Of course, there was the rather strange Broadway production at Radio City Music Hall that introduced the phone last month.

But that seems almost tame when compared with the recent India launch that included a Bollywood remake of Psy’s hit “Gangnam Style,” complete with references to the camera’s 13 megapixels and the screen resolution. (Thanks to The Next Web for bringing this to our attention.)

Here’s a taste of “Samsung Style.” Sorry in advance for any indigestion.

Photo Credit: eBay

But the CEO has done well during his tenure at eBay thus far, kickstarting the company out of a period of stalled growth, spurring the Marketplace and PayPal payments businesses and continuing to see consecutive quarterly growth.

To keep this up, Donahoe is singing the same tune as the rest of the industry: Focus on mobile and target international markets. We caught up with him for a bit this week, where he expanded on eBay’s ambitions.

On the Rise of Mobile and Spurring Engagement

“We know that mobile users are more engaged than non-mobile users. To keep that going, the simplest thing we can do is to just be present and continue to make it easy for our customers. To do that, we’re building useful, compelling mobile apps and making the registration process very easy.

“For us, the registration flow on mobile devices in particular is easier — the best one we’ve got. You’ll remember we bought Card.io (a startup that makes mobile purchases much easier). You can just take out your credit card, take a picture and boom — you’ve made an account.

“During that first three to 18 months after registering, we see a kind of ramp up to what they buy, and the frequency with which they visit.

“Second, it’s the multiscreen users that tend to be more engaged over time. For example, we’ve seen you browsing on your smartphone and then you buy an item on your desktop. That’s increasingly the wave of the future. You’re going to have screens on everything — your smartphone, your laptop, your car, your watch, almost anything with a surface.”

On International Growth

“Here’s some facts in rough terms. There’s more than two billion Internet users today, and that number will double over the next two years. Think about who’s going to make up those new users — 78 percent of those new users will be in BRIC and emerging markets. You gotta go to where the people are, and the majority of those people will be accessing the Web by the smartphone.

“They’ve become global Internet citizens, if you will, but they want to trade, and in many cases there won’t be a local e-commerce option. Russia, for example, wants goods and services that aren’t available there. So they’ll shop on eBay. Because such a large portion of our business is cross-border, we see many consumers coming in from these emerging markets.

“Again, that’s where our mobile leadership really helps. There’s a lot being said about mobile first right now. We’re not saying it, we’re doing it.

“We’ve launched Russian mobile apps. We’ve got a large team of mobile app developers. We bought Critical Path Software. We bought Duff Research. The innovation and the cycle time with which we can build innovative work is getting faster and faster.”

Over the last few years, India’s second-largest software exporter by revenue has been struggling to meet its own growth expectations as markets in the U.S. and Europe slow down and a new strategy by the company to transform itself into a high-profile consulting firm failed to work.

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As I noted in a piece last week about the departure of Yahoo Mail head Vivek Sharma for a new job at Disney, the Silicon Valley Internet giant is likely to see a lot more execs unhappy with the new regime of CEO Marissa Mayer take off after annual bonuses start being handed out in March.

Today, it’s James Carroll, SVP of the consumer and global platform group at Yahoo.

In the job, the former Microsoft exec has been in charge of the company’s global R&D centers in China, India and the Middle East and been “responsible for Yahoo’s content, social and membership platforms and the international delivery of all Yahoo! products and services worldwide.” That has included all its efforts at internationalization, international infrastructure development and localization.

Sources said he is leaving to head international at Go Daddy, one of the world’s biggest Web hosting and domain registration companies. Go Daddy is led by former Yahoo product head Blake Irving, who had hired Carroll at Yahoo in 2010.

And, as NBC announced earlier today, editor in chief of Yahoo News, Hillary Frey, has taken a job there as editorial director of news at NBCNews.com, which is undergoing a major refurbishment. She had been at Yahoo since late 2011.

Many more to come, I am told, as execs either decide to depart or Mayer continues to clean house. It’s still unclear who will be taking over these key jobs at Yahoo.

One thing for sure: I don’t expect a comment from Yahoo PR on the changes.

That’s the argument put forth by BTIG analyst Walter Piecyk, who says that Apple will debut a low-cost iPhone before the year is over, because it would be stupid not to. Piecyk, like many who follow Apple, sees massive untapped demand for a lower-end version of the company’s flagship smartphone. According to his back-of-the-napkin math, Apple could sell about 36.5 million such iPhones in fiscal 2014. And that could add $11 billion in revenue for the period, even after accounting for some cannibalization of the higher-priced models.

“We believe a product that addresses the more than 70 percent of global wireless subscribers that are unsubsidized pre-paid is necessary in order for Apple to grow its EPS next year,” Piecyk writes. “This is not rocket science and our belief is based on basic logic, not questionable ‘channel checks’ or trips to Asia.”

And that’s perhaps the best argument yet for the low-end iPhone. Why build it? Because at this point it’s stupid not to. The emerging market opportunity in China, India and elsewhere is simply too great. And while peddling legacy iPhones to price-sensitive customers has allowed Apple to tap into this market, it would likely be a lot more successful with a device designed specifically for it. What’s more appealing, paying bargain-basement prices for a two-year old iPhone? Or purchasing an inexpensive version of the latest model? Think of the low-end iPhone like the iPad mini, and the logic of that argument becomes quite clear. The iPad mini has become very popular, very quickly.

Sure, a low-end iPhone might reduce Apple’s profit margins, which it has been loath to sacrifice. It might complicate manufacturing processes as well, as some at the company have worried. But there’s little question that it would spike sales in emerging markets. Note that the iPhone has grown considerably faster in the U.S. than Android, and one reason for this is that the U.S. is one of the few large markets where Apple offers legacy iPhones as a low-end, free-with-contract offering. In other words, given the choice of a free-with-contract iPhone and a free-with-contract Android device, a lot of consumers in the U.S. are opting for the iPhone. As Asymco’s Horace Dediu writes, “One wonders what would happen if such price parity were present globally.”

