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RIM to Pay Nokia to Settle Patent Dispute
“Struggling Finnish mobile phone maker Nokia has settled its patent dispute with BlackBerry maker Research in Motion in return for payments, as it tries to exploit its trove of technology patents to boost its finances.
Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.
Nokia is one of the industry’s top patent holders, having invested 45 billion euros ($60 billion) in mobile research and development over the past two decades.
It has been trying to make use of that legacy to ensure its survival, amid a fall in sales as well as cash. The Finnish firm is battling to recover lost ground in the lucrative smartphone market to the likes of Apple and Samsung.
The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC and ViewSonic still stood.
“This agreement demonstrates Nokia’s industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market,” said Paul Melin, Nokia’s chief intellectual property officer…”
Comments »Insurer Aviva Sells U.S. Unit for $1.8 billion
“LONDON (Reuters) – Aviva , Britain’s No. 2 insurer, has agreed to sell its U.S. business for $1.8 billion, far less than it paid for it and the biggest disposal so far in a reorganization aimed at boosting its underperforming share price.
Aviva USA Corporation, a provider of life insurance and annuities, is being bought by Athene Holding, a specialist life insurer majority-owned by U.S. private equity company Apollo, Aviva said on Friday.
The sale price is below the $2.9 billion that Aviva paid for the U.S. business in 2006, but the insurer said the deal would make it financially stronger by reducing capital requirements and cutting its exposure to volatile credit investments.
Aviva’s economic capital surplus – the amount by which its capital reserves exceed its requirements – will rise by 1.1 billion pounds ($1.79 billion), the company said.
“The disposal of the U.S. business represents a successful end to the year and sets us up well for 2013,” Aviva chairman John McFarlane said in a statement.
Aviva shares were down 0.5 percent by 5:55 a.m. ET, against a 0.8 percent fall in the STOXX 600 European insurance share index <.sxip>. The stock has risen 27 percent since the start of the year, lagging a 33 percent gain for the sector.
The U.S. sale forms part of a plan launched by Aviva in July to sell or close 16 businesses that tie up over a third of the insurer’s capital while contributing just 18 percent of operating profit…”
Comments »News Corp Files With SEC to Split the Company
“(Reuters) – Rupert Murdoch’s News Corp formally applied to the U.S. Securities and Exchange Commission to separate its businesses into two independent, publicly traded companies.
News Corp said in June that it would separate its publishing and entertainment assets after shareholders pressed it to get rid of its troubled newspaper business.
A phone hacking scandal hit the company’s British newspapers earlier this year, forcing it to drop its proposed purchase of pay-TV group BSkyB.
The filing starts a process of providing details about the two new companies and the manner in which they will be separated, News Corp said in a statement.”
Comments »$MCD Offers Heartfelt Holiday Greeting to Employees
“Corporate strategists at McDonald’s are urging franchises to stay open this year on Christmas Day in order to boost sales. But fast-food workers won’t be earning any extra holiday pay for showing up on December 25.
McDonald’s already did the unthinkable last month when many of its 14,000 U.S. franchises were open on Thanksgiving Day, which resulted in an average of an extra $6,000 for each restaurant. That translated to a 2.5% corporate sales growth for November, a noticeable jump from the company’s 2.2% drop the month prior.
Being open on Christmas Day may produce similar numbers, according to McDonald’s USA Chief Operating Officer Jim Johannesen, who wrote in a memo that franchises operating on December 25, 2011, made about $5, 500 on average.
Low-wage employees at McDonald’s don’t receive holiday pay, however. Working on December 25 is strictly voluntary, the corporation insists.
That means those serving up Big Macs will earn the usual hourly wage, which according to the Food Chain Workers Allianceaverages about $9.65 an hour. ”
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Freddie Mac and Fannie Mae May Have Taken a $3b Hit in Libor Scandal
“U.S. mortgage finance giants Fannie Mae and Freddie Mac may have suffered more than $3 billion in losses due to manipulation of the benchmark interest rate known as Libor, according to an internal memo by a federal watchdog.
The estimate was provided in a memo that was sent to Freddie and Fannie’s regulator, the Federal Housing Finance Agency, by its inspector general. Reuters obtained a copy of the memo. The watchdog urged the regulator to consider whether the losses warranted a lawsuit against the banks that set Libor.
