FT : Apple seeks $2bn from Samsung in fresh patent battle

Apple seeks $2bn from Samsung in fresh patent battle

Apple will this week seek more than $2bn in damages from Samsung for allegedly copying features of its iPhone, as Google makes its first appearance in the US courtroom battle between the smartphone rivals.
The latest fixture in the long-running patent fight will see the US and South Korean technology companies go head-to-head before a jury in the same courtroom in San Jose, California, that awarded $1bn in damages against Samsung in 2012.

Many of the companies’ arguments will probably be repeated despite the different patents and smartphones at issue, with several of the same experts and witnesses presenting evidence, including Apple’s marketing chief Phil Schiller.
However, in a departure from the previous case, Samsung will also call on the engineers behind Google’s Android operating system, used by it most popular smartphones.
Though Google, which does not generate any revenue directly from Android, is not a defendant, Samsung’s legal team hopes that bringing another Silicon Valley company to aid its defence will reduce a perceived “home turf” advantage for Apple.
Google executives, including Hiroshi Lockheimer, vice-president of engineering for Android, are expected to describe how they created the software that powered more than three quarters of all smartphones sold last year, independently of Apple’s iPhone development.
Samsung’s legal tactic mimics Apple’s lyrical retelling of the “revolutionary” iPhone’s creation by its late founder Steve Jobs at the 2012 trial.
The first verdict’s damages have already been reduced to $929m after a partial retrial last year, when Apple argued that awarding a stiff penalty was vital to protecting Californian innovation and jobs.
In the 2012 case, Apple asserted both design and utility patents against Samsung, encompassing the overall look and feel of its iPhones and iPads.
This time, its case hangs on five utility patents covering narrow software features that Apple hopes will give a taste of the much wider copying by Samsung it alleges.
These include the iPhone’s automatic correction of mistyped words, the slider that unlocks the home screen and the “universal search” that allows a user to look for content on the device and the internet simultaneously, sometimes using the Siri voice-activated assistant.
Devices Apple accuses of infringing these patents include Samsung’s best-selling but ageing Galaxy S3 and Galaxy Nexus smartphones, the latter device having been developed largely to Google’s specifications.
In a counter suit, Samsung is asserting just two utility patents, which cover wireless video transmission it argues is vital to Apple’s FaceTime feature and a method for organising digital photos.
Despite Samsung’s large intellectual property portfolio, Apple’s is likely to leverage the fact that it bought in patents developed elsewhere. Samsung is expected to counter that Apple, Google and other innovators also acquire patents in the market.
Such factors will be central to how the jury values the patents and the damages it may award, which can reflect lost royalties and profits.
Apple is asking for between $33 and $40 for every phone sold that infringed its five patents since 2011, which it claims number in the tens of millions.
Though the figure has already proven controversial among some patent analysts, Apple will argue that it is a fair representation of a hypothetical licensing negotiation for features that are central to the functionality of a successful smartphone.
Samsung, on the other hand, is asking for much lower damages, totalling a little over $22m, for infringement by Apple devices including the iPhone 5 and iPad mini. Apple might argue that this is part of a wider attempt by Samsung to lower the value of intellectual property. It might also have the affect of making Apple’s demands seem excessive.
Apple, Samsung and Google all declined to comment ahead of the trial.
In their defences, both sides are likely to try to prove that the other’s patents are invalid, as well as that their own devices did not infringe them.
The overarching patent battle between Apple and Samsung shows no sign of slowing, after mediation talks failed yet again ahead of the trial.
However, despite its damages wins, Apple is yet to succeed in barring Samsung from selling its smartphones in the US, nor has it collected any damages, as legal fees mount into the tens or even hundreds of millions.
Meanwhile, in a separate legal battle for Apple, a judge on Friday granted class-action status to individuals seeking hundreds of millions of dollars in compensation for the iPad maker’s alleged ebook price fixing.
Apple is already appealing Judge Denise Cote’s ruling in New York last year that it colluded with publishers to raise ebook prices.

FT : Break-up talk pushes S&N higher

Break-up talk pushes S&N higher

Break-up speculation lifted Smith & Nephew on Friday.
S&N rose 2.4 per cent to 921.5p after Investec Securities said the medical devices maker would be worth around 15 per cent more if it were split into three.