Great question.

Some will argue that it’s not in Apple’s ethos to build a “cheap” product. That’s certainly true. So expect the low end iPhone to be a device worthy of that ethos, not something that undermines it. Again, think about what the company did with the iPad mini. As CEO Tim Cook said earlier this year, “Our north star is great products. … The only thing we’ll never do is make a crappy product. That’s our religion: We must do something great.”

RIM

Not yet, anyway.

“You will not see us getting into the $50 or $60 phone segment,” BlackBerry CEO Thorsten Heins said at the Communitech Tech Leadership Conference in Waterloo, Ontario, Thursday. “This is not BlackBerry. That segment will not serve our purpose.”

Which is not to say that BlackBerry doesn’t plan to build a BB10 device for more price-sensitive consumers — just that the Z10 is doing well enough in emerging markets, like India, that the company doesn’t yet feel compelled to roll out a cheaper, entry-level device. Better to sell the marquee device first, foremost and in volume than to spread yourself thin fleshing out the lower end of your portfolio too early.

Remember, BlackBerry 10 isn’t yet a well-established platform. It’s not the culmination of the company’s turnaround strategy, it’s the first move. And it’s perhaps the most important one of all: If successful, it will recast BlackBerry as a true rival to Apple and Google, not the also-ran that it’s in danger of becoming.

So, everything in its right time. BlackBerry’s road map includes less-expensive handsets, and the company will release them when it’s good and ready. Said Heins, “You will see new products being launched this year based on BlackBerry 10 that are more geared towards those lower price bands.”

Heins, who has been in the press a lot lately, talking up BlackBerry’s new make-or-break line of smartphones, told Spanish newspaper Expansion this week that the Z10 has been well-received by more than just the BlackBerry faithful.

“We are receiving a very positive response to BlackBerry 10 from our customers, but it’s also been attractive for customers coming from other platforms,” Heins told Expansion. “We are a little surprised by that.”

Happily surprised, I imagine. BlackBerry’s comeback hinges not just on convincing existing customers to remain on its platform, but also on convincing users of rival operating systems like iOS and Android to switch. The big question, of course, is, can the company convince those users to switch in meaningful numbers, and across a number of markets?

According to BlackBerry there are some indications that it can. Sunil Dutt, managing director for BlackBerry India, says that the number of BlackBerry switchers in the country has been significant. Said Dutt, “In a couple of markets where we launched first, about 45 percent of people who bought BB10 devices were unique customers who were using phones of some other brand.”

Forty-five percent.

That seems high for a new platform from a struggling handset maker, but it does jibe with what BlackBerry told AllThingsD last week. “We are seeing strong interest from consumers currently on other platforms, but can’t comment further on specifics,” BlackBerry spokeswoman Amy McDowell said. “While of course our loyal customer base is upgrading to BlackBerry 10, initial reports from Canada and the U.K. are encouraging, and data suggests a significant percentage of users are coming to us from iOS and Android, too.”

On Monday, BlackBerry began selling the Z10 in India for 43,490 rupees — about $805. That’s a price point that puts the device squarely in competiion with Apple’s iPhone 5, which starts at 45,500 rupees — about $844. An interesting move for BlackBerry, whose popularity in the Indian market has traditionally been driven not just by its widely used messenger service, but by handsets that were comparatively lower in price than those from Apple and Samsung.

Of course, as I’ve noted here before, price seems to be increasingly less of an issue for consumers in India. Earlier this month, IDC analyst Ryan Reith told AllThingsD that the research firm had seen “overwhelming demand” for the iPhone 5 in India. (Still an issue for some, though, according to Twitter.)

So the market for high-end smartphones in the country clearly exists. The challenge for BlackBerry is to convince consumers there that the Z10 and the BlackBerry 10 OS on which it runs deserve a spot in it. That might be tougher than expected for the company, whose share of the Indian smartphone market declined to about 5 percent last quarter. Not only is BlackBerry going up against Apple, which is expanding its presence in the country, it’s taking on Samsung, which has captured a 40 percent share.

But if the company is able to pull it off and tap deeply into the Indian smartphone market, the rewards will undoubtedly be great. IDC expects the Indian smartphone market to hit 108 million units in 2016, about five times its size now.

1.) Salesforce CEO Benioff Invites Laid Off Yammer Employees to Work for Him

2.) Microsoft Could Make Billions From Office for iPad

3.) Apple Working on Fix for iOS 6.1 Passcode Hack

4.) American Express Cardholders Can Now Tweet to Buy

5.) HBO to Finally Let Subscribers Stream HBO Go to TV Over AirPlay

6.) A Big Year for Apple’s iPhone in India

7.) Bill Gates on Philanthropy, Steve Jobs and the Microsoft Product That Never Was

8.) Yes, Intel Is Building a Web TV Service (A Box, Too)

9.) The Cloud’s Dirty Little Secret

10.) Apple MacBook Pros With Retina Display Get Faster, Cheaper

For more of the week in review, you should follow us on Facebook and Twitter.

Airtel

In the fourth quarter, iPhone shipments to India were about three to four times what they were in the third quarter, according to new research from IDC. And the research house expects them to grow roughly 150 percent year over year in 2013.

“We have seen overwhelming demand for Apple iPhone in India, not just for the latest iPhone 5, but also the lower cost previous versions,” IDC analyst Ryan Reith told AllThingsD. “It’s a huge market with great opportunity for Apple.”

