Saturday, November 18

PS3 in Debu in US


Thousands camped outside stores on Friday to be among the first US buyers of Sony Corp.'s new PlayStation 3 video game player, but violence marred the debut when one man was shot in a robbery attempt.

But in many cities, with hundreds of gamers waiting outside stores, the wait turned into a social event. Finger food was showered upon weary shoppers outside Sony's midtown Manhattan store, while thumping music blared. Some turned discarded bags of shredded office paper into billowy chairs and a lamp shade sheltered one man from the rain. Investors are closely watching the PS3 launch as a key test of Sony's grip on the $30 billion gaming industry, particularly as it faces rising competition from rivals at Microsoft and Nintendo. Sony is expected to rake in millions of dollars in revenue on Friday alone, with about 400,000 units expected to be available, one week after the initial launch in Japan.

Data on how many consoles had been sold was not immediately available. Depending on the hard drive, each PS3 sells for either $500 or $600 and Sony aims to make 1 million units available in the United States by the end of the year. On Friday, hundreds of new PS3 owners made their own profit by reselling their $600 machines on Internet auction site eBay. As of midday, 564 had sold for an average price of $2,711, and 2,037 more units were on offer, according to eBay Marketplace Research. Outlying bids reached $30,000. The video game shopping frenzy will be capped this weekend by the debut of Nintendo's much-anticipated Wii console on Sunday. Some industry watchers predict the lines outside stores could be bigger than those that formed for the PS3 launch.

Angel Paredes, who waited four days through rain storms in New York, was the first to buy a PS3 in the United States, and vowed he would not put it up for sale. Kamau Romero, 24, an educator, who was No. 3 on the line, was not so certain."It would take a lot to get it out of my hands, but it is possible. You never know," Romero said.

The PS3 buzz is a welcome break after a tough year for Sony, following a recall of nearly 10 million of its computer batteries, delays in the PS3 and a growing price war in the flat-screen TV market. Sony is expected to lose money at first on each PS3 sale. The unit can also be used to surf the Internet, download video and music and play movies with a Blu-ray high-definition disc drive. But high production costs have dragged Sony's game unit into a deep loss for the year through March. Experts suggest each PS3 could last 10 years and go a long way toward helping Sony stay atop the gaming market, as well as make Blu-ray the standard for next-generation DVDs.

Russian Consolidation

The Great Russian Consolidation - The Mr.Putin Plan

The rise of mega companies is part of a concerted Kremlin effort to lend a competitive edge to Russian industry and extend its reach into global markets.

ON NOVEMBER 2, the Russian Government approved the merger of the country's main aircraft design and production assets, including MiG, Sukhoi, Ilyushin, Tupolev and Yakovlev, in a state-controlled United Aircraft Corporation (UAC). On the same day, the Government sent a bill to Parliament to clear the way for rebuilding the vertically integrated Soviet-era nuclear industry complex from what is today a fragmented assortment of commercial and state-owned enterprises.

The moves reflected Russia's new strategy of forming giant national champions capable of becoming global players.

A month ago two private Russian companies and a Swiss commodity trader announced a merger that would form the world's largest maker of aluminium. Russia's natural gas monopoly Gazprom earlier this year emerged as the world's third biggest company in terms of capitalisation after buying some oil assets.

Unfolding consolidation stands in sharp contrast with the policy of breaking up, bankrupting, and selling off giant state companies the government of President Boris Yeltsin pursued in the 1990s. The policy aggravated the economic crisis triggered by the collapse of the Soviet Union.

After taking over as President from Mr. Yeltsin in 2000, Vladimir Putin sought to reverse asset fragmentation. He began by consolidating the natural resources industry, the most viable sector of the Russian economy at the time. Gazprom led the way. The company, which claims to control a third of the world's natural gas resources, has diversified into oil production aiming to become the world's biggest energy company in a few years.

Back in the 1990s, way before he became Russia's leader, Mr. Putin wrote a paper for his Candidate of Science degree where he argued that globalisation "demands all possible state support for creating strong financial-industrial corporations with an inter-sector profile on the basis of resource extraction enterprises." These entities should be "capable of competing on equal terms with Western multinational corporations." It is this programme that Mr. Putin is implementing today. He has consistently pushed for consolidation in "strategic sectors" under state control.

"Resource extraction" was the first target of Mr. Putin's policy. Last year the Russian government raised the state's stake in Gazprom to a controlling 51 per cent. The Kremlin also promoted a medium-sized state-owned company Rosneft to become Russia's biggest oil company. Rosneft snapped up the main production assets of the private Yukos company crushed with back-tax claims last year and is planning more acquisitions. Thanks to Gazprom and Rosneft, the share of the Russian state in oil production rose from 10 to 30 per cent over the past three years, and may go up to 50 per cent next year.

