The article by Jose Pagliery reports on the changing fortunes at Hewlett-Packard in the last quarter of the financial year. In the financial year ending, Hewlett-Packard finished with a very strong fiscal quarter marked by an increase in its shares. This remarkable increase was reported at 6%. This was higher than the specialists in Wall Street had expected with the revenue generated soaring above twenty nine billion dollars. This had a cascading effect on the share price index, with the prices beating specialist expectations. The technology company reported earnings of above one dollar (1.01) for every share for its investors. These results are very important especially in the growing concern that the company is losing in its attempts to still remain relevant in the technology market at the global scene.
These particular concerns were growing increasingly apparent when the company was replaced in the Dow Jones Industrial Average after it was dropped. This unprecedented happening was the first time the company was dropped and replaced from the Dow Jones Industrial Average since 1997 when the company joined. Other companies that joined the Dow Jones Industrial Average in the same period and have been performing exceptionally include Wal-Mart, Johnson & Johnson and Travelers. However, this strong and emphatic finish will serve to reiterate the resiliency of the company, especially in the exodus of consumers from laptops and desktops to tablets and i-Pads, products that are vended by its fierce competitor, Apple. This increased performance might be attributed to the five year plan by the company chief executive officer to augment research and development in the company’s products, with increased focus being shifted to cloud services and software.
However, there is need for sustained growth and improved performance if this is the case. In the article, this strong performance is contrasted by the internal environment at the company. For instance, its sales in personal computers decreased by 2% compared to the previous year. This shows that the company was also affected by the drop in the demand for personal computers that was experienced globally. Comparatively speaking, this performance was better than that of its competitors with personal computer sales decreasing by 8% globally. Additionally, back-end servers experienced rises in revenue in the amount of 2% while its enterprise unit dropped its sales by 9% compared to the previous year. It is noteworthy that this was the trend in the year and that similar divisions in other companies experience the same dip in sales.
The article by Mark Thompson illuminates on the woes of the housing sector in the United Kingdom. This article tells of the end to the cheap funding provided by banks for new mortgages. This is in attempt to preempt a mortgage crisis and the growing risk of a bubble in the property market. The prices of housing units have risen by 7%, and reportedly by a higher percent in London. This has caused panic and raised serious concerns that loan borrowers might experience difficulties in making the repayments. This is especially when the interest rates start to increase from the record low levels that they have been previously. Although the manager at the bank of England reiterated that the risks were manageable, any rapid and substantial increases in the prices of houses resulting in an increased build-up of house indebtedness might result in financial instability.
At present, the household mortgage debt is estimated at 110% of the annual disposable income, a figure that lies low of the peak at 128% that was reported in 2008. However, this figure is still significantly above the targets for the long term average. The implication of this is that in the coming year, banks in the United Kingdom will not use the “Funding for Lending” program any longer to access cheap credit to be used for personal loans and mortgages. However, of note is the fact that lending to business will remain unaffected even in the face of the changes. Nested in the changes, is the move by the Bank of England to award itself the power authority to vary the affordability criteria that borrowers will be subjected, and consequently expected to meet when applying for mortgages.
This move is meant to ensure that banks in the United Kingdom do not accrue excessive risks. It is also meant to ensure that prospective homeowners take up loans whose repayments they are able to service if circumstances in the market change. Analysts in sector argue that these measures are ineffective and do not encompass all aspects, especially because “Help to Buy”, an independent program that offers subsidized mortgages for individuals with small deposits is unaffected by the changes. These changes are bound to have a significant impact throughout the United Kingdom especially because borrowers have previously been able to acquire interest-free loans for a period of five years when purchasing newly-built homes.
The article by Philip Elmer-DeWitt tells of the battles between Samsung and Apple technology giants. In a previous suit, an original damage award had been issued in the region of 1.05 billion dollars. However, the award has now been decreased to 930 million dollars. Apple held that Samsung owed 380 million dollars while Samsung argued that it owed nothing in excess of 52 million dollars. However, after six days of trial and other deliberations, the sitting jury awarded Apple seventy percent of what it initially asked. This amounted to 290 million dollars. This ended the partial retrial of the case pitting Apple Versus Samsung.
This is a patent infringement trial that was tried in 2012 with a record damage award of 1.05 billion dollars judgment that found for Apple. Since the award of the record breaking 1.05 billion dollars in damages, the figure has seen several iterations. Damages on 14 products were vacated due to errors in the jury form. These vacated products represented 450 million dollars of the original award. Consequently, the vacating judge ordered for that portion of the trial to be done afresh. Apple pointed errors in the ways of the vacating judge, causing her to retract. Hence, a new trial was instituted to try for the thirteen products that represent 400 million dollars of the original award.
In this trial, the verdict came in favor of Apple awarding 290 million dollars in damages. In totality, Samsung owes Apple 929.83 million dollars for damages in patent infringement. However, the author notes that the wars between these two electronic giants are not about to end. This is noting that there is a second patent trial that sues for some of the products that Samsung has manufacture and sold in the period since the first suit was filed by Apple. These products include Galaxy S3. This trial is scheduled to commence in March of 2014.
Works Cited
Elmer-DeWitt, Philip. The verdict is in: Samsung owes Apple another $290 million. Fortune Magazine. 21 Nov. 2013. Web. 1 Dec 2013.
Pagliery, Jose. HP up 6% on strong quarter. Fortune Magazine. 26Nov, 2013. Web. 1 Dec 2013.
Thompson , Mark. U.K. moves to cool property market. Fortune Magazine. 28Nov, 2013. Web. 1 Dec 2013.
