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<title>Europe Insight</title>
<link>/globalbiz/blog/europeinsight/</link>
<description>Read the European economy blog for Europe&apos;s insights. Read about European lifestyle, culture and technology.</description>
<language>en</language>
<copyright>Copyright 2008</copyright>
<lastBuildDate>Fri, 16 May 2008 08:32:56 -0500</lastBuildDate>
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<title>Israel&apos;s Garage Geeks Gather to Hear Google&apos;s Brin</title>
<description><![CDATA[<p>"The '60s gave us the Beatles, the '70s gave us the Doors, the '80s gave us Madonna, the '90s gave us Microsoft Windows, and this decade gave us Google. Ladies and gentlemen, please welcome Sergey Brin," announced Israeli tech sector guru Yossi Vardi. A cheer went up as the Google co-founder, who made a late night stop at a dilapidated warehouse in the seedy Tel Aviv suburb of Holon on May 15, made his way through a large crowd of Israeli tech entrepreneurs who call themselves "The Garage Geeks."</p>

<p>Brin, who shared the stage with a guitar-playing headless robot built by the geeks for fun, fielded a barrage of questions such as "Do you still write code?" and "Will you become Bill Gates when you grow up?" </p>

<p>The Holon warehouse is funded by two Israeli venture capital firms, Giza Venture Capital and Carmel Ventures, to give some of Israel's best tech entrepreneurs a place to build non-commercial projects that might otherwise never come to life. Vardi, who has partnered in founding more than 50 Israeli high-tech companies, including ICQ, which was sold to AOL for over $400 million, brought Brin there for a purpose: to convince him that there is so much creativity and entrepreneurship in Israel that Google (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=GOOG.O">GOOG</a>) needs to to do even more business there.<br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/israels_garage.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/israels_garage.html</guid>
<category>Technology</category>
<pubDate>Fri, 16 May 2008 08:32:56 -0500</pubDate>
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<title>Nobel Laureate Elie Wiesel Calls for World Leaders to Shun Iran&apos;s  Ahmadinejad</title>
<description><![CDATA[<p>The May 13 opening plenary session at Israeli President Shimon Peres' conference celebrating Israel's 60th anniversary featured an extraordinary mix of guests, including a long list of heads of state, scholars, religious leaders, Nobel laureates, philosophers, and media moguls.<br />
 <br />
One of the keynotes was given by Holocaust survivor Elie Wiesel, an accomplished writer and human rights activist who won the 1986 Nobel Prize for peace. Wiesel told the gathered world leaders that it is "a disgrace" that Iranian president Mahmoud Ahmadinejad is being received in capitals around the globe since he is threatening Israel with nuclear attack. "He should be <em>persona non grata</em> in any civilized society," says Wiesel.</p>

<p>Members of the audience included the current presidents of Albania, Angola, Burkino Faso, Croatia, Latvia, Poland, Rwanda, Slovania, Uganda, Slovakia, and Ukraine, as well as former British Prime Minister Tony Blair, former Soviet leader Mikhail Gorbachev, Vaclav Havel, the 10th and last president of Czechoslovakia, and former U.S. Secretary of State Henry Kissinger.</p>

<p>Wiesel acknowledged in his talk that Israel is not perfect, alluding to its many problems. But, he stressed, Israel does not want its dream to become anyone else's nightmare. "If Israel could make peace with Germany who is to say it could not do the same with the Palestinians?" he asked.</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/nobel_laureate.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/nobel_laureate.html</guid>
<category>Politics</category>
<pubDate>Tue, 13 May 2008 18:24:28 -0500</pubDate>
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<title>The Battle for Mobile Phone Customers in Africa</title>
<description><![CDATA[<p>The battle for Africa's largest cell phone operator, MTN is heating up. First, India's leading cell phone company, Bharti Airtel, announced it was in early stage discussion with MTN on May 5. Nearly a week later, media reports claimed the world's largest mobile phone company, Vodafone was planning to enter the fray, potentially offering as much as $39 billion for the African wireless operator. </p>