The reason for this growth? The new iPhone 5, obviously. But also a more aggressive approach to a big market that Apple has typically shied away from because of its price sensitivity and a distribution model the company previously found unappealing.

In India, Apple sells iPhones on the open market, not through carriers that subsidize them and in so doing lower their selling price. And while India is among the fastest-growing wireless markets in the world, it’s also highly price-sensitive. That’s been problematic for Apple, which has traditionally been unwilling to cut prices to drive volume.

But recently Apple has been working with Indian distributors to offer installment-based payment plans for the iPhone. And it has significantly ramped up its marketing efforts in the country, in some cases working directly with distributors on advertisements. Apple did this with TheMobileStore, a national retail chain that operates 1,000 outlets across India, and CEO Himanshu Chakrawarti tells AllThingsD the effort was a success.

“Following the launch of iPhone 5, we met Apple, and both of us felt that we could significantly energize entry to mid-level smartphone buyers to upgrade to an iPhone,” Chakrawarti said. “[We ran a campaign] in January 2013 that was very successful. Our sales jumped about 200 percent.”

Evidently, Apple is seeing some decent early results from such efforts, though clearly it has its work cut out for it. The company has a piddling share of India’s smartphone market, which is currently dominated by archrival Samsung. But it seems to be working to change that — as much as it can afford to right now, anyway.

As CEO Tim Cook noted on Apple’s last earnings call, India is not as high a priority as certain other markets, like China.

“I love India, but I believe that Apple has some higher potential in the intermediate term in some other countries,” Cook said. “That doesn’t mean that we’re not putting emphasis in India — we are. We have a business there; that business is growing, but the multilayer distribution there really adds to the cost of getting products to market. So we’re going to continue putting some energies there, but from my own perspective, in the intermediate term there will be larger opportunities outside of there.”

The Indian government’s draft regulations, which were reviewed by The Wall Street Journal, would require that a substantial percentage of technology hardware purchased by government agencies and some companies — ranging from Wi-Fi devices to network switches — come from India-based manufacturers. Foreign players would have to swiftly set up local factories to market their products here.

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The proposed regulations, which were reviewed by The Wall Street Journal, would create an expansive “Buy India” mandate requiring a large percentage of the high-tech goods sold in the country to be manufactured locally.

Read the rest of this post on the original site »

Taj Mahal image via stockshoppe

Quick recap: In 2012, we saw Android take off like a rocket. India became Facebook’s second-largest market behind the U.S. And while 3G was slow to gain traction, price cuts and new marketing initiatives are giving it new life. These changes have led to major consumer brand marketers to finally start embracing digital and mobile media to grow their businesses.

With major industry influencers like Apple, Google, Facebook, Samsung, Amazon and Microsoft leading the way, it’s likely that India will continue its march forward toward becoming the world’s largest open “mobile-first” society.

Many times, it’s the day-to-day activities that cause the greatest inconvenience in India: long commutes and traffic, long lines to purchase a transportation ticket, lack of trust in the postal system, the dearth of organized retailers, overwhelming choice in local markets, the inability to conveniently access and listen to music on demand — the list goes on. In most cases, consumers didn’t recognize these as problems until entrepreneurial companies came around to solve them. People tolerated inferior experiences because they didn’t know what was possible. Companies like Flipkart, Myntra, Zomato, Olacabs, JustDial, MakeMyTrip and my own company, Saavn, among many others, are real consumer technology companies focused on solving real consumer problems.

2013 will mark the year Indian consumers wake up, finally become attuned to what is possible and start to voice their demands for services that make their day-to-day lives easier and more efficient. And the services that will succeed are those that — in the words of Steve Jobs — “just work.”

Here are the trends I’m seeing that put India on the road to consumer enlightenment in 2013. Note that my predictions for these developments in the coming year focus on the consumer environment and do not predict any government legislation, election results, macro economic changes, scandals or irrational outrages.

• Winner: Android. There’s almost no question that Android’s market share in India will double in 2013. There are now more than 125 Android devices across 17 global and Indian smartphone manufacturers, and these will continue to bring more and more Indians into the smartphone world.

  2012 saw the $100 price-point barrier broken; 2013 will see the $50 price point and a whole new set of consumers trashing their feature phones in favor of Android devices. Android was 30 percent of smartphone sales this year, and by the end of 2013 it will touch 60 percent. According to Nielsen Informate Mobile Insights, only nine percent of urban Indians have smartphones. That number will easily rise beyond 12 percent in 2013.

  Great apps positively change people’s lives, and more than 50 million people in India will have access to them in 2013.

• Winner: Facebook. India will become the largest consumer market for Facebook. As Facebook has continued to expand, the company has actively worked to get Indians on the Web, many of them for the first time. For many of these people, that first experience will be on mobile, and more specifically, it will be on Facebook. The current 65 million registered user base will double in 2013, putting India on the road to eventually becoming the number one market globally for Facebook. Given the number of holidays and festivals in India (and associated social events), it’s easy to see how Facebook and India are a near-perfect fit. And when it comes to providing an enjoyable experience for Indian users, Facebook is consistently on point.

  Facebook’s acquisition of Snaptu in March 2011 translates to a better experience for feature phone users. This is important in a country in which a significant chunk of mobile users still use feature phones.

  Indians who do use smartphones can now take advantage of Facebook’s new Messenger service, which launched earlier this month for select international markets, India included. Since it competes with messenger rivals WhatsApp, Kik and GupShup, the move is likely to attract more users in India, as well as solidify loyalty with existing ones. One or more of these rival companies will likely be acquired.