Wound management, endoscopy and orthopaedics all have sufficient scale to operate individually, with distinct requirements and few group-level synergies, said Investec.
It reckoned S&N’s core orthopaedics division has underperformed because management’s investment and attention has been on higher growth areas.
The broker also noted that, before joining S&N in 2011, chief executive Olivier Bohuon had overseen Abbott Laboratories’ preparations to spin out its pharmaceuticals unit.
Potential spurs to split S&N would include full integration of its recent Artorocare acquisition, regulatory approval of its leg-ulcer therapy or another big purchase to support its orthopaedics business, it said.
Using peer valuations, Investec set a hypothetical break-up value of £12.67 on S&N shares.
“Whilst a break-up has not been suggested or discussed by management, we feel the markets are ready and supportive,” the broker told clients.

>>> ICBC mulling bid for Pioneer Investment Management

ICBC mulling bid for Pioneer Investment Management 

Industrial & Commercial Bank of China (ICBC) is thinking about making an offer for Unicredit’s Pioneer Investment Management arm, The Sunday Times reported. The newspaper cited City sources who said ICBC is interested in buying a European fund management firm.

It is believed that ICBC has considered making an offer for Ignis, the asset management of Phoenix Group, the item said. Phoenix, a UK-based insurer, sold Ignis to Standard Life last week.

Unicredit has said that Pioneer remains central to its long-term strategy, the article noted. However, the Italian bank last week reported losses of EUR 14bn (USD 19.26bn), leading to speculation that it might look to sell Pioneer, according to the report.

Pioneer manages EUR 174bn of funds, the article noted.


Source Sunday Times

(JDD) The French put their chips in the United States

The transition to electronic chip cards for payment of U.S. accelerates. A paradise for world leaders such as Gemalto and Oberthur

The attack was unprecedented. For more than fifteen days, from November 27 to December 15, 2013, nearly 100 million credit card holders, clients of the U.S. retail chain Target, have hacked their accounts. The shock wave has overtaken the entire financial sector. Several banks have immediately decided to limit the use of maps of their customers for withdrawals at ATMs or for purchases in stores. Unwelcome in the midst of shopping extent, between Thanksgiving and Christmas. The cyber attack that precipitated the mutation

U.S. authorities have been quick to react. Surveys have shown that hackers based on the side of Ukraine, had been able to recover all the information embedded in the cards. They also confirmed that the system tape which equips almost all credit cards and U.S. credit pose a low security level. "The United States had planned to gradually migrate to the electronic chip. The attack had the effect of accelerating the mutation "is satisfied boss Oberthur Technologies, Lamouche. This week, the French American tour was to meet new clients. It goes back to the U.S. market its biggest rival, Gemalto, the world number one, also French, who intends to take advantage of this technological transition to high commercial potential.

With 1.2 billion payment cards in circulation and more than 50 million of them equipped with a chip , the U.S. market is a wonderful paradise . "We think the next two years , half of the cards have been converted ," predicts Lamouche . The two French heavyweights began to reap lucrative contracts . Wells Fargo, the fourth U.S. bank, Oberthur , payment cards of UN personnel to Gemalto. Another French actor is also set, Morpho , Safran subsidiary of the giant , which already has ten banks among its clients. With 14,000 banks listed on U.S. soil , everyone is entitled to his share. "The customer distribution groups , also offering credit cards to their customers, is also significant ," says Sylvie Gibert , Marketing Director of Gemalto , which achieved 2.2 billion euros turnover of the last year, with growth of 20 % of the activity cards.

After conquering the world leader , win the Atlantic would be a victory for the two Frenchies . " This is because the chip was not designed in the United States that Americans have been so reluctant to adopt it as standard ," said Didier Lamouche . It explains the successes and Gemalto , Oberthur , born from the merger of Axalto and Gemplus in 2005 by several factors: the mastery of technology, family shareholders visionaries, voluntarism internationally and the opportunism to participate in industry consolidation . AxaltoGemplus marriage is an illustration . "That's what was missing , for example, European manufacturers of telephony, which failed to come together ," analyzes the CEO. A similar scenario expected for China

In the United States , both French were able to invest and wait for the opening last profile. Oberthur , now owned by an investment fund , has three outreAtlantique plants, and is established in 1996. Gemalto has a manufacturing plant in Pennsylvania. The potential U.S. does not lose sight of the French groups another huge market : China. "It is three times larger than the United States because there should ultimately employ 3 billion payment cards ," says Sylvie Gibert, Gemalto . China is , too, engaged in an accelerated towards the chip mutation.