<p>On May 12, Vodafone, which already owns 50% of South Africa's leading cell phone player, ruled out such a bid. But a potential new contender has emerged: the United Arab Emirates' Emirates Telecommunications Corp., Etisalat. </p>

<p>Reuters reports that at a telecoms conference in Cairo Etisalat Chairman Mohammad Omran admitted his company is looking at MTN to expand in Africa.</p>

<p>The attraction of Africa is obvious. With markets in the U.S. and Europe saturated, the world's biggest cellular players are turning to Africa, <a href="http://www.businessweek.com/globalbiz/content/sep2007/gb20070913_705733.htm">the fastest growing mobile phone market worldwide</a>.<br />
 <br />
With fixed line phone service expensive in many parts of Africa, many Africans use cell phones instead. Increasingly, cell phones are used to provide mobile payment and other types of services, which are increasingly popular in rural parts of Africa where access to services such as banking is limited. </p>

<p>Back in 2004, a report published by International Telecommunication Union (ITU) report estimated it would take until 2010 at the earliest for cellphone subscribers in Africa to exceed 200 million. Today, two years earlier than anticipated Africa boasts more than 250 million mobile phone customers.</p>

<p>If Bharti wins the battle for MTN, it will create a cellular colossus with a sizeable presence in two of the world's fastest growing mobile markets: India and Africa. </p>

<p>It will also up the pressure on Vodafone. For the last few years, Vodafone has realized that its future growth depends on building up a better presence in these countries. Acquiring MTN isn't possible for antitrust reasons; unless Vodafone sells its stake in Vodacom. That, according to the company, is a nonstarter. </p>

<p>Instead, Vodafone's aim is to gain full control from Vodacom's other shareholder, Telkom South Africa Ltd. If the British cell phone giant intends to keep its leadership position, it will need to move fast to secure its place in Africa.<br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/the_battle_for.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/the_battle_for.html</guid>
<category>Breaking News</category>
<pubDate>Mon, 12 May 2008 10:06:38 -0500</pubDate>
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<title>Tech Industry Players Meet Up in Menorca</title>
<description><![CDATA[<p>Tech industry players from around the globe gathered on the Spanish island of Menorca May 8-11 at serial entrepreneur Martin Varsavsky’s "finca," a 340 hectare farm that overlooks the ocean. The property contains several restored 17th century houses with enough bedrooms to comfortably accommodate 65 guests.   </p>

<p>Varsavsky made his fortune by being a master at all kinds of networking. He built tech companies in the U.S. and Europe, including Viatel, Jazztel, and FON, and is an expert schmoozer. About ten of the guests were people that Varsavsky met while he attended the World Economic Forum as a young global leader. He also has connections with Skype, Google, and Silicon Valley techies. </p>

<p>The idea behind the gathering was for people from China, Japan, Europe, the U.S., and Latin America to brainstorm about net neutrality, carbon footprints, and business model issues. Attendees included lots of start-ups plus <a href="http://creativecommons.org/">Creative Commons</a> CEO Joi Ito, Megan Smith, director of Google’s new business development and strategy, <a href="http://technorati.com/">Technorati</a> CEO Dave Sifry, French blogger and entrepreneur <a href="http://loiclemeur.com/">Loic Le Meur</a>, and LastMinute.com co-founder Brent Hobermann. </p>

<p>Varsavsky, who was born in Argentina but is now based in Madrid, entertained guests with the story of how he came to buy the farm. Seems he was surfing the Internet on his laptop, looking at real estate listings, while sailing off the coast of Menorca, when he realized that that he was passing a property for sale. He phoned the real estate agents, met them on the beach, and took a quick tour. The place was in ruins and overrun by squatters. He persisted anyway and did what lots of other potential buyers could not: convinced the owner, an elderly Spanish general, finally to part with the land.</p>

