Daily News Digest- 9th Jan'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• SpiceJet to Tank up on Cash Soon: Potential investors in SpiceJet, led by former promoter Ajay Singh, have submitted a rescue plan for the troubled airline to the civil aviation ministry that includes an initial investment by Saturday , January 10, and substantial equity infusion in a month's time, said a senior ministry official. The airline also renewed bank guarantees to the Airports Authority of India (AAI) worth about ₹ 15 crore, by another three months, a move intended to reassure the state-owned airports operator and the aviation ministry of the new investors' commitment to clear past dues. “The airline is giving us positive signals and if this continues, we should not have a problem in extending support in terms of payment of charges to airport operators beyond January 10. They have informed us that some money will come immediately and the total fund infusion will happen in a month,“ said the official cited earlier. “The airline seems to be on the path of recovery ,“ said the ministry official. The government had earlier told SpiceJet to clear dues to AAI by January 10. Sources aware of the matter say the airline may also see top-level management changes, if the funding plan is implemented as per the schedule presented to the aviation ministry .

• Retailers Add Food to Menu to Lure Buyers: When luxury lifestyle retailer Goodearth opens its new flagship store in Bengaluru this year, it will also house a restaurant serving fresh and organic food. Fashion designer Ravi Bajaj is re-doing the food section inside his clothing store in Delhi, with a focus on wine. Like Goodearth and Bajaj, a host of premium retailers, including Ogaan, Kitsch, Moonriver and Amethyst, are banking on food and drinks to give their customers a holistic shopping experience. “The concept, common internationally, is also catching up in India,“ says Bajaj, who is targeting sales of at least ₹60 lakh a month from the cafe-cum-restaurant to be launched next month. The food space in his shop, with a cover size of around 65 people, would complement his fashion business too. Three out of 10 Goodearth stores in India have theme-based cafes. “The idea was to provide an experience to the shopping and make the stores a place to hang out at leisure,“ says Simran Lal, CEO of Goodearth. Creating eating spaces not only becomes an additional source of revenue for these businesses, but also has a spill-over effect on their core businesses when some diners end up shopping as well.

• Vistara begins ops today with Del-Mum flight: Vistara, a TataSingapore Airlines joint venture, is scheduled to make its debut in the commercial airline industry on Friday with an inaugural Delhi-Mumbai flight, reports Manju V. The airline, with a fleet of three A320-200 aircraft, is initially set to operate 14 daily flights connecting Mumbai, Delhi and Ahmedabad. Its entry will benefit those hit by Kingfisher Airlines' closure. Vistara will bring back the popular `premium economy class' which is expected to plug the huge gap between economy and business fares.

• Aviation Sector Pitches for MRO Biz in `Make in India': The aviation industry is pinning its hopes on the Narendra Modi-led government's `Make in India' campaign to better exploit the potential of aircraft maintenance, repair and overhaul (MRO) business. Representatives of the industry have written to the aviation ministry as part of pre-Budget consultations to reiterate their demand of a cut in taxes in what it believes is a $700-million (₹4,400crore) a year opportunity. Industry executives say that high taxes and royalty charged by airports make the levies in India up to 50% higher than the global average and the domestic companies manage to get slightly more than just a tenth of the potential MRO business in the country .

• Infy CEO gifts iPhone 6 to 3,000 top performers: Infosys CEO Vishal Sikka played Santa Claus to top performers in the company during the holiday season. He gifted iPhone 6s to 3,000 employees, an unusual gesture for the company and perhaps part of an effort to stem the high attrition rate. The gift was accompanied by a mail from Sikka, where he addressed the employees as friends. The mail read: “Thinking back on 2014 feels good, doesn’t it? There was so much you wanted to accomplish with seemingly so little time to do it all. Now, as you stand on the brink of the New Year and look back, there is the satisfying realization that a great part of it actually got done. This feeling is not unlike the one Kahlil Gibran evokes in his lyrical commentary on work —‘When you work, you are a flute through whose heart the whispering of the hours turns to music’.” Sikka said achieving what Infosys had “took your boundless energy and extraordinary effort”. “And I believe it’s not enough that we simply recognize it, we must celebrate it. That’s why I am so happy that we are presenting you with a Holiday Bonus—the cool new Apple iPhone 6. A gift that’ll always remind you and your teammates of the exceptional value you delivered for Infosys,” he said. Sikka's “holiday bonus“ came as a big surprise to employees. One employee said they had not been indulged in this manner before.

• Google Cap invests in realty e-firm CommonFloor: Google Capital has invested in online real estate platform CommonFloor. This comes close on the heels of Softbank’s $90 million funding of Housing.com and Rupert Murdoch-led News Corp’s $30 million funding of PropTiger, indicating a growing appetite among investors for online property plays. Google Capital has invested about $10 million in CommonFloor, but sources said the Bengaluru-based venture may have received an additional commitment of $5 million. Last year, over two rounds in January and September, CommonFloor had raised $40 million from Tiger Global and Accel Partners. With Google’s money, its total funding to date has touched $60 million.

