How Microsoft blundered with the SkyDrive brand

News Analysis

August 2, 2013 03:00 PM ET

Computerworld - Microsoft must rename its SkyDrive online storage service after losing a trademark infringement case in a U.K. court.

Analysts and legal experts said that Microsoft's blunder would cost it dearly, and wondered how the American technology giant could have made such a mistake.

"It's unbelievable to me that Microsoft did not see this coming," said Peter LaMotte, an analyst with Levick, a Washington, D.C.-based strategic communications consultancy. "They should have seen it coming. And this is not the first time that this has happened to them."

LaMotte, who before he joined Levick had helped numerous startups with their branding efforts, was referring to last year, when Microsoft backed away from the "Metro" name to describe the new Windows 8 and Windows RT user interface and the apps that run on those platforms.

Microsoft dropped Metro in August 2012 after Metro AG, a Dusseldorf, Germany-based conglomerate that's the world's fifth-largest retailer, threatened the company. Microsoft has failed to find a catchy replacement for Metro: At one point it cited "Modern" as the new term, but then settled on the forgettable "Windows Store" to label the apps.

Microsoft and British Sky Broadcasting Group announced a settlement on Wednesday that "reflects the desire of both companies to focus on joint projects to benefit their customers," according to a joint statement. The agreement lets Microsoft use the SkyDrive name for a "reasonable period of time to allow for an orderly transition to a new brand." In return, the company pledged to drop its plans to appeal. Financial terms were to be kept confidential.

Sky provides television and broadband Internet service throughout the U.K. Among past offerings, Sky had operated a digital storage service, called Sky Store & Share, which opened in 2008 but shut down in late 2011.

A cornerstone of Microsoft's new strategy

SkyDrive, a cornerstone of Microsoft's service strategy, is integrated with a wide range of the company's software and hardware products, serving, for example, as the storage service for Windows 8, its Surface line of tablets, Office 2013 and Office 365, and the Xbox game console. Windows 8.1, the update planned to ship later this year, makes SkyDrive the default storage location for customers' files.

Microsoft is in the midst of a major reorganization, and determined to execute CEO Steve Ballmer's vision of the company as a devices-and-services vendor, not one reliant on packaged software. SkyDrive is an important part of the "services" part of that plan.

In a mid-July memo outlining the changes, Ballmer cited SkyDrive along with other services, such as the Bing search engine, the Skype Internet calling and chat service, Outlook.com and Xbox's online options. "They all deliver critical services that consumers need in the areas of insight and information, task completion, communication and fun," said Ballmer.

The broad reliance on SkyDrive means that Microsoft will incur significant costs to rebrand the service, requiring new URLs, new code in existing products and revamped apps for smartphones and tablets.

"We're talking serious money here," said LaMotte, who is familiar with rebranding costs from his time consulting with startups.

And then there's the money already spent on marketing SkyDrive as a brand, and pushing it as a name that customers recognize and associate with online storage. "This was a colossal waste of money for any marketing they did on SkyDrive," said Patrick Moorhead, principal analyst with Moor Insights & Strategy. "They might has well have flushed it down the toilet."

Due diligence?

What puzzled the experts was how Microsoft ended up here.

They unanimously agreed that Microsoft's legal team would have checked for possible infringing trademarks when it decided on SkyDrive as a name for the online storage service.

"Microsoft has an extensive and very good legal team, so it's highly unlikely that they didn't do due diligence," said Eric Priest, a professor of intellectual property law at the University of Oregon. Microsoft's lawyers would have run extensive and international searches, perhaps even hired an outside firm specializing in that task, to locate possible problems.

Source: http://rss.computerworld.com/~r/computerworld/s/feed/keyword/GreggKeizer/~3/B6NzowZcN-M/How_Microsoft_blundered_with_the_SkyDrive_brand

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Apple Reportedly Planning Next-Gen iPad Mini with Retina Display

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It's due out in the fourth quarter

Apple may be preparing an iPad mini with a retina display for the holiday season, according to a new report from The Wall Street Journal.?

Apple is reportedly looking to release its next-generation iPad mini in the fourth quarter of this year, and while some new features have been discussed -- like colorful back covers -- the main draw seems to be the addition of retina display.?

The original iPad mini, which was released in November 2012, had a 1024x768 resolution display. Apple is likely bumping it up to retina display in order to keep up with the likes of Google, which just announced its newest 7-inch Nexus 7 tablet with a higher resolution than the former.?