(JDD) Bouygues tries to seduce Dassault and Qatar (Google translation)

Bouygues tries to seduce Dassault and Qatar
Martin Bouygues seeks partners to improve its bid for SFR . His opponent Numericable guard ahead

Martin Bouygues plays his all . There are only five days Bouygues CEO to try to turn the tide and win SFR, sold by Vivendi. Giant telecommunications and media entered since March 14 into exclusive negotiations with Numericable to cede control of the second French mobile operator. Talks last until Friday. This April 4 , Vivendi will tell if he sells SFR Numericable or if investigating the option of Bouygues.

For fifteen days, the construction group is looking for money . Everywhere. He multiplied the all-round contacts for " finding new partners may buy out 21% Vivendi keep in Bouygues , SFR ," said a source close . Nothing will be unveiled in the coming days . This scenario would not occur until the completion of the transaction at the end of the year. Advantage? It allows us to offer more cash than the 13.15 billion euros on a total supply current of € 17.4 billion . According to several sources , the sovereign fund of Qatar was approached and discussed with Bouygues to financially support the project. The position of the emirate proves difficult as he is already a shareholder of Vivendi , the seller. A conflict of interest as regards the Deposit partner on both sides. For a ticket of approximately € 500 million of investment funds were also contacted as CVC , Eurazeo or U.S. KKR and Apollo , who , themselves, have declined.

Patrick Drahi is very confident
Martin Bouygues also seeks among the great fortune to join the French Pinault and Decaux, already at his side. According to our information , the Dassault family was asked to participate in the round. What nobody denies the entourage of Bouygues . The owner Philippe Louis -Dreyfus , whose family has owned the operator Neuf before it was acquired by SFR, would , in turn , rejected the proposal to return to telecoms. Complex, the project Bouygues fails to convince .
Faced with the onslaught of construction giant , Numericable plays "Zen" card. A friend of the boss, Patrick Drahi , said: "I got on the phone this week , it is very sure of himself, he is not worried . " " Everything is going as planned, explains his entourage. We remain confident and serene face to the offer Bouygues considered hostile. " Drahi also

WSJ : Small Is Beautiful in Chinese Web Stocks

Small Is Beautiful in Chinese Web Stocks

China's Internet giants are engaged in a furious land grab. For investors, it is better to own the land than the grabber.

Until recently, the three giants had been mostly content to expand on their own turf: Alibaba Group Holding in e-commerce, Baidu BIDU -0.23% in search and Tencent Holdings TCEHY +3.53% in games and messaging. Now, a flurry of deal making—five significant acquisitions this month alone—has the trio stomping all over each other's turf and beyond China. Alibaba's planned $15 billion initial public offering in New York has heightened investor attention.

Tencent has taken the fight to Alibaba with an investment in JD.com, a direct rival in online retail. Tencent's investment in second-place search engine Sogou, owned by Sohu.com, SOHU +1.88% is a direct attack on Baidu. Alibaba's stake in Sina's SINA -1.59% Twitter TWTR +2.12% -like Weibo is aimed at Tencent's messaging prowess.

The battle has spilled abroad, with Alibaba and Tencent both investing in U.S.-based chat startups, and Tencent investing in a Korean gaming company. Tencent's WeChat also is working to develop an audience overseas to challenge Facebook's FB -1.57% WhatsApp and others.

Foreign players such as Facebook and Twitter are boxed out by Beijing. And Google GOOG +0.53% withdrew in 2010. This has created a hothouse in which the largest domestic players hold even more sway. The small guys have little choice but to choose sides.

Since the start of 2013, Baidu has spent more than $2.4 billion on acquisitions, Alibaba over $1.9 billion, and Tencent at least $1.3 billion, not counting the value of two businesses it traded to JD.

The deals aren't huge yet, especially relative to the size of the acquirers. But as the frenzy continues, and competition intensifies, heavy spending on marketing and promotions is eroding profitability.