• Winner: 3G Data Consumption. 2012 saw India as the cheapest place to make a voice phone call, but the most expensive country in the world to transfer data. Carriers finally launched 3G in 2011, and through iteration and learning in 2012, they have realized that consumer utility and helping people do what they want to do in their day-to-day lives is the killer app of data. No one wants to be called a “dumb pipe,” and the carriers’ investments in next-generation networks will facilitate a rich ecosystem of free and paid consumer apps that improve people’s lives. Music, sports, navigation, social networking and messaging are examples of great reasons for consumers to opt for a data plan, and the carriers’ marketing campaigns will start to reflect that. While 3G settles in and prices continue to drop, the promise of pan-India 4G is still a year away.
• Early Loser, Potential Future Winner: Amazon. Domestic start-ups will take the e-commerce crown in 2013. Due to such a fragmented retail market, the unrelenting road traffic in urban areas and increasing middle class wealth, consumer e-commerce will continue its rapid ascent. According to TCS, the overall consumer retail sector stands at $500 billion domestically in India; $27 billion of that is modern retail. Apparel ($40 billion) and Consumer Durables and Tech ($35 billion) will be the fastest growing sectors online. Global brands such as Starbucks, Dunkin Donuts, Ecko, London Fog and LVHM will expand in the offline world.

  Amazon set the global standard for technology, experience and service in e-commerce. Now many firms in India, like Flipkart and Myntra, have built the infrastructure to deliver a similar experience and are primed to go public as e-commerce sales in 2013 will set a new record. Amazon will make a big move to India, but let’s see if it is organic or through M&A.

• Loser: Third Parties That Push in the Carrier Ecosystem. Over the years, mobile value-added services (VAS) have been marred by “transactionalists” who only care about taking money from the consumer through “instant gratification” and fraud, rather than by providing a compelling value in their offerings. In 2013, consumers will no longer be cheated into signing up for services they don’t want. All players in the consumer VAS world will focus on rolling out products that give the consumer a compelling value, and there will be a real shift toward operating in a “pull” instead of a “push” market. The same implosion happened in Western markets just a few years ago.
• Global Bailout: Nokia or RIM. Both Nokia and Blackberry have been out-innovated and out-maneuvered, mostly by the onslaught of Android-based devices. However, their widespread distribution continues to keep them in the game. Amazon and Microsoft now seem to be convinced by the end-to-end success of software/hardware integration, and an acquisition of at least one of these older players seems very likely in 2013. As a result of these moves, several tier-3 OEMS will be acquired or will go out of business beyond 2013.
• Early DNP (Did Not Play), Potential Future Winner: Apple. Most Apple products like the MacBook Air, iPhone and iPad are available in India. However, the most recent iPhone launches have a six-month lag before they hit the India market and burgeoning demand leads people to request that relatives bring them in from Western countries. Furthermore, the average income of Indians is $1,000 (or the cost of an unlocked iPhone), and while there is still a market of around 50 million people who could afford iPhones and iPads, the devices are unaffordable for the majority of Indians.

  Apple is a company with an acute awareness of market opportunities, however, and if it recognizes gold in the Indian market, you can bet it’ll figure out how to retrieve it. The fact is, Apple hasn’t made India a priority yet, and thus gets a DNP.

  But it can become a winner. We predict that in 2013, Apple will release older device models in international markets like India, or even begin manufacturing iPhones with the plastic from old MacBooks. Devices like these could run for as low as $100.

• Winner: Samsung Becomes India’s Apple. In Apple’s absence, Samsung’s pace of innovation, great consumer experience and a wide range of devices continue to bolster its leadership in product sales. At 15 percent market share of mobile handset sales, the company’s focus on India puts it very close to unseating Nokia (23 percent market share) at all ends of the spectrum in 2013. Over the next year, Samsung’s share of the smartphone market will increase from 40 percent to above 60 percent. Despite its size, there is a consistent focus on innovation in both products and marketing. Samsung’s nearly 100,000 retail touch points gives it great coverage, and its “Experience Zones” in malls and other high foot-traffic areas allow people to experience the power of its devices.

  Samsung’s only possible misstep would be to overextend its reach — for instance, if it started developing its own consumer apps for entertainment, navigation, video, etc., when it would be better to simply partner with the “best of breed.”

• Emerging Winner: Wireless Laptops. Wireless USBs for laptops will continue their mass market push. While there is an appetite for broadband in India, it is used by only slightly more than 10 percent of the 120 million monthly Internet users. Anyone who has been to India can attest to the rather chaotic nature of India’s city layouts, so you can just imagine what the wiring looks like below ground. The next step will be laptops with cellular capabilities built in like we see with the iPad.

Agree? Disagree? I’d love to hear your thoughts in the comment section below.

Vinodh Bhat is the CEO and co-founder of Saavn, the fastest-growing music service for South Asian music worldwide. He is also a Principal and co-founder of 212Media, a privately-held venture development company, which he helped launch in 2005. Follow Vinodh @vbhat on Twitter or check out his playlists on Saavn at http://www.saavn.com/u/vinbhat160.

In yet another instance of a Silicon Valley venture firm bringing in big government guns to class up the place, Khosla Ventures said that it had signed the international consulting firm run by former Secretary of State Condoleezza Rice to “bring global and domestic insight to Khosla’s portfolio companies, helping them achieve their strategic goals in industries such as technology, energy, security and healthcare.”

In other words, strategery plus!

That will presumably be provided by Rice and her partners at RiceHadleyGates, which has offices in Silicon Valley and Washington, D.C., in an undisclosed financial arrangement with Khosla. RiceHadleyGates also includes former National Security Adviser Stephen Hadley, former Secretary of Defense Robert Gates and former State Department official Anja Manuel.

In an interview yesterday, Manuel said that the goal was to help in areas that VCs might not be as familiar with, from Internet freedom laws in India to the challenges of moving into emerging markets.

