TheChek News Flow

Apple is trying to lure top Swiss watchmakers away from luxury brands owned by LVMH in the race to bring mobile computing to the wrist.

Technology groups leading the charge in the nascent wearables sector are jostling against companies in Europe’s venerated horology industry, which face potential upheaval from smartwatches.

Traditional Swiss watch brands claim they are being courted by the likes of Apple, Samsung and Google, as Silicon Valley places increasing importance on the aesthetics and design of new hardware.

But Swatch, the world’s biggest watchmaker by sales, which owns luxury watch brands Harry Winston, Breguet and Blancpain, says it has little intention of working with technology groups.

“We have been in discussions – not ever initiated by us – with practically all players in smart wearables up until today,” Swatch chief executive Nick Hayek told the Financial Times. “However, we see no reason why we should enter into any partnership agreement.”

He added that his priority was to protect Swatch’s intellectual property advantages over tech rivals, including ergonomic design, longevity and battery life.

“Never forget, to make a smartwatch work you need two hands or voice recognition, which again needs a lot of power which is difficult in a very limited space,” he said.

Jean-Claude Biver, the outspoken president of LVMH’s watches and jewellery division, accused Apple of trying to recruit staff from his Hublot brand, and from several Swiss parts manufacturers.

“Apple has contacted some of my employees – I saw the emails personally,” Mr Biver told a Swiss publication, claiming that all those who had been contacted refused the iPhone maker’s advances.

Apple declined to comment, but the Cupertino-based company has stepped up its recruitment from within the fashion and luxury industry in the past year, as it readies its iWatch. Google, meanwhile, is teaming up with Luxottica, maker of Ray-Ban sunglasses, for its Glass project.

Larry Pettinelli, US president of watch brand Patek Philippe, said “it is conceivable that they [Apple] would be interested in developing a type of hybrid with some type of mechanical aspects . . . the Swiss watch industry is very adept at metallurgy”.

Despite the protestations of watch company executives, some industry observers suggest that watchmakers may gain more from co-operation than confrontation.

“The big threat for luxury is that if Apple and other rivals manage to go it alone, then the watchmakers will have lost vital ground in what could be a huge market opportunity,” said Luca Solca of Exane BNP Paribas.

“Apple may decide that they possess sufficient distribution and design resources and that poaching talent is a better option than forging volatile partnerships.

Risks in Europe's Ratings Merry-Go-Round

It's Not Easy Being a Ratings Firm, Particularly When it Comes to European Sovereigns

It's not easy being a ratings firm, particularly when it comes to European sovereigns.

First firms such as Moody's, Standard & Poor's and Fitch came under fire for moving too slowly as the euro-zone crisis developed, with markets discounting southern European government bonds ahead of downgrades. Then they were criticized by politicians and policy makers for overreacting to the crisis and contributing to its acceleration. Now, some investors are asking the ratings firms to dish out upgrades, arguing that sovereign assessments are too low.

That is a red flag that the search for yield is acting as a more powerful force on investors than the assessment of risk, just as in the precrisis days. Back then, the ratings firms faced pressure to upgrade Greece — which was then rated in the single-A category. Investors wanted to take bigger exposures to Greece, whose bonds yielded some 0.2-0.4 percentage points more than Germany in 2004-2007. The search for yield meant that this was seen as an attractive pickup in returns. But a single-A rating for a government meant that some investors faced limitations on how much they could hold.

Now the search for yield is on again, and calls are being made for Spain and Portugal, in particular, to be upgraded. Ratings are much lower—in Portugal's case, the country is stuck well below investment-grade status, meaning that its bonds are off limits to many investors. UniCredit UCG.MI +0.62% this week estimated that based on economic statistics, Portugal and Spain should both be rated a whopping five notches higher than they currently are.

And the returns this time are mouth watering. Portuguese bonds have returned 11.6% year-to-date, according to Barclays, BARC.LN +0.24% with 10-year yields falling by over 2 percentage points to below 4%--still some 2.5 percentage points above German yields. Spain has returned 5.9%.

True, the situation in the euro zone has clearly improved since the dark days of mid-2012. Liquidity pressures have receded—even Greece seems likely to return to market funding soon—and the economic outlook has improved too. The risk of another Greek-style government debt restructuring appears minimal. Spain and Portugal have made progress on reforms and are back to growth. That would argue for higher ratings.

But debt burdens are still rising, and in several cases stand above 100% of gross domestic product. Concerns remain about long-term debt sustainability unless governments continue with economic policies that are likely to boost growth potential. With markets no longer pressuring governments into action, the risk of complacency has risen. Even for countries that have made good progress on reform, like Spain, there is further to go. Italy and France have yet to start.

Ratings firms have reflected the stabilization in Europe by lifting negative outlooks—but only to stable in most cases. That looks sensible given the remaining risks: investors lobbying for swift upgrades deserve to be disappointed.

BlackBerry Ltd.BB.T +2.51% is betting it can once again make money from selling smartphones.

That seems like an about-face for Chief Executive John Chen, who just three months ago appeared to largely write off that part of the business as a future source of growth.

Mr. Chen said Friday that the Canadian smartphone maker plans to relaunch production of its older BlackBerry 7 mobile device because of strong global demand. He also touted upcoming launches of new devices aimed at emerging markets and another phone — known as the Classic — targeting BlackBerry’s traditional business customer base, to help boost revenue and generate profit.