<p>It has taken six years of the work but the effort was worth it. The landscaping and homes are stunning. Many of the conference attendees were looking forward to mountain biking, sailing and swimming but cold, rainy weather kept everyone huddled indoors. With so many geeks gathering in one place it is unsurprising that the WiMax signal--which was converted into Wi-Fi--was quickly overloaded by laptops, iPhones, and Blackberries. Those who weren’t feverishly blogging, e-mailing and dealmaking amused themselves playing Wii.     <br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/tech_industry_p.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/tech_industry_p.html</guid>
<category>Technology</category>
<pubDate>Sat, 10 May 2008 06:21:27 -0500</pubDate>
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<title>Klaus Kleinfeld&apos;s Comeback</title>
<description><![CDATA[<p>This month's Landing-On-Your-Feet Award goes to Klaus Kleinfeld, former Siemens CEO <a href="http://www.alcoa.com/global/en/news/news_detail.asp?pageID=20080508006228en&newsYear=2008">who on May 8 was named CEO of aluminum products maker Alcoa</a>. Kleinfeld <a href="http://www.businessweek.com/magazine/content/07_19/b4033074.htm">resigned the job at Siemens a year ago</a> amid allegations that the company had paid bribes to win foreign contracts. Though Kleinfeld wasn't implicated, Siemens' supervisory board apparently thought an outside CEO was needed to make a clean break with the past, and hired Peter Löscher from drugmaker Merck.</p>

<p>The Siemens scandal has been career death for dozens of top managers at the Munich-based company. Even those not accused of wrongdoing face criticism that they didn't have adequate controls in place to prevent misdeeds. But Kleinfeld, hired by Alcoa as COO last August, has obviously convinced Alcoa's board of director that their faith in him was well placed. Makes you wonder what he could have accomplished at Siemens if he had been allowed to stay.</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/klaus_kleinfeld.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/klaus_kleinfeld.html</guid>
<category>Companies</category>
<pubDate>Fri, 09 May 2008 10:07:20 -0500</pubDate>
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<title> Vodafone Deal Signals Change in Apple&apos;s iPhone Strategy</title>
<description><![CDATA[<p>On May 6, Vodafone announced that it will offer the iPhone in 10 new countries, including Italy, Turkey, Greece, Portugal, Egypt, South Africa, India, New Zealand and Australia, a boost for Apple at a time when its international iPhone strategy is under fire. But as Ben Wood, director of research at CCS Insight, points out, the four line press release from Vodafone is missing a key word: “exclusive.” </p>

<p>Up to now Apple has insisted on exclusive agreements with carriers, striking deals with AT&T in the U.S., O2 in Britain, Orange in France, and Deutsche Telekom in Germany. In exchange for exclusivity Apple takes a cut of the revenue that wireless operators collect for voice and data services each month, something no other phone maker is believed to get. But analysts have been <a href="http://www.businessweek.com/magazine/content/08_17/b4081000500950.htm">raising concerns that the iPhone may not translate as well overseas</a>, with sales sluggish in Europe because of the device’s high price and strong competition from Nokia and others. With the May 5 announcement Apple seems to have acknowledged that it needs to change its strategy.</p>

