This week’s news reports contained both positive and negative news for specific individuals in the technology, business, economy, trade, and entertainment industries or sectors worldwide.
To begin, the technology sector is reportedly booming.
A testament to the thriving technology industry is the 3GSM World Congress, which took place in Barcelona and was attended by the world’s three largest cellular phone technology companies – Nokia, Sony Ericsson, and Motorola. These companies showcased their latest products at the fair, with the majority of them utilising cutting-edge 3G technology. Motorola introduced ROKR. Nokia has announced the upcoming release of the Nokia 6136. Sony-Ericsson announced the K610 phone and music player. Additionally, Sony Ericsson and Nokia will form a joint venture to develop cellular phone-based mobile television technology.
However, some consumers opt out of this new technology in order to take advantage of discounts and bargains associated with last year’s technology. However, this will not be the case this year as inventories are kept lean as a result of retailers and manufacturers’ new ability to share sales and inventory information. They can still obtain the best price, however, if the consumer is willing to exert effort and gain knowledge about the technology.
Another event that occurred last weekend was the twentieth edition of the Olympic Winter Games in Turin, Italy, which drew a slew of businesses. Under the supervision of the International Olympic Committee, businesses collaborated with Turin’s local government. They hope to gain international exposure by advertising their product on the uniforms of athletes competing in the sports event, by flooding television with commercials, and by plastering the venue with advertisements.
This week, companies announced joint ventures, downsizing, and takeovers.
Volkswagen announced over the weekend that 20,000 jobs will be eliminated between 2006 and 2008. They stated that they wish to strengthen their market position in light of fierce competition and declining markets. While the job cuts disappointed Volkswagen employees, investors cheered the decision, sending the company’s stock to a near three-year high. Additionally, the company anticipates a 61 percent increase in profit.
Lego Group and Lucasfilms Ltd., the owner of the Star Wars franchise, have agreed to extend their partnership until 2011. Lego acquired the rights to produce Star Wars toys in 1999. Lego earned more than $400 million during the release of “Star Wars Episode 1: The Phantom Menace.”
MySpace has partnered with SK Telecom and Earthlink, Inc. and Hello LLC to launch this service in the coming months under new ownership. The company will introduce a new service that allows subscribers to access MySpace via their mobile phones. Along with the launch of MySpace’s mobile phone access service, they will introduce the ‘Hero’ and ‘Kickflip’ phones, manufactured by Pantech and VK, respectively.
Nokia and Sanyo Electric Co. are forming a joint venture to develop a new generation of mobile phones equipped with CDMA chips and 3G technology. Nokia hopes to gain a foothold in the American and Japanese markets, while Sanyo seeks financial relief.
Arcelor intends to increase its dividend by 85 percent in order to ward off a hostile takeover attempt by Mittal Steel. Arcelor previously rejected Mittal’s bid and engaged investment banks to develop a defence strategy. Mittal, on the other hand, will be scrutinised by the European Commission if the takeover occurs.
However, a business has been entangled in certain situations but has already resolved them. Google has developed a Chinese version of its search engine that will adhere to Communist Party regulations. China’s government-commissioned 30,000 Internet censors aim to prevent citizens from accessing websites that feature or discuss sensitive Chinese policy issues. Although industry insiders were perplexed, Google’s compliance was consistent with their goal of capturing the lucrative Chinese market, which has over a hundred million Internet users.
This week’s weather also had an effect on businesses.
Residents of the Northeastern United States, including New York, experienced a snowstorm on Sunday morning, costing thousands of dollars in property insurance and forcing businesses to close on Monday. Hurricane Katrina wreaked havoc on insurance companies last September, causing more than $5 billion in structural damage.
Meanwhile, residents and authorities in New Orleans, Louisiana are preparing for Mardi Gras, the first since Hurricane Katrina devastated the city last August. While the city’s infrastructure is still being repaired, the event is expected to revitalise the city by reviving its tourism industry.
