 2012.

The Nippon Life transaction values RCAM, the country's most profitable fund house, at about Rs 5,600 crore.

The final agreements for this deal was signed in late March this year.

Reliance Capital has already completed another deal with Nippon Life, wherein the Japanese financial services giant has acquired 26 per cent stake in Reliance Life Insurance for Rs 3,100 crore, valuing the life insurance venture at about Rs 11,500 crore.

For the last fiscal ended March 31, 2012, RCAM posted a net profit of Rs 276 crore, retaining its position as the country's most profitable fund house for the second year.

The company's profit after tax grew by over five per cent from Rs 261 crore in the previous fiscal 2011-12. Its profit before tax also grew by five per cent to Rs 308 crore in the fiscal ended March 31, 2012.

Reliance Capital AMC (Asset Management Company) had overtaken HDFC AMC as the country's most profitable fund house during the previous fiscal 2010-11 and has managed to retain its leadership position.

Reliance Capital Asset Management managed Rs 1,40,853 crore ($27.5 billion) as on March 31, 2012, across mutual funds, pension funds, managed accounts and hedge funds.

Reliance Mutual Fund figures among the top two mutual funds in India, in terms of AUM, with market share of nearly 12 per cent and its average AUM stood at Rs 78,112 crore for the period ended March 31, 2012.

Summer sale on in global jet industry; airline bosses to meet in Beijing and discuss deals

BEIJING: A summer battle for orders is underway in the global jet industry, which gathers in Beijing on Sunday for the first of two crucial events in two months, pitting the world's largest planemakers against each other in a race for deals worth $50 billion at catalogue prices.

The potential deals span all continents and every pattern of powered flight from the largest airliners to warplanes and luxury business jets, shielding aerospace workers from the worst effects of a slowdown spreading from Europe's debt crisis.

But analysts say Airbus and Boeing are having to offer sporadically hefty discounts to ride out economic uncertainty, especially for maturing models or early batches of new ones like the 787 Dreamliner.

Boeing is expected to win the fiercely contested annual order race for the first time since 2006 as it catches up with a decision by Airbus to revamp medium-haul jets, resulting in big fuel savings for airlines on the Airbus A320 and Boeing 737.

The dominant civil planemakers are also positioning themselves early ahead of next month's Farnborough air show, with deals worth $14 billion announced in the past 72 hours.

Both companies have accused each other of waging a price war to win hundreds of orders for the revamped A320neo and 737 MAX respectively, and deny cutting corners themselves. Several industry analysts say pricing is under pressure this year.

"Both sides are heavily discounting," said Richard Aboulafia, aerospace analyst at US-based Teal Group.

Although the madeover medium-haul jets offer airlines a reduction of 15 per cent in fuel, the industry's highest cost, most carriers remain under financial pressure and some are delaying deliveries to shore up their cash positions.

Airlines meeting in Beijing are expected to hear that their industry body, the International Air Transport Association (IATA), has left its forecast for 2012 sector profit unchanged at $3 billion, but unease is growing as Europe discusses a new bailout and China's economy slows.

Major characters in the aerospace industry are in the Chinese capital negotiating on the sidelines of IATA's Beijing summit, which comes weeks before another showcase, the July 9-15 Farnborough air show in Britain.

Chicago-based Boeing was relegated to the background during most of last year's equivalent event as Airbus broke records with sales of the A320neo, but later opted for a similar upgrade.

This year will be different. Boeing is preparing to hit back with a spree that could soon include an order from United Continental for 100 narrowbody jets plus some 70 options, industry sources said.

It will want to persuade the top five aircraft leasing companies led by AIG unit ILFC to put firm signatures on undisclosed draft orders that US aerospace analyst Scott Hamilton estimates at 300-400 jets. These will include an order from GECAS, whose General Electric makes 737 engines.

Obama says private sector is fine — see the charts

During a press conference Friday, President Barack Obama said the private sector “is doing fine,” a comment that drew immediate scorn from conservatives. (Read our story) House Speaker John Boehner, an Ohio Republican, replied the private sector is “not doing well,” and Republican presidential rival Mitt Romney said the remarks show Obama is out of touch. Obama himself later offered a clarification to reporters, saying the economy is “not fine.” In any case, the data on the private sector — what MarketWatch interprets to mean “business” — offers multiple interpretations. Here are the charts of the relevant statistics.