“We conducted a preliminary analysis of potential Libor-related losses at Fannie and Freddie and shared that with FHFA, recommending that they conduct a thorough review of the issue,” a spokeswoman for the inspector general’s office said when asked about the memo. “FHFA agreed to study the matter further.”
A FHFA spokeswoman said the regulator “has not substantiated any particular Libor-related losses for Fannie Mae and Freddie Mac,” and the regulator “has not made any determination regarding legal action.”
“We continue to evaluate issues associated with Libor and monitor Libor-related developments, recognizing that other Federal agencies are also involved in related matters,” she added…”
Comments »Ericsson to Take a $1.2 Billion Write Down, No Purchase of STM Micro Stake in ST Ericsson
“Earlier this week European Commissioner Neelie Kroes spoke in platitudes about how the EU would be putting more effort into kick-starting the region’s hardware industry — to create the ‘Airbus of chips.’ Her words seem particularly ironic (and possibly more empty) today, as the world’s largest telecoms company, Ericsson,admitted it would have to take a writedown of $1.2 billion (8 billion Swedish crowns) related to the decline of its European chip JV ST-Ericsson, as it tries to figure out what to do next with the loss-making business.
In a statement, Ericsson also said that it would not acquire the 50% of ST-Ericsson that it does not already own. “To acquire the full majority of ST-Ericsson is…not an option,” it said. That will, however, mean some $458 million more to keep propping up the company anyway in the next year. “Ericsson’s current best estimate is that the implementation of the strategic options at hand will require approximately SEK 3 b. of Ericsson funding, of which the majority in 2013,” it said.
Ericsson and STMicroelectronics first entered into their JV in 2009 with the aim of using their combined size to lead the market in wireless equipment chips. The aim was to be “fabless” — that is, designing the chips but outsourcing the making to other foundry companies — to beat down some capex and opex. But earlier this month, STMicro said that it would divest itself of its stake after ST-Ericsson failed to achieve break-even….”
Comments »Gapping Up and Down This Morning
BofA’s Moynihan Said to Kill Proposal to Cut Pay for Brokers
“Bank of America Corp. Chief Executive Officer Brian T. Moynihan blocked a proposal to cut the main component of most brokers’ pay for 2013, said a person with direct knowledge of the matter.
The plan would have reduced the so-called grid payout for Merrill Lynch financial advisers by two percentage points, the person said, requesting anonymity because it wasn’t made public. The changes, which would have affected advisers generating less than $1 million in commissions, were seen as a way to cushion the costs of new bonuses, the person said…”
Comments »UBS Faces Probe for Possible Misconduct on Hong Kong Rate
“UBS (UBSN) AG, which will pay $1.5 billion to settle charges with U.S. and U.K. regulators for manipulating Libor, is under scrutiny in Hong Kong for possible misconduct linked to the benchmark rate set in the city.
The Hong Kong Monetary Authority has started an investigation to see if there was wrongdoing by the Swiss bank in its submission of data for setting the Hong Kong Interbank Offered Rate, according to a statement from the de-facto central bank today. The HKMA is also reviewing whether the potential misconduct may have had a material impact on the rate…”
Comments »Ally Financial Repays $4.5B in Gov’t Debt
“Ally Financial has repaid $4.5 billion of debt owed to the government after it helped bail the company out during the 2008 banking industry meltdown.
Ally, which used to be called GMAC Financial Services, was the financial arm of automaker General Motors until GM sold its controlling stake in Ally in 2006. The government first invested in Ally in 2008, with the Treasury Department eventually gaining a 74 percent equity stake in Ally in December 2010.”
Comments »Solar Stocks Melt Up as China Announces Support for Consolidation and Bankruptcy Filings
“……….Leading the pack is Suntech, up 16 percent, followed by LDK up 12 percent. Yingli and Trina are both up 8 percent.
Ma reports China’s State Council (or cabinet) issued a statement pledging to reform the industry by encouraging mergers and acquisitions and banning local governments from supporting failing companies.”
Comments »U.S. Credits Markets Appear to be Expensive, (Chart Porn)
“One of the “side effects” of the Fed’s monetary expansion is all the capital flowing into spread products, particularly corporate credit. Corporate bond yields are hitting record lows across the ratings spectrum. An average junk bond in the Merrill HY index now yields some 6.3%….”