<p> </p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/_vodafone_deal.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/_vodafone_deal.html</guid>
<category>Technology</category>
<pubDate>Tue, 06 May 2008 12:16:15 -0500</pubDate>
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<title>Why DT&apos;s Obermann Might Make a Play for Sprint</title>
<description><![CDATA[<p>There's been lots of discussion since yesterday about the likelihood that <a href="http://www.businessweek.com/globalbiz/content/may2008/gb2008055_779933.htm?chan=globalbiz_europe+index+page_companies">Deutsche Telekom will try to buy Sprint Nextel</a>. A person who used to be closely involved with DT suggests one plausible reason by DT CEO Rene Obermann might try to do a deal: to impress his new boss. Ulrich Lehner, former CEO of household products maker Henkel, <a href="http://www.telekom.com/dtag/cms/content/dt/en/51612;jsessionid=290ABF7A5F47E3EC63D22A7A9A0637AB?archivArticleID=528876">was elected chairman of DT's supervisory board last month</a>. Obermann may well feel pressure to show Lehner and the rest of the board that he has some big ideas for improving DT's growth prospects.<br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/why_dts_oberman.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/why_dts_oberman.html</guid>
<category>Companies</category>
<pubDate>Tue, 06 May 2008 10:33:52 -0500</pubDate>
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<title>Carlos Ghosn, Plugged-In</title>
<description><![CDATA[<p>Running a car company isn’t always hard work. Taking a break from a meeting with journalists in a Portuguese resort, Renault-Nissan boss Carlos Ghosn hopped behind the wheel of a silver Nissan 350Z convertible and zoomed off for a drive along the rocky coastline west of Lisbon.</p>

<p>But it was electric cars, not sportscars, that Ghosn seemed most excited about during the  meeting in the town of Cascais on May 1 and 2. By 2010, Nissan expects to roll out the first in a new line of all-electric cars. Unlike past electric vehicles, with their clunky batteries and under-powered engines, Ghosn promises that these cars will not only be 100% emissions-free, but also easy and fun to drive. “We’re going to make a sexy car, [with] attractive design and good driving performance,” he says.<br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/05/carlos_ghosn_pl.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/05/carlos_ghosn_pl.html</guid>
<category>Companies</category>
<pubDate>Fri, 02 May 2008 05:00:11 -0500</pubDate>
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<title>Nokia and Design</title>
<description><![CDATA[<p>Just returned from an interesting day-long tour and seminar on Apr. 29 at Nokia's new design studio in London's Soho district. Nokia's head of design Alistair Curtis spoke about how the company's design efforts begin and end with people. He also noted that the biggest challenge facing the company's 300-plus global design team is the "reality of the digital world."</p>

<p>In the not so distant past, the end game of design for Nokia was the phone, Curtis says. Now the phone is a springboard to all sorts of services, he says. Developing relevant services, he believes, means creating an open platform. Then consumers can eventually bolt on applications as needed.</p>

<p>By far the most interesting discussion of the day was led by Nokia's human behavioral researcher Jan Chipchase and Younghee Jung, who will head up a new services and user interface design group in London. They spoke of the Future Urban project Nokia conducted over the last year looking at the mega-trend of urbanization. According to the United Nations, this year for the first time more people in the world will live in urban areas than rural. Nokia went to three cities, Rio de Janeiro, Accra, and Mumbai to get a better sense of what new services and new applications might emerge 15 years out based on this growing trend of urbanization.</p>

<p>One research method used was what Nokia calls "open studio." Working with local experts such as NGOs or even students, Nokia designers went into each city and set up a community based competition asking people to design their dream phone. The results were unusual and led to some interesting insights such as a star shaped phone designed by someone in Ghana that could house up to four different SIM cards, reflecting the local preference for using more than one operator in order to get better prices and coverage. For a look at 15 of the designs, check out this <a href="http://images.businessweek.com/ss/08/05/0501_dream_phones/index_01.htm">slide show</a> that we put up today.<br />
 <br />
Chipchase and Jung have traveled all over the world for Nokia as design anthropologists and their inisghts can be found on their personal blogs at <a href="http://younghee.com">http://younghee.com</a> and <a href="http://www.janchipchase.com">www.janchipchase.com</a><br />
        </p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/nokia_and_desig.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/nokia_and_desig.html</guid>
<category>Innovation and Design</category>
<pubDate>Wed, 30 Apr 2008 06:26:09 -0500</pubDate>
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<title>Is Britain&apos;s Labour Government Waking Up?</title>
<description><![CDATA[<p>Amazing! Britain's Chancellor of the Exchequer Alistair Darling is assembling a panel, including representatives from industry, to review the country's tax regime. It is tempting to say that he should have done this months ago. If so, Darling and his boss, Gordon Brown, might have avoided the series of tax pratfalls they have committed since Brown took over from Tony Blair as Prime Minister last year.</p>