“There are a lot of policy issues that entrepreneurs will be facing and we will try to be helpful as they sort through them,” she said. “We love working with innovative companies and want to make their global experience better.”

Khosla partner Samir Kaul said the firm was still figuring out how they will work together, but that Rice’s team would serve as “strategic advisers on an as needed basis.”

“What [RiceHadleyGates] does fits in very well with a lot of our themes as investors in energy and security, for example,” said Kaul. “We want to offer the companies we invest in as much help as possible and this is a real win in that regard.”

It’s certainly a high-profile move, although Khosla has done this before, signing former British Prime Minister Tony Blair on as a strategic adviser in 2010.

In addition, Andreessen Horowitz brought in former Treasury Secretary Larry Summers, as well as former D.C. Mayor Adrian Fenty, to lend its portfolio companies additional expertise.

Rice’s firm certainly has a lot of that, especially related to thorny international issues. Rice, who was once the provost at Stanford University, was also the National Security Adviser in the administration of former President George W. Bush, before moving to the State Department.

The move nearly doubles the iTunes Store’s international footprint, raising the number of markets it serves to 119. And while the service’s offerings will initially be limited to music-only in many of those countries — only Russia, Turkey, India and Indonesia will support movie and video purchases — it’s a dramatic extension of Apple’s reach as a distributor of digital media. The addition of India and Russia alone increases the company’s addressable market by 105 million Internet users. Apple has 435 million iTunes accounts with associated credit card numbers; after today’s expansion, how many more will it have this time next year?

So this is a significant move for Apple. Not only will it boost revenue for the iTunes Store business, which generated total net sales of $7.5 billion during the company’s most recent fiscal year, it also brings important new content elements to the developing Apple ecosystems in those markets.

The addition of music, movie and video purchases increases the value proposition of Apple’s hardware. Remember, when it first debuted, the iTunes Store wasn’t intended to generate profits so much as it was meant to sell hardware. And that’s still one of its more important functions today. Enabling content purchases in these countries gives Apple one more hook with which to pull consumers into its ecosystem and keep them there.

The expansion of the iTunes Store follows the debut last week of iTunes 11, a complete overhaul of the media software.

Here are the newest additions to Apple’s global marketplace:

1. Anguilla
2. Antigua & Barbuda
3. Armenia
4. Azerbaijan
5. Bahamas
6. Bahrain
7. Barbados
8. Belarus
9. Belize
10. Bermuda
11. Botswana
12. Burkina-Faso
13. Cape Verde
14. Cayman Islands
15. Dominica
16. Egypt
17. Fiji
18. Gambia
19. Ghana
20. Grenada
21. Guinea-Bissau
22. India
23. Indonesia
24. Israel
25. Russia
26. Saudi Arabia
27. South Africa
28. Turkey
29. United Arab Emirates (UAE)
30. Jordan
31. Kazakhstan
32. Kenya
33. Kyrgyzstan
34. Lebanon
35. Mauritius
36. Micronesia, Fed States of
37. Moldova
38. Mongolia
39. Mozambique
40. Namibia
41. Nepal
42. Niger
43. Nigeria
44. Oman
45. Papua New Guinea
46. Qatar
47. Saint Kitts and Nevis
48. Swaziland
49. Tajikistan
50. Trinidad and Tobago
51. Turkmenistan
52. Uganda
53. Ukraine
54. Uzbekistan
55. Virgin Islands, British
56. Zimbabwe

The SEC has alleged that during a period starting in 2005 and ending in 2007, employees at Oracle India had distributors keep some funds off the books. On 14 different occasions during the course of executing eight government contracts there, some Oracle India employees added some extra “margins” to deals they did with local distributors. (See the complaint here.) The funds piled up and were used to make payments to third parties, some of which proved to be either non-existent entities or storefronts.

The actions violated the Foreign Corrupt Practices Act. Oracle disclosed the violations to the SEC and cooperated with the investigation. The SEC and FBI started their investigation last year.

Oracle is not alone in this sort of thing. Last year, IBM paid $10 million to settle similar charges stemming from incidents in South Korea and China. And Hewlett-Packard faced its own in 2010 concerning alleged violations in Russia.

Here’s Oracle’s statement on the matter:

In 2007, Oracle discovered that a few employees of its Indian subsidiary apparently had directed distributors to maintain side funds in violation of Oracle business practices. Following a thorough investigation, the employees involved were terminated. Oracle disclosed the matter to the government and has cooperated with the SEC in its investigation, culminating in today’s announcement of a $2 million settlement.

And this from spokeswoman Deborah Hellinger: “Oracle has established policies, programs and controls to deter and detect inappropriate conduct that have been recognized among the best in our industry. We will continue to maintain a high standard of compliance and accountability for our business around the world.”

Here’s the full SEC Statement:

SEC Charges Oracle Corporation With FCPA Violations Related to Secret Side Funds in India
FOR IMMEDIATE RELEASE
2012-158

Washington, D.C., Aug. 16, 2012 — The Securities and Exchange Commission today charged Oracle Corporation with violating the Foreign Corrupt Practices Act (FCPA) by failing to prevent a subsidiary from secretly setting aside money off the company’s books that was eventually used to make unauthorized payments to phony vendors in India.

The SEC alleges that certain employees of the India subsidiary of the Redwood Shores, Calif.-based enterprise systems firm structured transactions with India’s government on more than a dozen occasions in a way that enabled Oracle India’s distributors to hold approximately $2.2 million of the proceeds in unauthorized side funds. Those Oracle India employees then directed the distributors to make payments out of these side funds to purported local vendors, several of which were merely storefronts that did not provide any services to Oracle. Oracle’s subsidiary documented certain payments with fake invoices.