Operating margin at Tencent fell to 28% in the fourth quarter of 2013 from 39% two years earlier. Baidu's margin fell to 28% from 51% over the same period, and the company warned investors not to expect any profit growth this year despite rapidly rising revenue.

In this environment, potential acquisition targets may prove better investments. A few publicly listed companies are now conspicuous for their lack of affiliation with any of the major players.

Following Tencent's investment in Leju, the online unit of Chinese real-estate broker E-House (China) Holdings, EJ +1.69% it wouldn't be surprising to see a rivals take an interest in much larger Internet real-estate site Soufun Holdings, SFUN +4.00% which has dominant market share in online-property advertising.

Each of the big three now compete in online video, and Alibaba this month acquired a controlling stake in ChinaVision Media Group, 1060.HK +0.57% a film studio that can help provide content. Stand-alone site Youku Tudou YOKU +1.60% is wrestling with Baidu's video for the top spot by monthly users. Youku is loss-making due to the high cost of content, but its video library could be a valuable resource for one of the big three.

Travel is another hot spot. Baidu has a majority interest in bookings site Qunar Cayman Islands, QUNR +9.76% while Tencent holds a minority stake in rival eLong. LONG -1.05% But Ctrip.com International, CTRP +2.89% the largest travel site by revenue, is independent.

These companies range from market values of $4.5 billion for Youku to $6.1 billion for Ctrip, so deals for minority stakes would likely be in the same range as recent ones.

The biggest stand-alone player, with a market value of $11.4 billion, is Qihoo 360 Technology. QIHU +2.31% It provides security software and operates China's third-largest search engine behind Baidu and Sogou, now part-owned by Tencent. A strategic alliance with a bigger player is possible, perhaps cemented by the sale of a stake in one of its units.

sThe big three are well positioned to capture users and traffic on China's Internet. But as they compete to scoop up minnows, investors might want to look beyond the hunters to the prey.

(BFW) ECB Rate Increase Seen by German Finance Ministry, Spiegel Says

 BN 03/30 09:31 *DER SPIEGEL CITES GERMAN FINANCE MINISTRY DOCUMENT ON ECB
BFW 03/30 09:30 *GERMAN FINANCE MINISTRY EXPECTS ECB TO RAISE RATES: DER SPIEGEL
ECB Rate Increase Seen by German Finance Ministry, Spiegel Says
2014-03-30 09:43:15.305 GMT


By Tony Czuczka
     March 30 (Bloomberg) -- Der Spiegel cites leaked Finance
Ministry document saying ECB is expected to make active
contribution to overcoming low-rate policy, potentially raising
borrowing costs for Germany within a year.
  * Waning euro-area debt crisis and increasing economic growth
    cited in ministry paper: Der Spiegel
  * German 10Y bund yield may rise to more than 2%, ministry
    paper says: Der Spiegel
  * NOTE: German 10Y yield is 1.548% {WBX EU <GO>}
  * NOTE: Weidmann Says ECB Should Only React to 2nd-Round
    Disinflation {NSN N370BF6JTT3P<Go>}
  * NOTE: Schaeuble Praises ECB for Price Stability, Helping
    Save the Euro {NSN N370536S9728<Go>}


Link to Company News:{2539Z GR <Equity> CN <GO>}

For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the editor responsible for this story:
Tony Czuczka at +49-30-70010-6227 or
aczuczka@bloomberg.net

(BFW) Bouygues Seeks Funds From Qatar to Raise Offer for SFR, JDD Says

Bouygues Seeks Funds From Qatar to Raise Offer for SFR, JDD Says
2014-03-30 08:48:12.144 GMT


By Mathieu Rosemain
     March 30 (Bloomberg) -- Bouygues seeks additional funds
from Qatar, Dassault family to raise its cash offer for SFR,
French weekly newspaper Journal du Dimanche reports, without
saying from where it got the information.
  * CVC, Eurazeo, KKR and Apollo were also approached for EU500m
    investment in SFR: JDD
  * KKR and Apollo said they weren’t interested: JDD
  * NOTE: Vivendi, in the process of selling its SFR French
    phone unit, is in exclusive talks until April 4 with Altice.
    Related story: NSN N301M16S972W <GO>