What's more is that Apple is leaning on Samsung to make its displays for the next iPad mini, which seems to be the opposite of what both companies are trying to accomplish -- distancing themselves from one another.

Apple plans to use Sharp and LG Display for its next iPad mini screens, but later added Samsung to the list to make sure enough displays are produced in time. Apple and Samsung may be competitors in the mobile device realm, but the fact is that Samsung has the capability to keep up with production and offer the quality Apple wants.

Apple and Samsung have engaged in a nasty patent war since 2011, which started when Apple accused Samsung of copying the iPad/iPhone for its Galaxy line. Between that and the fact that the Galaxy line has blown up in popularity -- making it Apple's main competitor in the smartphone/tablet sector -- the two haven't been getting along and are trying to put some space in their relationship.?

In October 2012, Samsung Display?-- which provided Apple with liquid crystal display (LCD) panels for its iPhones and iPads over the years -- officially severed its contract with Apple. Samsung cited cost as the main issue, since Apple has started using Samsung competitors with better prices for displays recently. Hence, Apple was expecting bigger discounts from Samsung.

Earlier this year,?Samsung's President of LSI business Stephen Woo said that it's crucial for the South Korean electronics maker to focus on alternatives to Apple when it comes to the chip sector.

?

"As there are just two smartphone makers that are doing really well, chipmakers supplying them have grown in tandem. So we plan to bolster our relationship with those key customers," said Woo.

"(We) should diversify our customer base and are making such efforts already, adding some Chinese customers. We see emerging players who have potential to grow in smartphones and we will continue to make efforts to supply them with our chips."

Source: The Wall Street Journal

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H&M joins battle for U.S. e-shoppers

By Anna Ringstrom

STOCKHOLM (Reuters) - Budget fashion retailer Hennes & Mauritz launched an e-commerce operation in the United States on Thursday, taking on rivals in the world's biggest online market.

The launch is highly anticipated and follows successive delays. But retail experts say H&M may struggle to make the kind of profits from U.S. e-commerce enjoyed by pricier rivals.

H&M has prospered in the United States without a big online presence and is mindful of the likely impact on profit margins of the high shipping and return costs associated with such a vast country.

However, with more and more shoppers buying clothes from home, the Swedish firm is speeding up its online roll-out to capture a slice of the growing market.

H&M has grown fast in recent years in the U.S., its second-biggest market, but has twice pulled back from announced dates for the online launch, blaming unexpected complexities in setting up an operation well integrated with its stores.

Meanwhile, its main rival Inditex and others such as online e-store ASOS have expanded in the market, while Amazon is pushing further into apparel after EBay prospered with its fashion offering.

"You don't want to lose out on being the port of call for younger shoppers. So H&M should really get in there," Planet Retail consultant Isabel Cavill said.

Apparel has become one of the fastest-growing online retail segments. H&M has e-stores in eight European countries and says they are now as profitable as its bricks-and-mortar shops.

In North America, a quarter of clothing sales will take place on the internet in 2030, up from 7 percent in 2011, Goldman Sachs predicts. Researcher Euromonitor International sees the U.S. online apparel market more than doubling in a decade to $41 billion in 2017.

"Generations of shoppers are growing up for whom the multi-channel is a basic expectation," said Kantar Retail consultant Bryan Roberts.

MIND THE RETURNS

H&M has been struggling to work out a viable logistics model in the country, where many shoppers expect free deliveries.

"H&M is low-price, quite low-margin and makes it work by selling very high volumes. An issue with that is very high costs for shipping and, most significantly, returns. It's a particular problem in the U.S.," Conlumino consultant Neil Saunders said.

Up to half of fashion items sold online are returned. At H&M, a shopper may well buy up to three times as many items than at Zara or ASOS. Analysts place average prices at Zara at least 40 percent above H&M's, with ASOS in between.

H&M's U.S. online store offers free shipping but charges for returns. Items bought online cannot be returned in stores.

"I'm particularly surprised by the lack of multichannel. Customers perceive retailers to be one company and these days demand multichannel offers such as buy online, pick-up or return in stores," Societe Generale analyst Anne Critchlow said.

"This looks like a 'soft launch' with the company perhaps hoping to limit the volume of orders initially."

All items on offer in stores will be available on the website, said Nils Vinge, head of investor relations at H&M.

Consultants and analysts say one likely way for H&M to support margins is to focus the website on its pricier garments.