<p>Their latest: Slapping higher taxes on Britain's lowest paid workers by abolishing the 10% bracket. A rebellion by Labour Party MPs forced them to agree to compensate those affected--with much loss of face for the Labour brass.</p>

<p>Darling also has hit expats with tax hikes and bungled a change in Britain's capital gains regime. Now, following the announcement that two companies, Swire, a pharma outfit, and <a href="http://www.businessweek.com/globalbiz/content/mar2008/gb2008035_917372.htm">publisher United Business Media</a>, would move their headquarters to Ireland for tax reasons, Darling is suddenly worried.</p>

<p>It seems to have dawned at last on Darling and Brown that tax hikes and other meddling might not be wise in the face of what may well be a credit crunch induced recession. Labour Party leaders are scrambling because they face the prospect of big losses in local elections being held across the country, including in London on Thursday. A major defeat this week will be seen as a precursor to an end to Labour's three-term hold on parliament in the next national elections.      <br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/uk_labour_shamb.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/uk_labour_shamb.html</guid>
<category>Economics and Finance</category>
<pubDate>Tue, 29 Apr 2008 11:46:58 -0500</pubDate>
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<title>Sorting Out Mobile Market Share</title>
<description><![CDATA[<p>Three different market research outfits came out with their estimates of first-quarter handset sales and market share rankings on the same day last Friday. Reading the three releases, it was easy to get confused about what really happened in the quarter. But a bit of analysis confirmed a couple of important trends.</p>

<p>First, Nokia clearly retained its No. 1 position (there was never any doubt about that) selling more than 115 million units for about 40% share. Nokia sales still remain greater than those of its next three rivals combined. Samsung grabbed a strong No. 2, Motorola sank further, LG gained ground, and Sony Ericsson shed a few points.</p>

<p>The difference in the market share numbers from the three researchers turns out to revolve entirely around their estimates of the size of the "other" category, which ranged from a low of 46.1 million units according to Strategy Analytics to a high of 55.7 million units per IDC. ABI Research pegged it in the middle, at 53.5 million.</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/sorting_out_mob.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/sorting_out_mob.html</guid>
<category>Technology</category>
<pubDate>Mon, 28 Apr 2008 14:50:44 -0500</pubDate>
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<title>Is Germany Headed for a Prolonged Slump?</title>
<description><![CDATA[<p>Germany finally seems to be succumbing to turmoil in global financial markets and the U.S. slowdown. The Ifo survey of business sentiment dropped more than expected in April, “revealing the first cracks in German companies’ robust confidence,” in the words of UBS economists. The question is whether Germany is headed for a prolonged slowdown, or just a temporary dip that will last until global demand recovers.</p>

<p>In the past, Germany overreacted to global economic cycles because of its over-regulated labor market, and because too many companies had too little profits and too much debt. However, Jacques Cailloux, Chief Euro Area Economist of The Royal Bank of Scotland, points out that Germany is a different country than it was during the last slowdown early in the decade. The labor market is more flexible, and German companies are leaner, more innovative and have healthier balance sheets.</p>

<p>While Germany and the rest of the world may still have to absorb some unforeseen shocks, there’s a good chance that Europe’s largest economy will bounce back quickly once the rest of the globe stabilizes. <br />
</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/is_germany_head.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/is_germany_head.html</guid>
<category></category>
<pubDate>Fri, 25 Apr 2008 10:50:59 -0500</pubDate>
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<title>British Banks Lose Challenge on Overdraft Fees</title>
<description><![CDATA[<p>On Apr. 24, British banks lost a landmark test case at the country's High Court over unauthorized overdraft charges. Now Britain's Office of Fair Trading is able to go ahead with an inquiry to establish whether bank charges for execeeding overdraft limits or bouncing checks, which can be as high as $70 each time, are unfair. The decision paves the way for a hearing in May to determine if the charges are unfair and if so, what a fair charge should be. </p>