The US trade deficit also increased in 2005, as the US developed a strong appetite for imported goods and the price of oil reached a record high of nearly $71 per barrel less than five months ago. The US economy is also threatened by China’s rapid growth, as Chinese products enjoy a trading advantage due to their lower prices. The White House is also concerned about the growing deficit.
Europe, on the other hand, is doing better, with their market shares closing higher on Monday. Bank shares in Italy increased on speculations of consolidation between leading Italian banks and foreign banks such as France’s Banque Nationale de Paris Paribas and Spain’s Banco Bilbao Vizcaya Argentaria.
International organisations, too, are confronted with some difficult issues.
Since 1998, the World Trade Organization has charged the European Union with violating rules by prohibiting the import of genetically modified foods. The US, Argentina, and Canada, three of the world’s largest agricultural exporters, filed a complaint against the EU ban. However, social cause organisations such as Friends of the Earth have criticised the WTO’s recent action. They assert that Austria, Germany, France, Greece, Luxembourg, and Italy, which enforce the ban, have the authority to make their own decisions.
The Group of Eight Nations, the most exclusive club of developed countries on the economic and political stage, met in St. Peterburg, Russia, over the weekend for the first time to discuss the impact of rising oil prices on global economic development and energy supplies. Russia also assured the G8 that they would maintain their current level of oil and gas exports this year, despite Russia’s decision to cut off gas supplies to Ukraine and Eastern Europe. Additionally, the G8 discussed a new leadership for Palestine, which the US regards as a terrorist group, and the threat of bird flu in Asia and Europe.
Oil prices increased again on Monday after Iran, the world’s fourth largest oil exporter, resumed uranium enrichment and ended cooperation with the United Nations’ International Atomic Energy Agency. Iran is reportedly using uranium to build nuclear weapons and cooperates with international inspectors on an ad hoc basis. Nigeria’s protests against foreign oil companies and kidnapping of Royal Dutch Shell employees exacerbate the oil price situation.
Iran, the world’s fourth largest oil exporter, announced that it has terminated its cooperation with the United Nations’ International Atomic Energy Agency and will resume uranium enrichment activities. As a result, oil prices increased again on Monday. Iran is reportedly using uranium to build nuclear weapons and cooperates with international inspectors on an ad hoc basis. Nigeria’s protests against foreign oil companies and kidnapping of Royal Dutch Shell employees exacerbate the oil price situation.
China is also said to be more active in international trade.
China has purchased oil from African countries such as Algeria, Angola, Chad, Equatorial Guinea, Gabon, Nigeria, and Sudan to meet its growing energy needs to sustain its burgeoning industries. Certain countries, such as the United States, are threatened, however, due to their oil interests on this continent.
China and Australia met in Canberra in January to discuss the possibility of exporting uranium discovered in Australia to China and to ensure that the uranium supplies are not used to build nuclear weapons. However, environmentalists and the majority of Australian citizens warn of the destructive consequences, including greenhouse gas emissions and the possibility that China’s nuclear industry will become immune to international scrutiny in the future.
On a more positive note, the entertainment industry continues to thrive.
New Zealand’s film industry has exploded in popularity as a result of the success of films shot or partially shot in the country, including the “Lord of the Rings” trilogy, “Chronicles of Narnia: The Lion, the Witch, and the Wardrobe,” and Peter Jackson’s “King Kong.” As a result, funding for independent film production is increasing. Hollywood has now chosen to shoot films in this country due to the breathtaking scenery and the special premiums available to film studios.
Forbes magazine published their list of the World’s 100 Wealthiest Celebrities in 2004. They crowned Sir Paul McCartney, Sir Elton John, and Madonna as Hollywood’s wealthiest individuals. Additionally, it indicates that the music and film industries are thriving. The list also includes The Rolling Stones, U2, Greenday, The Eagles, Dave Matthews Band, Kenny Chesney, Celine Dion, and 50 Cent.