Comments »$FB’s Instagram Backpedals on Some Changes in Service Terms
“The uproar over Instagram’s new privacy and service terms drew a quick reaction from Facebook Inc.’s photo sharing unit Tuesday afternoon.
Changes in Instagram’s service terms announced this week sparked outrage onlineas users took them to mean Instagram was claiming ownnership and usage rights for any pictures on the service.
In a blog statement Tuesday afternoon, Kevin Systrom co-founder of Instagram, said the company would withdraw some of the new service terms, and sought to clarify other items.
“Our intention in updating the terms was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram. Instead it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.”
Comments »LTE Phone Shipments Will Triple To 275M Units In 2013, $AMZN Said to be Getting in on the Action
“We are far from global ubiquity for LTE and other 4G networks, but carriers in markets that have implemented the faster mobile data standard are seeing a boom in growth. Figures out today fromStrategy Analytics predict that shipments of LTE devices will hit 275 million units in 2013, a three-fold rise from the 90.9 million that have been shipped this year. And while a lot of this is being driven by strong competition among handset makers and carriers, Strategy Analytics predicts that the rise of 4G will bring something else to light: new entrants like Amazon and Mozilla also trying their hands at LTE devices.
“We expect Amazon to launch an LTE smartphone for the U.S. market around the middle of 2013. We think Amazon will want to get a ‘mobile shopping card’ into the hands of more consumers because the retailer wars are increasingly moving from the store, PC and laptop to the smartphone,” Neil Mawston, executive director at Strategy Analytics, told TechCrunch.
However, the analysts also emphasize that it will be a challenge for anyone to break the stronghold that Apple and Samsung have on smartphones at the moment. “Apple and Samsung will dominate the global LTE smartphone market in 2013,” Mawston added. “Like the 3G market this year, 4G will be a two-horse race next year. Most LTE smartphone rivals, such as HTC or Blackberry, have a lot of catching-up to do.”
The analysts stop short of predicting whether one single hardware maker will reap the biggest rewards, giving equal weight to the iPhone 5 and Samsung Galaxy S3 as two “popular models.” At the moment, Samsung is the world’s biggest smartphone maker, and largest mobile handset maker overall in terms of shipments.
Other handset makers that have invested in 4G models include LG, Nokia, HTC, Motorola, Blackberry, Huawei, ZTE and Pantech.
With LTE services slowly being rolled out both in developed and emerging markets (comprehensive list here), Strategy Analytics says it will be a mix of both developed and emerging will be driving the rise in shipment. U.S., UK, Japan, China and South Korea — where operators are “aggressively expanding” their LTE networks in fierce competition with other national carriers….”
Comments »Gapping Up and Down This Morning
$SIRI Appoint James Meyer as Interim CEO
“Sirius XM Radio has appointed James Meyer as chief executive officer on an interim basis. Meyer will replace Mel Karmazin, who has told the board of directors he will not renew his contract.
Meyer was previously president of sales and operations for the U.S. broadcasting company, which provides two satellite radio services.”
Comments »$GM To Buy 200m Shares Back From the Treasury to Facilitate Exit
“(Reuters) – General Motors Co said on Wednesday it will buy back 200 million of its shares from theU.S. Treasury, which intends to sell the rest of its stake in the company over the next 15 months, bringing to an end ownership that led many to dub the automaker “Government Motors.”
Chief Financial Officer Dan Ammann said GM will pay $5.5 billion, or $27.50 a share for the Treasury stake in a deal expected to close by year end. Treasury said it will sell its remaining stake of about 300.1 million shares “through various means in an orderly fashion” over the next 12 to 15 months.
Treasury said it intends to begin its disposition of its remaining shares as soon as January.
GM received about $50 billion from the U.S. Treasury as part of its 2009 bankruptcy restructuring in 2009 under the Troubled Asset Relief Program. The government bailed out GM and Chrysler Group in a move to protect jobs, a number it put at more than 1 million…”
Comments »Some Winners and Losers This Morning
$DKS Suspends Rifle Sales at All Stores
“We are extremely saddened by the unspeakable tragedy that occurred last week in Newtown, CT, and our hearts go out to the victims and their families, and to the entire community.
Out of respect for the victims and their families, during this time of national mourning we have removed all guns from sale and from display in our store nearest to Newtown and suspended the sale of modern sporting rifles in all of our stores chainwide.
We continue to extend our deepest sympathies to those affected by this terrible tragedy.”
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