“I hope nobody thinks we don’t take seriously the handset business,” Mr. Chen told investors on the company’s fourth-quarter earnings call.

BlackBerry reported a loss of $423 million, or 80 cents a share, for its fiscal fourth quarter ended March 1, but continues to expect to start generating a profit in fiscal 2016. Mr. Chen said the handset business itself will also return to profitability by that time.

The company’s bullishness on the handset business likely comes as a surprise to many.

The Waterloo, Ontario-based firm first rose to the top of the tech world on the popularity of its mobile devices. But it crashed from its perch in recent years as businesses and consumers flocked to more compelling offerings from Apple Inc., Samsung Electronics Co. and others.

In December, Mr. Chen signaled the firm’s future rested on selling software and services such as BBM, its popular messaging application. Many analysts and investors took that to mean the executive believed the hyper-competitive handset business lacked potential to generate profits.

To be sure, focus on software and services remains central to BlackBerry’s recovery strategy. Mr. Chen said Friday he has abandoned the company’s past efforts of giving away software and instead is focused on selling it.

“I don’t find the practice (of giving away software) very sensible,” he said.

At the same time, Mr. Chen also said the handset business is important, reassuring investors the new production run of the BlackBerry 7 phones will be done at a profit.

“I have no intention of losing money on handsets,” he said.

Shire Plc US appeals court reverses claim and remands in patent case vs Watson (Actavis); Shire will have to reargue case against Watson

The plaintiffs-appellees (collectively, Shire) own U.S. Patent No. 6,773,720, which claims a controlled-release oral pharmaceutical composition for treating inflammatory bowel diseases. Shire markets these oral pharmaceutical compositions under the brand name LIALDA. After the defendants-appellants (collectively, Watson) submitted an Abbreviated New Drug Application (ANDA) seeking approval to sell the bioequivalent of LIALDA, Shire sued for infringement of the 720 patent. After construing certain relevant claim language, the district court found that Watsons product infringed the 720 patent. We conclude that the district courts constructions of inner lipophilic matrix and outer hydrophilic matrix impermissibly broaden the ordinary meaning of the terms.

- Accordingly, we reverse the district courts claim constructions of inner lipophilic matrix and outer hydrophilic matrix, and subsequent finding of infringement, and remand for further proceedings consistent with this opinion

- Shire the platintiffs appellees, Watson (Actavis) the defendants Appellants

level until well into 2015 - interview

Last EnBW affair brought a state government to implode. Now comes Thuringia's Minister President Christine Dear servant in the industrial policy quandary. How powerful the policy is to be the flagship group, Jenoptik?

Hamburg - The Free State of Thuringia explores the acquisition of a large block of shares from the principal owner of the technology group Jenoptik Show Chartfrom. Currently, the Austrian entrepreneur family Humer still holds 14.01 percent of the East German flagship company that manufactures next optical products among other components for tanks, fighter jets and other weapons systems.

Head of the family Rudolf Humer, 70, however, strive for the exit, according to financial circles. There have already given soundings with representatives of Thuringia.

The Free State Development Bank holds over its current 11 percent stake in the company with 3400 employees and 600 million euros in sales. In extreme cases, Thuringia would thus come to a blocking stake of 25.01, with the might characterize all important decisions the country.

Memories of Stefan undersecretary be monitored

The plans bring the state government under Dear Christine Knecht (CDU) almost six months before the state election in a delicate situation. Finally, the CDU government was shattered in Baden-Württemberg at a similarly massive industrial policy step. The then Prime Minister Stefan undersecretary had bought in late 2010 a large block of shares in the energy supplier EnBW at a high price, without involving parliamentary bodies. He justified the purchase with the defense of other unwelcome foreign shareholders.

The Hanseatic City of Hamburg, however, continues with its commitment for years a comparatively successful course: About ten years ago she held as the cosmetics company Beiersdorf Show Chartin the city, and the commitment with the shipping company Hapag-Lloyd as minority owners is so far the consent of the people.

2 Part: Party friendship with CEO

What dear servant justify an entry is unclear. With its blocking minority could prevent the destruction of the group, from their party colleague Michael Mertin is performed. However, Jenoptik is protected as a manufacturer equipment-related goods, at least in part, from too aggressive actions by shareholders by the Foreign Trade Act.

For Humer the moment seems favorable: he had a share in late 2007 Jenoptik Show Chartacquired by nearly 15 percent for more than 50 million euros. Especially in recent years, but the price has increased rapidly. Currently, the share of 14.01 percent still on the stock market is worth almost 105 million euros.

A spokeswoman for the investment vehicle of Humers, the ECE Industrial Holdings, announced: "We are constantly being approached by various interested parties regarding our Jenoptik commitment." Specifically, to contacts with representatives of Thuringia she declined to comment.

Dear servant answered a telephone and written request for an opinion is not, nor Matthias Wierlacher, CEO of Thuringian Development Bank, on the Thuringia keeps his Jenoptik's shares. Supervision of the Development Bank keeps Finance Minister Wolfgang Voss.

The denied that the Free State of Thuringia was interested in increasing its stake. Asked whether he could rule out that also apply to institutions of the Free State, said his spokesman, the Free State was not involved in Jenoptik. On the question of how this thesis together so passe, that the Development Bank is involved in Jenoptik and the bank in turn is a public institution and is funded indirectly by Thuringia, he did not answer