The idea is to create 30 to 40 large holding companies in a range of fields in which the state will control at least 50 per cent of the shares. Following the pooling of aircraft-building assets, plans have been drawn up to consolidate nuclear energy, aircraft engine building, tank building, electrical machine engineering, and some other industries.

Mr. Putin's plan also provides for consolidated Russian companies to aggressively expand globally through mergers and acquisitions. This will help Russia to get access to Western markets and advanced technologies, which the West is still reluctant to share with Russia, even though the Cold War is long over and the COCOM lists of Western technologies banned for export to the Soviet Union have been abolished.

"We are still meeting rigid curbs on transfers of high technologies to Russia," Mr. Putin said.

Mr. Putin is encouraging Russian corporations to buy their way into European industry on a grand scale to form a giant highly competitive market encompassing the Russian and European Union economies.

Kremlin has a powerful instrument to help advance Russian corporate interests abroad — the country's vast energy resources. Mr. Putin made it clear Western companies would not get access to Russian oil and gas unless Russian industry — both commodity and manufacturing — was allowed to expand into Europe. A month ago Gazprom reversed its earlier plans to invite foreign partners for the development of the world's biggest gas field, Shtokman. Explaining the surprise decision, which dealt a blow to Western multinationals, such as ConocoPhilips and Chevron, Mr. Putin said Western companies had failed to offer comparable assets in exchange for a stake in Shtokman.

Moscow has demonstrated readiness to play it rough if its commercial interests are not taken into account by other nations. When the former Soviet state of Lithuania unwisely decided to sell its only refinery, which runs on Russian oil, to a Polish company rather than a Russian bidder, the Russian state oil transport monopoly, Transneft, just cut oil shipments to the disputed refinery citing pipe safety fears.

Russia's hard-nosed strategy is paying off. Earlier this year, Gazprom won a 50 per cent minus one share in Germany's BASF gas distribution network in exchange for a stake in the vast Yuzhno-Russkoye gas field in Siberia.

Internationalisation of the Russian corporate sector deserves closer attention from the Indian business community if it does not want to miss new opportunities on the Russian market. Aircraft building is one example. At the Airshow China-2006 earlier this month, Russia invited China to join forces with Russia's UAC to create an aircraft building centre on a par with Airbus and Boeing. Meanwhile, India is in a far better position to form such an alliance with Russia given their long successful record of cooperation in combat aviation. In fact, the head of Russia's Irkut aircraft corporation, Alexei Fyodorov, who has been appointed to lead the UAC, has consistently favoured India over China for strategic partnership in the aircraft industry.

Extracts from an article by Vladimir Radyuhin

Saturday, November 4

Reliance retail rolls out



Billing counters at the Reliance Fresh store in Banjara Hills got busy scanning barcodes as the Rs 25,000-crore Reliance Retail venture clocks its first day in business.

Its template, when translated into action, has all the trappings of creating a retail behemoth. The blueprint of Reliance Retail envisages covering 784 towns, spanning 100 m sq feet retail space and targeting a top line of Rs 1,00,000 crore by ’10-11.

Reliance Fresh, the 2,300 sq ft format, will stock high-frequency consumables. Its other formats like hypermarkets may spread across as much as 1,50,000 sq ft. The company is likely to trigger a regime of aggressive pricing in items of daily consumption as it competes with the mom & pop stores, cornerside vendors and rival retail chains.

Wednesday, November 1

HD goes Wireless

The world's leading electronics makers have teamed up to develop a wireless technology to carry high-definition video and eliminate some of the cable spaghetti that links televisions with set-top boxes and other equipment.

Seven companies were to announce Tuesday that they formed the WirelessHD Consortium to free high-definition TVs from the tangle of cables connected to cable or satellite boxes, gaming consoles, DVD players, or even camcorders and other portable multimedia gadgets.

Industry analysts predicted the first products to carry the WirelessHD technology won't hit the market until at least 2008.

The format is designed to work within ranges of up to 32 feet — and within the same room — using the 60-gigahertz radio frequency band, said John Marshall, chairman of WirelessHD.

It will transmit high-definition video that has not been compressed digitally so users should experience the same image quality they currently get with wired HD-capable video connectors.

The WirelessHD group has been working quietly for more than a year and aims to have the technical specifications completed next spring. It intends to integrate the technology into HDTVs and a range of other audio-video equipment, as well as make it compatible with other wireless and wired video formats.

Transmitting HD video seamlessly and wirelessly requires a large amount of radio bandwidth and poses technical issues involving picture quality and interference.

Though WirelessHD hasn't released full details of how its technology will work, the consortium claims it will deliver high-definition video at multi-gigabit data rates — faster than any other radio technology in development.

A few chip-maker startups, such as Radiospire Networks Inc., Tzero Technologies and Pulse-LINK Inc., are using a different radio technology to develop products to stream high-definition video wirelessly, O'Rourke said, but the adapter-like devices expected to use their wireless chips will likely cost several hundred dollars.