Link to Company News:EN FP <Equity> CN <GO>
Link to Company News:VIV FP <Equity> CN <GO>
Link to Company News:ATC NA <Equity> CN <GO>
Link to Company News:ILD FP <Equity> CN <GO>

For Related News and Information:
Bouygues Says Seeking Investors to Facilitate Vivendi’s SFR Exit
NSN N31KLW6JIJV7 <GO>
France’s AMF Says Bouygues, Vivendi, Altice May Risk Sanctions
NSN N35OLD6S9730 <GO>
Vivendi Said to Seek Improved SFR Offer From Drahi’s Altice (3)
NSN N301M16S972W <GO>
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Mathieu Rosemain in Paris at +33-1-5530-6298 or
mrosemain@bloomberg.net
To contact the editors responsible for this story:
Chad Thomas at +49-30-70010-6232 or
cthomas16@bloomberg.net
Shaji Mathew, Dale Crofts

FT : Don’t buy funds, buy fund houses

Don’t buy funds, buy fund houses

Asset manager shares outperformed the MSCI in 20 of the 24 calendar years between 1990 and 2013
Canny investors have long wondered whether they should consign the fund industry’s ever-multiplying mounds of glossy marketing material to the bin, and simply invest in the shares of asset managers instead.
Research by a small UK-based fund house may have gone some way to answering this question for good.
Figures collated by Guinness Asset Management show that, since 1990, an equally weighted portfolio of global asset management stocks has returned 17.9 per cent a year, amounting to a healthy 5,053 per cent in aggregate. This comfortably beats the 6.5 per cent (356 per cent in total) mustered by the MSCI World index, which in turn will have outperformed virtually every equity fund.

Cynics will rightly point out that the 1990s was a decade of extraordinarily strong market returns; asset managers, as geared plays on the market, could hardly go wrong.
But even in the period since 2000, an era pockmarked by two nasty stock market crashes, asset managers have soared above the fray, returning 9.1 per cent a year, compared with the 5 per cent of the MSCI World index.
Asset managers outperformed the MSCI in 20 of the 24 calendar years between 1990 and 2013, as well as trumping the MSCI World Financials index in 16 of the 18 years since the latter’s creation in 1996.
But the asset management sector has proved more volatile than the wider market, with quarterly volatility of 13.2 per cent since 1990, against 8.6 per cent for equities at large. Moreover the sector’s beta has averaged out at 1.35, meaning it typically rises (or falls) 35 per cent more than the underlying market.
However, using perhaps more meaningful measures of risk, investors may not have had to take a particularly large gamble at all in order to achieve these outsize returns.
Following the 2000 stock market crash, the asset management sector suffered a maximum drawdown (peak to trough fall) of 42.9 per cent, compared with the 46.2 per cent of the MSCI World. It returned to its previous peak within 12 quarters, half the time it took the wider market to recover.
The maximum drawdown was admittedly a little higher after the 2007 market crash (55.8 per cent versus 48.4 per cent for the wider market), but asset managers still returned to their previous peak a fraction faster.
“On a rolling three-year period, we cannot find a period where the asset management sector underperformed equities,” says Will Riley, co-manager of the Guinness Global Money Managers fund, set up to exploit this apparent anomaly.
“That is something that quite surprises people. I think people have this idea in their mind that it is a fair-weather sector.”
And while it is early days, the concept of investing in the industry’s shares also appears to work in practice.