Oracle agreed to pay a $2 million penalty to settle the SEC’s charges.

“Through its subsidiary’s use of secret cash cushions, Oracle exposed itself to the risk that these hidden funds would be put to illegal use,” said Marc J. Fagel, Director of the SEC’s San Francisco Regional Office. “It is important for U.S. companies to proactively establish policies and procedures to minimize the potential for payments to foreign officials or other unauthorized uses of company funds.”

According to the SEC’s complaint filed in U.S. District Court for the Northern District of California, the misconduct at Oracle’s India subsidiary – Oracle India Private Limited – occurred from 2005 to 2007. Oracle India sold software licenses and services to India’s government through local distributors, and then had the distributors “park” excess funds from the sales outside Oracle India’s books and records.

For example, according to the SEC’s complaint, Oracle India secured a $3.9 million deal with India’s Ministry of Information Technology and Communications in May 2006. As instructed by Oracle India’s then-sales director, only $2.1 million was sent to Oracle to record as revenue on the transaction, and the distributor kept $151,000 for services rendered. Certain other Oracle India employees further instructed the distributor to park the remaining $1.7 million for “marketing development purposes.” Two months later, one of those same Oracle India employees created and provided to the distributor eight invoices for payments to purported third-party vendors ranging from $110,000 to $396,000. In fact, none of these storefront-only third parties provided any services or were included on Oracle’s approved vendor list. The third-party payments created the risk that the funds could be used for illicit purposes such as bribery or embezzlement.

The SEC’s complaint alleges that Oracle violated the FCPA’s books and records provisions and internal controls provisions by failing to accurately record the side funds that Oracle India maintained with its distributors. Oracle failed to devise and maintain a system of effective internal controls that would have prevented the improper use of company funds.

Without admitting or denying the SEC’s allegations, Oracle consented to the entry of a final judgment ordering the company to pay the $2 million penalty and permanently enjoining it from future violations of these provisions. The settlement takes into account Oracle’s voluntary disclosure of the conduct in India and its cooperation with the SEC’s investigation, as well as remedial measures taken by the company, including firing the employees involved in the misconduct and making significant enhancements to its FCPA compliance program.

The SEC’s investigation was conducted by staff attorney Elena Ro and Assistant Regional Director Jina Choi in the San Francisco Regional Office. The SEC acknowledges the assistance of the U.S. Department of Justice, Federal Bureau of Investigation, and Internal Revenue Service.

Mohamed Elsayyed / Shutterstock.com

It is equally unsurprising, checking in a year later, that the momentum of entrepreneurship in Egypt, if anything, has increased amid the ups and downs of the macro economy and political uncertainty. “Generation Z” has come of age in Egypt like everywhere else, never knowing a time without access to information technology. They have at their fingertips communication and collaboration tools that allow them to innovate with friends from around the country, the region and the world. The cost of starting a business can be merely thousands of dollars in Egypt, and an ecosystem of angel and venture capital is rising in the region, as well as coming from Europe and the United States. Dozens of start-up competitions, hundreds of hackathons, thousands of new start-ups later, the entrepreneurs we have reconnected with believe there is no turning back.

No story is more encouraging than that of Amr Ramadan, whose company Vimov caught our attention last year. We were impressed that we were both users of Ramadan’s first consumer app, Weather HD, then the fastest and largest selling weather app in the Apple Store, with over 400,000 downloads at $.99 a pop — not knowing it had been built by him and three young guys in Alexandria, Egypt. Egypt-based venture capital firm Sawari Ventures — which has since launched one of the most successful incubators in the region, Flat6Labs — subsequently invested in Vimov in the midst of the turmoil of last spring without hesitation.

How are things today? “We are approaching our five millionth download,” Amr told us last week, “half of which are coming from the US. We also released Weather HD for the Mac, which stayed at the number two top-selling spot in the States during its week of launch.” They just released their most ambitious version on July 31 in the iTunes App Store, which is visually stunning and offers new features like “MultiForecast,” allowing users to see weather information from more than one weather provider. They have grown from three to 30 employees, all engineers from Amr’s home town in Alexandria, Egypt.

Navigating historic uncertainty was not easy, Ramadan notes. “We tried to take it slow in terms of growth after the protests of January 25, expecting the dust would settle in a few weeks. It quickly became apparent it wouldn’t settle down soon, and it wouldn’t be clear fast enough where the politics or economy would go.” Facing too many questions and scenarios, Vimov did what great entrepreneurs do around the globe: Hope for the best, plan for the globally competitive business they dreamed of, and execute. “Let me be clear,” he smiles, “[Revolution] causes tremendous pressure on top of that of simply being a start-up. One is always re-evaluating, guessing what could happen next, and building backup plans. But focus and execution is the only way; slow is not an option in the technology business.”

And execute they have. With growth rates that would be coveted by many in Silicon Valley, Ramadan has pushed his team to constantly redefine what a great weather application can be. Proud of their unique, graphic visual interface, they immediately improved navigation between the many cities their average viewers monitor. “We just launched Quickview, which shows weather animations of several locations all at once in a simple, elegant way,” he beams.

Weather HD’s Quickview

But can Egypt and the Middle East really play with the exciting innovation coming not only from the United States, but Europe, Israel, India, Asia and Latin America? For Ramadan, the now accepted precedent of innovation coming from all corners of the globe, even places once ignored, only suggests things could move faster in the Middle East. “Technology here is at its infancy, but that means there are opportunities around every corner,” he believes. “The reason why this huge market of some 400 million users has been under-served was that the young people were not encouraged to innovate, not from anyone around them, and they themselves had little hopes that a dream can come true.” He believes that this way of thinking has been forever shattered in the last year. “The number one motivator of great engineers is having great problems for them to solve,” he speaks as an engineer himself. “I have a world-class team at a fraction of the cost of what we could get in Silicon Valley — but we all love Alexandria, make great livings here, and are proud of building great products made in Egypt.” Thousands of other start-ups, he notes, have concluded the same all over the Middle East.

