Archive for August, 2011

The hypothetical Amazon tablet will take over the universe

A tablet-style e-reader from Amazon, the company behind the Kindle, would be immensely popular — to the tune of 3 million to 5 million tablets sold in the last three months of 2011 alone — if sold for under $300, “assuming it has enough supply to meet demand,” Forrester Research wrote Monday.

In addition to serving as an e-reader, the hypothetical Amazon tablet would be able to change diapers, trim trees, mix up a mean gazpacho and, when necessary, defend its owner with a double-barreled shotgun.

Just kidding. It can’t do any of those things.

How can just another tablet — one that Amazon has not confirmed even exists — prompt such an optimistic, multimillion-sales forecast? Earlier this month, the crowded tablet market forced Hewlett-Packard to pull the plug on its tablet. When HP Touchpad price tags were subsequently marked down to the very cheap $99, they sold out fast.

Forrester projects a low price point for Amazon’s hypothetical tablet because of “Amazon’s willingness to sell hardware at a loss.” Forrester Research, it’s worth noting, has maintained since April 2010 that “Amazon’s product strategists should ‘go head to head’ with Apple and create its own tablet.” As for the projected 2011 tablet, Forrester writes that a low price, “combined with the strength of its brand, content, cloud infrastructure, and commerce assets makes it the only credible iPad competitor in the market.”

Put that way, it sounds revolutionary. But put another and it might sound familiar: It’s like the Nook.

Barnes & Noble, like Amazon, has a strong brand and e-reading content. Its commerce assets aren’t only online but include actual brick-and-mortar stores. Its Nook Color tablet has a 7-inch color touch-screen, 8 gigabytes of storage and a stripped-down version of Google’s Android operating system. It costs $249.

Read the full article here.

Equities Down On Weak Data As Markets Await Merkel And Sarkozy

With economic data taking center stage, after a weaker-than-expected German GDP number, U.S. indexes sent an ambiguous signal, with industrial production rebounding, import prices rising, and housing starts falling.  U.S. equites opened in the red and remained there in early trading ahead of an all-important meeting between French President Sarkozy and Germany’s Angela Merkel.

The Nasdaq led the decline, down 0.8% to 2,524 by 10:41 AM in New York, followed by the S&P 500 which slid 0.7% to 1,196.  The Dow was trading down 0.4% to 11,432.

Worries that the U.S. economy continues to cool-off have given economic data renewed primacy.  Tuesday saw a series of indexes showing a mixed message.

The good news was industrial production, which jumped 0.9% in July, the largest increase of the year. Data released by the Federal Reserve came in above Wall Street’s consensus of a 0.5% increase as the auto sector rebounded on easing supply chain constraints in Japan.  Calling it “anticipated,” Barclays’ research team noted that 5.2% jump in auto production saw support from various other sectors too, particularly surprising were “stronger-than-expected gains in the volatile utilities and mining components, the former up 2.8%, the latter 1.1%.”

Read the full article here.

China Criticizes Washington for Debt Deal, But Continues to Invest in U.S.

China’s official news agency, Xinhau, which often voices the true feelings of the country’s political elite, described the recent battles over the Washington debt deal as a “madcap farce of brinkmanship”

The commentary, published in many Chinese newspapers, went on to warn the U.S. that it must implement more responsible policies if it is going to solve its problems.

And it warned the emergency debt bill thrashed out between Democrats and Republicans “failed to defuse Washington’s debt bomb for good, only delaying an immediate detonation by making the fuse an inch longer.”

China’s central bank did, though, welcome the debt deal. China is estimated to have foreign exchange reserves amounting to more than $3 trillion, much of which is denominated in the U.S. currency. It’s also the largest holder of U.S. Treasury bonds.

But in a statement, People’s Bank of China governor, Zhou Xiaochuan, warned that the U.S. must also keep in mind the interests of the rest of the world and, in particular, U.S. treasuries in which China is the largest holder.

“Big fluctuations and uncertainty in the U.S. Treasury market will influence the stability of international monetary and financial systems, thus hurting the global economic recovery,”  Xiaochuan said.

He went on to say China is looking to diversify further out of U.S. investments because of concerns over its debt.

“China’s foreign exchange reserves will continue following the principle of diversified investment, enhancing risk management and minimizing the negative impact of volatility in global financial markets,” Xiaochuan said.

It is, though, difficult to see where China could effectively invest its mountain of money anywhere else.

China has been looking seriously at Europe and the euro, and despite its problems, is believed to already have about a third of its currency reserves in euros now.

The European markets continue to be extremely important to China’s export economy.

China’s Foreign Minister, Yang Jiechi, who’s currently touring Europe, again voiced his concern Wednesday about the growing debt crisis there, which threatens now to engulf Italy.

“Currently, Europe’s sovereign debt problems are still unfolding. A few countries’ financial markets are still facing turmoil and debt risks are still very prominent,” he said.

China has been buying some eurozone debt and has promised to continue to invest in the region.

Foreign Minister Yang said, “China is a responsible investor in international financial markets, maintains its confidence in the eurozone and the euro, and has made Europe one of its most important markets for investment.”

Read the full article here.

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