• Network18 sells multiplex business to Carnival Films: Network18 Media & Investments Ltd today announced the exit from multiplex business by divesting its stake in Stargaze Entertainment to Carnival Films for an undisclosed sum. Network 18's venture capital arm Capital18 Fincap said it has entered into an agreement with Carnival Films Private Limited to divest stake in multiplex operator Stargaze Entertainment, which operates multiplexes under the brand name of 'Glitz Cinemas'. "Capital 18 is a majority shareholder at Stargaze and the transaction, expected to be completed within the current financial year, will result in a profitable exit for Capital18," the company said in a filing to the BSE. With this stake sale to the south India-based company, Carnival Cinemas will now be the majority stake holder in Stargaze.

• Audi Tops Luxury Market Again, But Merc Closes In: In the battle among German marquee brands in India's luxury-car market, Audi AG has managed to keep its top position in 2014, though Mercedes-Benz has grown faster and narrowed the gap with the leader. Audi sold 10,851 cars and sport-utility vehicles in India in the past year, up about 8.5% from the previous year. Mercedes-Benz's sales rose more than 13% to 10,201 vehicles.Both had their best year in 2014. BMW has yet to release its sales numbers in India, but is forecast to come in third. For Audi, 2014 has been the second straight year when it topped the nation's luxury market. It was the seventh successive year its sales expanded in India, easily outpacing an overall local auto market that remains sluggish. “The sheer acceptance of our brand in this country is tremendous and we have lined up 10 new models for 2015 to maintain this growth momentum,“ said Joe King, head of Audi India. Mercedes-Benz is also planning a product onslaught and has lined up as many as 15 new launches for this year. 

• Idea Close to Signing Deal with Sixth Sense: Sixth Sense Media, a US-based mobile marketing and advertising software firm, is close to inking a sizeable deal with Idea Cellular to help India's third-largest telco boost mobile marketing revenues by leveraging its core network and customer information resources. Sixth Sense is majority-owned by US venture capital funds, JT Ventures and Second Alpha Partners. “We are trying to help Idea connect its customers to millions of local small and medium retailers through customised loyalty programmes by deploying our mobile marketing software platform, and in turn open new revenue areas like mobile advertising and mo bile retail for the telco,“ Sixth Sense Media CEO Thomas Thekkethala told ET. According to him, a carrier is ideally equipped to connect its customers to brands using its mobile channel as it has access to critical subscriber information such as average revenue per user (ARPU), gender and geographical location.The Sixth Sense CEO, however, declined to reveal the deal size, citing existing non-disclosure pacts with Idea.

• Obi Mobiles CEO Ajay Sharma Quits: Ajay Sharma, the India chief executive of Obi Mobiles, the handset company floated by former Apple Inc CEO John Sculley , has resigned from his role, marking a setback to a relatively new entrant with aims of making it big in India's fast-growing smartphone market. A person directly aware of the development told ET Sharma moved out of the company due to operational issues and flagging sales amid intense competition in a market that Obi entered in early 2014.When contacted, Sharma confirmed he had resigned but declined to give details leading to his exit. An email sent to the media relations agency dealing with the firm seeking details on Sharma's replacement hadn't elicited a response as of press time.

International:

• Samsung Tips First Annual Profit Fall in 3 Years Despite Better Q4: Global smartphone leader Samsung Electronics on Thursday confirmed expectations for its first annual profit decline since 2011, although a pick-up in the fourth quarter hinted that earnings may have stabilised in the short term. The South Korean tech giant lost market share for three consecutive quarters up to July-September, and analysts say the trend likely continued in the October-December period thanks to competition from Apple's new iPhones and cheaper Chinese rivals like Xiaomi. Still, expectations of healthy memory chip demand and improvements in the mobile business on the back of new midto-low tier smartphones are buoying hopes that Samsung has at last staunched the bleeding in quarterly earnings. “I think the company will show a turnaround,“ said CIMB analyst Lee Do-hoon, pointing to the positive outlook for Samsung's foundry and display panel businesses this year. Samsung said its fourth-quarter oper ating profit is likely to be 5.2 trillion won ($4.74 billion), beating a mean forecast of 5 trillion won from a Thomson Reuters I BES survey of 44 analysts.

• Nestle to Sell Frozen Meals Business to Findus Spain: Swiss food group Nestle said it had signed an agreement to sell its La Cocinera frozen meals business to Findus Spain as part of its ongoing portfolio review. The divestment includes La Cocinera brand and the Valladolid factory, where the frozen culinary products are produced, while the chilled dough products under La Cocinera brand are not part of the deal, the company said in a statement on Thursday. Nestle did not disclose the sale price.

• Qatar Airways Keen to Acquire Stake in IndiGo: Qatar Airways is keen to buy equity in IndiGo if the Indian carrier offers 49 % stake to it, a top official has said as he sought the opening up of the Indian aviation market for established airline companies. “If IndiGo offers us 49%, Qatar Airways would be extremely interested,“ Qatar Airways Group CEO Akbar Al Baker told reporters on the sidelines of the unveiling of the new Airbus A350-900 in Doha yesterday. He said that India should open up to carriers such as Qatar Airways as they are already established. “We would be able to deliver what they (India) want faster than all the new entrants in the Indian market,“ he said. “Qatar Airways will always have a very keen interest in growing in India and investing in the aviation industry in India,“ he said. However, he ruled out buying stake in SpiceJet or GoAir. He said IndiGo is the only efficient carrier in India but added that the country cannot depend on only one airline. Al Baker acknowledged the presence of Vistara and AirAsia in the Indian aviation market but said airlines don't grow overnight.