<p>The initial ruling marks the first phase in a lengthy battle begun by the OFT. The regulator has long argued that the fees, which they estimate generate $7 billion a year in revenue for the banks, are much greater than the real cost of administering the accounts. After Britain's top five banks refunded $810 million to customers in the first half of 2007, the lenders and the OFT <a href="http://www.businessweek.com/globalbiz/content/jan2008/gb20080114_463416.htm">agreed to take the issue to court</a> to clarify the law.</p>

<p>The issue though, is far from being settled. The big banks are considering appealing and the OFT has yet to figure out what is a fair charge for so-called unauthorized borrowing. What the banks fear is that they could face compensation claims from customers dating back six years that could lead to payouts running in the tens of billions. Given the current shakiness in Britain's banking sector, that could be an enormous blow at the worst possible time.</p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/british_banks_l.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/british_banks_l.html</guid>
<category>Breaking News</category>
<pubDate>Fri, 25 Apr 2008 09:54:56 -0500</pubDate>
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<title>Gazprom May Take Control of BP Russian Venture</title>
<description><![CDATA[<p>It is thought that BP is increasingly coming around to the view that its 50/50 Russia joint venture, called TNK-BP, will eventually be controlled by Gazprom, the state-owned gas giant. At present BP owns 50% of the company, while three Russian businessmen own the rest. The partners' lockup agreement has expired, which probably accounts for part of the increasing pressure on BP from the Russian authorities.</p>

<p>The Russian state and Gazprom may be manuevering to soften the company up for future negotiations on price and control. BP wouldn't mind if its partners sell out to Gazprom. In the current nationalist atmosphere in Russia, a strong local partner is needed, and Gazprom certainly fits the bill. BP is also thought to assume that Gazprom will eventually take control of TNK-BP, not just 50%. (My colleague Jason Bush in Moscow touched on this in his interesting Mar. 20 story on a <a href="http://www.businessweek.com/globalbiz/content/mar2008/gb20080320_308159.htm">spy raid at the Moscow headquarters of TNK-BP</a>.) Local control is now considered hard to avoid because Russian law now bars non-Russian controlled companies from developing large oil and gas fields, which are deemed strategic.   </p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/gazprom_may_tak.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/gazprom_may_tak.html</guid>
<category>Energy</category>
<pubDate>Thu, 24 Apr 2008 08:02:03 -0500</pubDate>
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<title>Sony Ericsson&apos;s profits slump along with sales of 3G phones</title>
<description><![CDATA[<p>Sony Ericsson posted a 47% drop in first quarter profits on Apr. 23, reconfirming a slump in high end phone sales in Western Europe and North America and underscoring the challenges ahead for the company’s new CEO,  Hideki  “Dick” Komiyama. Financial analysts have been sounding the alarm about a drop in demand for high end phones ever since Texas Instruments, a leading supplier of semiconductors for mobile phones, <a href="http://www.businessweek.com/globalbiz/content/mar2008/gb20080312_486163.htm)">set off shock waves </a> on Mar. 10 by lowering its first-quarter growth estimates for sales of wireless chips and pinned the blame on weakening demand from a major customer for high-end chips used to power third generation (3G) phones. <br />
  </p>]]></description>
<link>/globalbiz/blog/europeinsight/archives/2008/04/sony_ericssons.html</link>
<guid>/globalbiz/blog/europeinsight/archives/2008/04/sony_ericssons.html</guid>
<category>Technology</category>
<pubDate>Wed, 23 Apr 2008 11:38:22 -0500</pubDate>
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