Neither Seth Goldstein nor Chris Schroeder are investors in Vimov.

Seth Goldstein @seth is a San Francisco-based angel investor and chairman of turntable.fm. Christopher M. Schroeder @cmschroed is a Washington, D.C.- and New York-based angel investor and former CEO of the online content and social platform start-up healthcentral.com, which he sold last January. He is writing a book on innovation and start-ups in the Middle East.

The memo, which has been reviewed by The Wall Street Journal, described a fourth-generation, or 4G, wireless service with “99.999%” network availability; “integration with an app store, ours or others” to help smartphone users order fast food or buy movie tickets; sourcing of mobile devices from China and Taiwan; content delivery to “3 screens,” cellphones, laptops and TVs; and two 300,000-square-foot data centers.

Nearly two years later, Mr. Ambani, chairman of the energy conglomerate Reliance Industries Ltd., is putting some of those plans in motion in the hopes of vaulting India to the forefront of wireless broadband technology and bringing millions of Indians online for the first time. But the project has already hit a few early roadblocks, and success is far from guaranteed.

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The probe, which could take several months to complete, is initially focused on AdWords — Google’s flagship advertising product and main source of revenue. But the agency conducting the investigation, the Competition Commission of India, could expand it to scrutinize other Google services if it sees fit, the officials said.

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He calls it “the highest-performing handset on the market, as far as we can tell.” It has taken a few years to get to this point, but there’s a two-billion-unit addressable market to be carved out.

In the video below, Otellini also talks about the competitive threat — though he seems not to consider it much of a threat at all — coming from Microsoft’s Windows 8 and its variant that will support chips running the ARM architecture. How much market share does he expect to lose? None. Intel’s chips can offer the same performance and power efficiency that ARM chips do, while being 100 percent compatible with existing PC software. See the full interview below:

Facebook filed an updated version of its S-1 public offering document today, which included somewhat disappointing first-quarter financials.

In the new filing with the Securities and Exchange Commission, its fourth update for its upcoming public offering, the social networking giant’s revenue was $1.058 billion, up 46 percent for the year, but down six percent from the previous quarter.

In the first quarter of 2012, Facebook’s net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

Facebook also said its current share price was $30.89 each, which values the entire company at about $77 billion.

Some investors might worry about the latest results, which show a slowing in Facebook’s torrid growth. But Facebook said the quarterly decline was due to seasonality — it was flat in the same period a year ago.

As it noted in the document:

“We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue. We expect that our user growth and revenue growth rates will decline as the size of our active user base increases and as we achieve higher market penetration rates.”

Its audience, though, was still growing strongly: Facebook also said it had 532 million daily active users, up from 372 million a year ago and 483 million in December. Its monthly active users were up from 680 million last year to just over 900 million and up from 845 million from December.

Facebook also added an explicit figure for average revenue per user, which was $1.21, up six percent year over year. It also said the number of full-time employees grew 46 percent from last year to 3,539 at the end of March.

The last update to Facebook’s regulatory filing for its mid-May IPO was in late March. That one gave investors more information about a patent infringement lawsuit waged by Yahoo — Facebook noted its counter claim in the newest filing — and also its motion to dismiss Paul Ceglia’s legal attempt to garner half of the company. It then included more information about growing engagement by users of the social networking site.

Along with some other minor changes in the new document, Facebook noted, in news that was already known, that it would trade its stock on the Nasdaq market under the ticker symbol “FB.” It also said it had bought photo-sharing start-up Instagram, another piece of old news, and noted its just-struck patent deal with Microsoft.

One new detail about Instagram: Facebook forked over “approximately 23 million shares of our common stock and $300 million in cash” to buy it.

Also, said Facebook, in an interesting new section on its global business:

“In the first quarter of 2012, 50% of our revenue was generated by users in the United States and Canada, a decrease from 54% of our revenue for the first quarter of 2011, and in 2011, 52% of our revenue was generated by users in the United States and Canada, as compared to 58% in 2010, as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia, and India.”

Here is the whole updated file, if you want to peruse yourself:

4thfbs1update

• 3G expands consumer audience by 100 million listeners

  Until now, most Indians have not had access to high-speed Internet or a PC. The wired broadband penetration of India stands at about 13 million subscriptions — which is a pittance, especially when you consider that this includes offices, cyber cafés and the like; and including institutions, there are only 50 million PCs in the country. Very few Indians have broadband or a PC of their own; this renders the historical paid download model (to a desktop or to a PC-tethered mp3 player) unscalable.

  Despite the lack of broadband and PC penetration, there are currently 121 million Internet users in India. Guess where they are? Mobile. With the rollout of 3G in India, access to high-speed Internet has become cheaper and more widely available. You no longer need to own a desktop computer to get online or, most importantly, to participate in e-commerce — all you need is a mobile phone.

  The mobile model — and by extension, the mobile music model — scales. It took broadband 7 years to reach 11.5 million wired subscribers. In less than half that time, 3G subscriptions in India topped 13 million, and that number is rapidly growing. There are 884 million mobile users in India, and as smartphones flood the market, more of them will be making the switch, becoming not just first-time smartphone users, but first-time Internet users as well.

  Already, 59 percent of mobile web users access the Internet via mobile only. A study by the Boston Consulting Group predicts that the total number of mobile Internet users will balloon to 237 million by 2015. It is connectivity, now more than ever.