The Global Money Managers fund – believed to be the only vehicle of its kind worldwide, although there are a number of broader “financials” funds – endured a poor launch year in 2011, losing 18.7 per cent.
But in 2012 it came first out of 234 funds in the IMA Global fund sector, and in 2013 it was third out of 245. Despite its difficult first year, it is third out of 215 funds in the sector during the first three years of its life, returning 64.7 per cent, compared with the 41 per cent of the MSCI World.
The fund has proved a little more volatile than the market at large, but its Sharpe ratio, a measure of risk-adjusted returns, is 0.55, compared with 0.31 for the MSCI World.
Star performers have included Polar Capital, which delivered a total return of 313 per cent during 2011-13, Azimut (238 per cent), Liontrust (217 per cent), Affiliated Managers Group (119 per cent) and Waddell & Reed (106 per cent), although Artio Global Investors did its best to upset the apple cart, slumping 80 per cent before being rescued by Aberdeen Asset Management in May 2013.
But is there a logical reason to believe any sector can consistently outperform the wider market? In the case of asset managers, Mr Riley and Tim Guinness, founder and chief investment officer of Guinness AM and co-manager of the fund, believe so.
First, they point to the industry’s unusually high returns on capital, partly a reflection of its ability to scale up with relatively little additional investment. According to Guinness, asset managers with a market capitalisation above $500m enjoyed a median cash flow return on investment of 16.7 per cent a year between 1991 and 2013, compared with 7.6 per cent for the market as a whole.
The duo also argue that asset management, like the luxury goods sector, is a “special” industry that can grow at a higher rate than the global economy for multiple decades.
Since 1990, rising household wealth has seen the industry’s assets under management rise by 700 per cent, dwarfing the 150 per cent return on global equities.
“The amount of private wealth is going from one times gross domestic product to four or five times over a 70 to 80-year period,” says Mr Guinness, who argues such an asset pile is needed to fund retirements.
“Absent a war or two, it will carry on growing. [Investing in the asset management industry] is like putting your canoe in the fastest-moving part of the stream,” adds Mr Guinness, who previously built the £13bn AUM Guinness Flight Hambro business, bought by Investec in 1998.
The managers also point to the asset management industry’s ability to raise revenues without adding new customers when equity markets rise (although this is a negative when markets fall).
And despite its strong run, the sector does not appear to be unduly expensive, trading on 14.2 times consensus 2014 earnings forecasts, a fraction below the 14.6 times of the S&P 500 index.
Tom Brown, global head of investment management at KPMG, the professional services firm, is unsurprised by the findings. He says “the profitability and share prices of fund managers will outperform the funds themselves in a rising market”, as asset-based revenues increase faster than the relatively fixed cost base of a business.
Rob Mellor, asset management partner at PwC, the consultancy, says some people did invest in asset managers as a proxy for their funds, particularly where funds may be closed to new investors.
But he cautions that the industry faced a “battle” to maintain its current level of profitability, given the incursions by low-cost passive funds. Despite this, he believes asset managers should be able to increase their market share at the expense of competitors such as insurance companies.
The Guinness fund remains small, but with a three-year record under their belts, the managers are keen to begin marketing it in earnest. However, one obvious downside remains.
Given the equal-weighted nature of the fund, and its specialist remit, Mr Riley and Mr Guinness believe they can only run a maximum of $250m in the strategy, a tiny fraction of the sum invested in funds worldwide.
Moreover, investors cannot sidestep this limit by investing in Guinness itself, as it remains owned by Mr Guinness and his staff.

FT : Franklin Templeton loses $5.5bn amid Ukraine turmoil

Franklin Templeton loses $5.5bn amid Ukraine turmoil

Investors have pulled $5.5bn from the funds of Michael Hasenstab, the star fixed income manager at Franklin Templeton, amid political turmoil in Ukraine.
Mr Hasenstab, who has gained fame for his aggressive bets on recoveries in the Irish and Hungarian debt markets, reportedly holds more than a third of Ukraine’s international dollar bonds.

With Ukrainian bond prices having fallen sharply on fears that Russia’s annexation of Crimea could lead to a wider conflict, investors have withdrawn $3.6bn from the Templeton Global Bond fund so far this year, according to figures from Morningstar, the data provider. The fund held $4.3bn of Ukrainian government bonds at the end of December. Around $1.9bn has also been pulled from Templeton’s Global Total Return fund, the best-selling mutual fund in Europe last year, which held just over $1bn of Ukrainian sovereign debt at the end of December.
However, the International Monetary Fund, which last week led a $27bn international support package for Ukraine, has said it does not envisage the country’s debt will have to be restructured at this point.
Franklin Templeton declined to comment, apart from saying that its global bond group, which manages $190bn of assets, often takes a contrarian approach.
Régis Chatellier, senior emerging markets credit strategist at Société Générale, said: “To the extent that no debt reprofiling is envisaged, the downside on Ukrainian bonds may be limited.”
Mr Chatellier added that Ukrainian bonds looked “well positioned” to outperform other emerging markets’ debt.