• Dunkin' Donuts to open 1,400 restaurants in China: Doughnuts-and-coffee chain Dunkin' Donuts said Thursday it would open more than 1,400 restaurants in China, Hong Kong and Macau in the company's largest development deal in its 65-year history. Dunkin' Donuts set the 20-year deal with Golden Cup Pte, a new joint venture between Philippines fast food group Jollibee Worldwide and Jasmine Asset Holding, the latter owned by Asian investment group RRJ Capital. Dunkin' Donuts, based in Canton, Massachusetts, currently has 16 restaurants in China. It said the opening of the first restaurant with Golden Cup is expected this year in the fourth quarter. "We are delighted to enter into this relationship with Jollibee and RRJ, a group with a proven track record of success in the quick-service restaurant industry in China and a deep knowledge of the consumer," said Nigel Travis, chairman and chief executive of parent Dunkin' Brands Group, in a statement. 

• J.C. Penney Closing 39 Stores in April: Shares of J.C. Penney Co. Inc. slipped slightly today following the retailer’s disclosure that it would close 39 stores on or about April 4. A spokeswoman for the company said about 2,250 store associates will get pink slips as a result of the move. The retailer typically completes its annual store review after the holidays and decides which sites to keep and which ones to shutter. While no other store closures are currently planned for 2015, the spokeswoman said the company is “constantly evaluating its store portfolio.” Penney's, which opened a store in Brooklyn, N.Y., in August, has no store openings planned for 2015, the spokeswoman said. 

Tech:

• Hike Steps into Voice Calling Space with Zip Phone Buy: Hike messenger made its first acquisition, buying free voice-calling company Zip Phone, which will allow it to launch free app-based calling services that are emerging as a key draw for users. Founded by Anuj Jain in the US, Zip Phone has developed a voice-calling app that works globally. “Zip Phone's technology will allow us to bring free voice calling to the market much faster. Incidentally, this is one of the top requested features from our users as well,“ said Kavin Bharti Mittal, founder and chief executive of Hike, in a statement. The companies did not reveal the size of the deal. Hike, which is a so-called over-the-top (OTT) service, is backed by Bharti Softbank, a joint venture between Bharti Enterprises and Japan's SoftbankCorp. Bharti Enterprises is chaired by Kavin's father and billionaire businessman Sunil Mittal.Launched in December 2012, Hike has more than 35 million users and has raised $86 million from Tiger Global and Bharti Softbank till date. Its competitors include Whatsapp, Viber, Wechat and Line.

• Google Loses US Search Share in Dec, Yahoo Gains: Google's dom inance of the US Internet search market slipped last month in the biggest drop since 2009 while Yahoo posted its largest share gain, as the companies grappled with the fallout of a search deal on Firefox browsers. Google's slice of the US search market fell to 75.2% in December from 79.3% a year ago, while Yahoo jumped to 10.4% from 7.4%, according to analytics firm StatCounter.

• Facebook Acquires Quickfire, a Video Compression Startup: Facebook is getting serious about video. Its latest statistics show a dramatic uptick in video watching on the social network and now it’s purchasing video compression startup Quickfire. QuickFire’s technology can quickly transcode a video to take less bandwidth for users, without a drop in video quality, which is a natural fit for the social network. The acquisition means that Quickfire will be winding down business operations and some team members will be joining Facebook. The move is good news, especially for Facebook users in countries where bandwidth is much more scarce.

• Duolingo for Schools Brings the Language Learning Platform into the Classroom: Duolingo has unveiled a new platform designed specifically for use in schools that promises to make it easier for teachers to keep up with students’ language learning progress. Although Duolingo for Schools is the company’s first formal steps to shift into the classroom, it follows the groundwork laid down by the introduction of the Duolingo Test Center in April last year. Duolingo said that the launch will consolidate the existing ad-hoc use of its consumer offering that already goes on in classrooms and provide a centralized platform for teachers to track progress. It’s also intended to aid the teacher in the job of teaching by helping to highlight where a student is struggling most. “The goal is to provide a personalized learning experience that gives each student and instructor immediate feedback in the classroom. This can free up teachers’ time to concentrate on difficult concepts, answer questions, and assist students falling behind,” Doulingo’s co-founder Luis von Ahn said.

• Apple's App Store Took Half A Billion In The First Week Of 2015: Apple has announced that the App Store set a weekly record in the first week of 2015, bringing in nearly half a billion dollars in spending on apps and in-app purchases. New Year’s Day 2015 was the biggest day of sales in the service’s history. That headline record follows what was, in itself, a record-breaking year for the App Store. Apple also announced today that billings from the App Store rose 50 percent over the year with apps generating $10 billion in revenue for developers.