  With the addition of over 100 million Internet-enabled potential users, it’s no wonder the Indian digital music industry is jumping for joy. 3G has brought a new generation of Internet users online, where music can be discovered, enjoyed, purchased and shared.

• Advertisers, rather than end users, are footing the bill

  Is there anything better than free? At last, the dream of ad-supported free music is a reality.

  Brands are embarking on the biggest consumer grab of the century as China’s and India’s multi-billion audiences rise in economic status. Thousands of brands are competing to become the future soda, life insurance and auto brands of this part of the planet. That’s a major influx of ad dollars looking for a scalable way to engage consumers.

  Asking consumers to shell out 15 to 25 rupees for a song online was unrealistic when pirated options were widely available for free. But as legal sites gain popularity and engagement numbers soar, major brands are ready to spend their advertising dollars on digital music Web sites and apps, so music services like Saavn can provide a large catalog of ad-supported music to end users for free.

  The benefits are abundant for the brand advertisers, end users and record labels; the end user gets something customizable and valuable for free, while major brands can finally capture the attention of one of the world’s largest emerging markets. Record labels can now pull in much larger profits from major brands while cutting their own costs of manufacturing, packaging and distributing physical products.

  So what made advertisers change their minds? Piracy. Until recently, the digital music industry in India was completely overrun by rampant piracy — a staggering 97 percent of digital music content was from pirate sites. This means poor quality without options of sharing and discovery for the user, no profits for the record labels and an unwillingness from brands to risk having their names on an illegal site.

  Thankfully for all parties involved, piracy is finally being addressed — in February, the High Court of Calcutta handed down the decision to ban the pirate site songs.pk on major ISPs. This kind of move reinforces for the industry and for consumers that the music pirates’ days are numbered.

  While pirated music is still an issue in India, legitimate and fully legal music streaming Web sites and apps are restoring the faith of advertisers, meaning a huge new audience for advertisers, profits for the music labels from brands with deep pockets and top-notch quality for users.

• Digital means data

  Labels are excited that they can finally reach audiences who are passionate about their niche content, thanks to the kind of targeting that digital platforms make possible from user data. It’s especially great for indie labels, who now have fast entry to market and an opportunity to get in front of the right audience, despite not having the major-label marketing moolah.

  Thanks to the wealth of data digital music supplies, the Indian music industry can get the right music to the right people at the right time. No need to make assumptions based on demographic information or guess what people will like. Data provides the ultimate customization tool for an industry in which customization and understanding the preferences and tastes of the end user is key.

  This is the moment the music industry has been waiting for; it can finally focus on its core business — producing music — while advertisers happily foot the bill. And users get to sit back and enjoy, share and discover for free.

Paramdeep Singh is the managing director and co-founder of Saavn, the fastest-growing music service for South Asian music worldwide. He is also a principal and co-founder of 212Media, a privately-held venture development company, which he helped launch in 2005. Follow Paramdeep @paramdeepsingh on Twitter.

And so, on Thursday, the company will debut in India the BlackBerry Curve 9220, a stripped-down 2G handset with a built-in FM radio, a two-megapixel camera, seven hours of talk time and a dedicated BlackBerry Messenger key. Price? 10,990 rupees, or $210 U.S.

For RIM, which in recent months has been discounting the prices of its smartphones in India to capture a larger share of the country’s growing smartphone market, the move seems a wise one. Targeting massive emerging markets like India with a smartphone specifically designed for them could do quite a bit to preserve RIM’s market share until it is finally able to bring its BlackBerry 10 devices to the rest of the world. CEO Thorsten Heins said as much during the company’s last earnings call, when he noted that the company planned to heavily subsidize a new line of low-end BlackBerry 7 phones. Presumably, the Curve 9220 is the first of those.

RIM plans to bring the 9220 to Indonesia — one of its most lucrative markets — in the coming weeks, as it extends the device’s reach and, hopefully, revenue along with it.

But there’s no denying the attraction of services like Amazon Web Services or Joyent or Rackspace, where you can spin up and configure a new virtual machine within minutes of figuring out that you need it. So, many companies seek to approximate the experience they would get from a public cloud provider on their own internal infrastructure.

It turns out that a start-up I had never heard of before this week is the most widely deployed platform for running these “private clouds,” and it’s not a bad business. Eucalyptus Systems essentially enables the same functionality on your own servers that you would expect from a cloud provider.

Eucalyptus said today that it has raised a $30 million Series C round of venture capital funding led by Institutional Venture Partners. Steve Harrick, general partner at IVP, will join the Eucalyptus board. Existing investors, including Benchmark Capital, BV Capital and New Enterprise Associates, are also in on the round. The funding brings Eucalyptus’ total capital raised to north of $50 million.

The company has an impressive roster of customers: Sony, Intercontinental Hotels, Raytheon, and the athletic-apparel group Puma. There are also several government customers, including the U.S. Food and Drug Administration, NASA, the U.S. Department of Agriculture and the Department of Defense.

In March, Eucalyptus signed a deal with Amazon to allow customers of both to migrate their workloads between the private and public environments. The point here is to give companies the flexibility they need to run their computing workloads in a mixed environment, or move them back and forth as needed. They could also operate them in tandem.

Key to this is a provision of the deal with Amazon that gives Eucalyptus access to Amazon’s APIs. What that means is that you can run processes on your own servers that are fully compatible with Amazon’s Simple Storage Service (S3), or its Elastic Compute cloud, known as EC2. “We’ve removed all the hurdles that might have been in the way of moving workloads,” Eucalyptus CEO Marten Mickos told me. The company has similar deals in place with Wipro Infotech in India and CETC32 in China.