There is pent-up demand for H&M online and the launch will make a buzz after the brand became well-known. But for a latecomer to an already crowded market, it may be a challenge to lure enough shoppers already used to other sites.

"H&M will need significant volume. That's absolutely key, and that is going to take time to build. It may take years to get to a good level of profitability, also because of the cost for the infrastructure," Conlumino's Saunders said.

Inditex and ASOS ship all goods straight from home markets Spain and Britain. H&M's model is one with regional hubs, meaning bigger costs when entering some markets, but shorter shipping distances. In the U.S., it has built a hub for the online business, the running of which it has outsourced.

Vinge said much of the marketing of the site would take place in social media and would also include cooperation with U.S. bloggers and a pop-up shop in New York.

Bank of America Merrill Lynch estimates H&M's online sales make up about 6 percent of group turnover, which last year amounted to 121 billion Swedish crowns ($18.5 billion).

Some consultants said that, for an even wider exposure online, H&M should also sell its clothes through one of the big one-stop online shops, along the lines of a recent deal between British discount retailer Primark and ASOS.

Vinge said the chain was focusing on rolling out its own online stores, but did not rule it out. "We are very very pragmatic. We want to be where our customers are," he said.

(Reporting by Anna Ringstrom; editing by Niklas Pollard and Tom Pfeiffer)

Source: http://news.yahoo.com/h-m-joins-battle-u-e-shoppers-082722925.html

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Pinterest Adds Price Alerts To Turn Aspirational Pins Into Purchases

Pinterest, which has long since served as a place where users collect items they want to buy as well as a leading referral source for e-commerce websites, is today taking another step toward encouraging users to not just aspire, but actually purchase the items they save with the debut of price alerts. The company explains that it's now iterating on its previously released "pin price" feature, which allowed users to see the current price of product pins on the site.

Source: http://feedproxy.google.com/~r/Techcrunch/~3/tND73udEpiA/

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Kodiak Oil sees lower Q2 profit despite sales gains

Kodiak Oil & Gas Corp. of Denver

Staff Denver Business Journal

Kodiak Oil & Gas Corp. saw a decline in profit in the second quarter despite a rise in sales.

The Denver energy company (NYSE: KOG) late Thursday posted net income of $44.3 million, or 17 cents a share, down from $93.1 million, or 35 cents a share, in the same period of 2012.

Kodiak said its reported Q2 earnings were boosted by 5 cents a share by an unrealized hedging gain. And its earnings in Q2 2012 were lifted by 25 cents a share by one-time items.

Oil and gas sales grew to $173.5 million in the most recent quarter from $85.8 million a year earlier. But operating expenses also rose sharply, to $110.3 million from $59.5 million a year earlier.

Analysts on average had expected adjusted earnings of 13 cents a share on revenue of $180.3 million, Thomson Reuters reported.

"We are pleased with the progress that we achieved during the second quarter," said Chairman and CEO Lynn Peterson. "We are on course to deliver accelerating production growth in the second half of the year and into 2014."

Kodiak closed in July on a $732 million purchase of 42,000 acres of producing properties and undeveloped leasehold in North Dakota's Williston Basin from another Denver company, privately held Liberty Resources LLC.

> Click here for Kodiak's earnings report.

Compiled by Mark Harden | mharden@bizjournals.com

Source: http://feedproxy.google.com/~r/vertical_16/~3/EeO8OnNmYhU/kodiak-oil-sees-lower-q2-profit.html

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Sharp posts quarterly loss, but sees sales up 33 percent on mobile LCD demand

Despite posting a small 15.36 million yen ($182 million) loss, it would be hard to call Sharp's latest Q1 2013 financial quarter anything but a success after last year's $1.2 billion debacle. After gaining investment from companies like Samsung and, more recently, Qualcomm, Sharp saw revenue up 32.6 percent to 607 billion yen ($6.2 billion) on strong LCD demand. In fact, sales of small- and medium-sized panels for smartphones and tablets were up a hefty 54.8 percent over Q1 2012, with its electronics division up 46.6 percent overall. The company thinks it'll hit a net profit for the fiscal year thanks to "high-value" 4K LCD TVs, Aquos phones in Japan and more IGZO displays for upcoming handhelds. If devices like a rumored Retina iPad mini with a Sharp-built display bear fruit, we may just believe it.

