Monthly Archives: July 2010

John Gapper

Amazon is nothing if not relentless.

With the launch of the third generation Kindle – this time with a WiFi only model priced at $139 in the US – the Seattle-based company is reinforcing its leadership of the e-book reader market.

It faces competition from the multi-purpose Apple iPad, of course, but I still think there is a place for an E Ink screen device on which it is more comfortable to read books. Read more

John Gapper

It is no disrespect to Bob Dudley, the American who is about to become chief executive of BP, to note that were he British – or any other nationality – he probably would not be getting the job.

There is now a distinct possibility that BP will soon have not only an American chief executive but an American chairman too. Paul Anderson, a BP board member, has been mentioned as a possible successor to Carl-Henric Svanberg as non-executive chairman.

Mr Anderson, a former chief executive of both BHP Billiton and Duke Energy, was in the running to become BP chairman last year. As things turned out, it might have been useful to have him around. Read more

John Gapper

Oh dear. The results of the stress tests on European bansk – only seven out of 91 banks failed the tests compared with 10 out of 19 in a similar US exercise last year – are not reassuring.

Given that the European tests gave some leeway to national regulators across Europe to conduct examinations their own way, there was always a lot of scepticism about how rigorous the results would be. Read more

John Gapper

So much for the death of hedge funds.

Asset management, having been through a couple of tough years, is back to doing fairly well for itself – and that includes hedge funds – according to the Boston Consulting Group.

The industry as a whole is back from a nasty 2008 with global assets under management rebounding from $47,000bn in 2008 to $52,600bn. Even more importantly for those concerned, the post-crash squeeze on operating margins seems to be easing. Read more

John Gapper

It is rare to hear the senior management of a company insisting so forthrightly that it has little control over its own destiny, but that was the message emerging from Goldman Sachs today.

David Viniar, Goldman’s chief financial officer, was at pains to hammer home this point on the investor conference call following its poor second quarter results:

“Our mix of business in not driven by management and the board . . . it is really driven by what our clients are demanding from us . . . It was very, very largely reduced client activity [that caused a sharp fall in revenues]“

Mr Viniar was trying to counter the suggestion that Goldman’s results were due to poor risk-taking or trading with its own capital. Instead, he wanted everyone to believe that Goldman’s fate was largely out of its hands, since it rises and falls on the financial tide. Read more

John Gapper

Steve Jobs’ apology to customers who have bought an iPhone 4, and offer to supply a free case to alleviate any reception problems, was the right response but the way in which he delivered the message reduced the impact of his climbdown.

Mr Jobs looked exasperated by the fuss over the iPhone 4 losing reception when it is held in a certain way, and his body language and manner gave the impression that he was being forced into something that he did not really believe in. Read more

John Gapper

Companies controlled by the US government seem to have a lot of difficulty maintaining an amicable balance of power between their chairmen and their chief executives.

Harvey Golub’s abrupt resignation as chairman of American International Group after a stand-off between him and Bob Benmosche, AIG’s chief executive, is a second example of the phenomenon. Read more

John Gapper

Further to my column on Avandia suggesting that politicians should leave it to properly qualified regulators to decide on drug safely, the FDA advisory committee considering the anti-diabetes drug this afternoon decided against recommending that it is taken off the market.

That is something of a slap in the face to the politicians who I believe got ahead of themselves in declaring Avandia to be “a dangerous drug”, in the words of Rosa DeLauro, a Democratic member of the House of Representatives last month. Read more

John Gapper

Everyone makes mistakes but some mistakes are bigger than others and some are emblematic. On the latter scale, Apple’s problem with the iPhone 4 counts as a big error.

The iPhone 4 flaw, according to Consumer Reports and others, is that phone reception is degraded or lost when a user’s hand covers the bottom left of the antenna that encircles the device.

It is, in other words, a problem of industrial design for which Apple has a justly high reputation. Read more

John Gapper

The flurry of activity around Playboy Enterprises, owner of the eponymous magazine, illustrates the squeeze on men’s magazines and pornography in the internet era.

It also shows that Playboy is a media brand that is well past its prime.

Hugh Hefner, whose bid to take Playboy private is being challenged by FriendFinder Networks, the owner of Penthouse magazine, founded Playboy in 1953, astutely foreseeing the post-war rise of open sexuality.

Yet while some media brands such as Walt Disney have managed to update themselves for new times, Playboy – with its bunny girls and associations of the swinging sixties – is now archaic. Read more

John Gapper

Avandia, the GlaxoSmithKline anti-diabetes drug that could be taken off the market by the US Food and Drug Administration, is yet another illustration of the difficulties facing pharmaceutical companies in refilling their pipelines with blockbuster drugs.

Avandia’s fate seems already to have been sealed, since sales have been dropping since a 2007 study found an associated risk of heart attacks. If it was removed from the market, it would be the highest profile such event since Merck withdrew its painkiller Vioxx in 2004 on similar concerns. Read more

John Gapper

The gulf between US and global sports than today, with the world looking forward to the World Cup football final between the Netherlands and Spain and the US obsessed with LeBron James move from the Cleveland Cavaliers to the Miami Heat basketball team.

There are, of course, tussles between sports stars and their teams outside the US and there is anguish over the rise of individualism at the expense of national or team loyalty. Just ask the French football team or, to a lesser extent, the English one. Read more

John Gapper

There is a lot of uncertainty about the stress tests on European banks, the results of which are due to be announced on July 23. The question is whether the tests will be stringent enough to have credibility with investors or will be regarded as a whitewash.

I am not sure the statement issued on Wednesday by the Committee of European Banking Supervisors identifying the banks gives a great indication, but some details in the FT story are reassuring as to the  exercise’s seriousness.

The problem with the exercise is that CEBS is setting central guidelines for the tests but they will be carried out by national supervisors that have conflicts of interest. As I noted the other day, regulators will not want to declare banks undercapitalised if their own governments will have to pick up the bill. Read more

John Gapper

There are few equivalents in business of red carpet reporting – the showbiz practice of standing by the carpet at awards ceremonies and grabbing  words as the celebrities walk by. The Sun Valley media and technology summit, however, is just such an event.

Never having been there (although I did once go to Sun Valley when the Allen & Co annual conference was not in progress), I feel somewhat jealous of the reporters out there in the Idaho countryside.

On the other hand, as a way of obtaining information, it leaves something to be desired. Since the media are not allowed into the conference, they instead stand outside grubbing for morsels. Read more

John Gapper

I’m afraid I don’t believe Alex Bogusky.

Mr Bogusky, arguably the biggest creative name in advertising, has just resigned from MDC Partners, the parent group of Crispin, Porter & Bogusky, the Miami-based agency, saying he has had it with the business.

His Twitter profile now reads:

I worked in advertising for 20+ years. That was fun. Still enjoy culture jamming.

I count his departure as akin to Tom Ford’s resignation from the Gucci Group in 2004 after it was taken over by Pinault-Printemps-Redoute – a case of a world-renowned creative executive departing from the company that he had come to personify. Read more