Filed under: Cellphones, Tablets

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Source: Sharp

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Transportation funding bill faces GOP opposition

WASHINGTON (AP) ? A measure awarding generous funding to road and bridge projects, community development grants and housing help for the poor is running into stiff Republican opposition in the Senate.

The bill appeared likely to fall prey Thursday to a filibuster by Republicans unhappy that the legislation breaks through budget limits required by automatic spending cuts known as budget sequestration.

"Voting for appropriations legislation that blatantly violates budget reforms already agreed to by both parties moves our country in exactly, exactly the wrong direction," Senate Minority Leader Mitch McConnell, R-Ky., said.

Far more austere companion legislation was pulled off the House floor Wednesday because, top lawmakers said, GOP leaders lacked the votes to pass it. The House Appropriations Committee chairman, Rep. Harold Rogers, R-Ky., said it was time to go back to the drawing board and come up with a compromise with congressional Democrats and the White House.

Taken together, the likely failure of both measures illustrates the shortcomings of the budget strategies by Republicans controlling the House and Democrats in charge of the Senate. At issue are the 12 spending bills passed each year by Congress for the day-to-day working of the government.

House GOP leaders pulled the measure from the floor after detecting opposition from both conservatives and more moderate members. Democrats were united against the bill and its steep cuts to Amtrak, transportation and housing programs, and community development grants.

"There are some folks that have a hard time voting for any appropriation bill and then there are some folks (for whom) this was probably a difficult vote ..., with Amtrak and block grants and stuff," said Rep. Tom Latham, R-Iowa, author of the transportation and housing measure. Aides to top Republicans like Majority Leader Eric Cantor of Virginia and Majority Whip Kevin McCarthy of California maintained that the measure was scuttled because there wasn't enough time in the House's crowded schedule.

Without a broader House-Senate budget agreement in place, the two chambers of Congress have been trying to advance starkly different versions of the 12 appropriations bills, with little success in the House and virtually none in the Senate.

The Senate measures have been drafted to reflect higher budget levels originally called for in a budget deal enacted two years ago. But that deal called for automatic spending cuts known as sequestration if lawmakers could not pass follow-up deficit cuts, and the House spending bills have been drawn to those sequestration levels, which are more than $90 billion lower ? a huge, unbridgeable difference in the approximately $1 trillion budget for daily agency operations.

Congress heads out of Washington this week for a five-week vacation, leaving the mess to be dealt with in the fall. GOP leaders had sought to set up a budget showdown this summer with the need to pass legislation increasing the government's $16.7 trillion borrowing cap. But the government's better-than-expected fiscal performance has delayed that showdown into the fall.

President Barack Obama says he won't negotiate over the debt limit like he did two years ago, a promise he repeated to his House and Senate allies in closed-door meetings on Capitol Hill on Wednesday.

The situation on the House and Senate transportation measures reflects the broader dysfunction in Washington over the budget. All sides want to reverse the crippling sequestration cuts, but a partisan impasse over tax increases sought by Obama and his Democratic allies and cuts to so-called mandatory programs like Medicare and food stamps demanded by Republicans shows no signs of breaking.

Cuts in the House transportation measure were made deeper by a Republican move to cut an additional $40 billion-plus from domestic programs and transfer the money to the Pentagon. That left the transportation measure $10 billion, or about 18 percent, below the Senate's bill.

Rogers, who typically is cautious in his public statements, issued an unusually harsh blast, saying halting debate on the House measure reflected a failure of Republicans to follow up on their promises to cut spending with binding legislation.

"With this action, the House has declined to proceed on the implementation of the very budget it adopted just three months ago," Rogers said. He said the failed transportation and housing measure was the first major attempt by Republicans to pass an appropriations bill at levels consistent with the sequestration cuts and said the failure of the bill meant it was time for a new approach.

"The House, Senate and White House must come together as soon as possible on a comprehensive compromise that repeals sequestration, takes the nation off this lurching path from fiscal crisis to fiscal crisis, reduces our deficits and debt, and provides a realistic topline discretionary spending level to fund the government in a responsible ? and attainable ? way," Rogers said.

On that, at least, there was agreement.

"The collapse of the partisan transportation and housing bill in the House proves that their sequestration-on-steroids bills are unworkable, and that we are going to need a bipartisan deal to replace sequestration," said Sen. Patty Murray, D-Wash., chief author of the Senate bill.

Source: http://news.yahoo.com/transportation-funding-bill-faces-gop-opposition-072244536.html

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