A California District Court jury in late August handed a stunning $1 billion victory to Apple in its complex patent trial with Samsung over smartphones and tablets. The case involved a countersuit as well as numerous products and company subsidiaries, but the result was that the jury found products of the Korean company and two of its U.S. subsidiaries infringed Apple's patents. Samsung is appealing and the companies are also fighting it out in other courts around the world. Such cases are likely to continue, since smartphones and tablets are the hottest-selling devices in tech and so much is at stake. Microsoft and Motorola -- now a Google subsidiary -- are also fighting their own battle over wireless and video coding patents.
Facebook's IPO fumble
With approximately 1 billion users, Facebook had the wind in its sails when it set an IPO price of $38 per share. But the offering in mid-May stumbled out of the gate and by the end of the month shares were selling for $27, about the same price they're going for today. The IPO hit a perfect storm, starting with Facebook's decision to pick a half-dozen investment banks to see the offering through, which could have made individual bankers feel less accountable. They then increased the offering price to an astronomical value relative to earnings. A Morgan Stanley analyst reportedly cut his revenue forecast for Facebook days before the offering, possibly breaching the law by telling only top clients, which may have caused some investors to back off. Finally, Nasdaq system glitches on the IPO day delayed trade notices, wreaking confusion. Perhaps most seriously, closer scrutiny of the company's finances exposed weaknesses in Facebook's mobile revenue strategy that the company needs to overcome to earn long-term success.
The Foxconn riot: trouble at the i-mill
On a September Sunday, some 2,000 workers rioted at a Foxconn factory in the Chinese city of Taiyuan that assembled, among other products, Apple's iPhone 5. Workers claimed that the riot was the result of an escalating brawl between assembly-line workers and guards. The fracas, which left 40 people hospitalized, became a symbol of unrest and poor conditions at the company, which also does work for Sony, Microsoft and Nintendo. There have been multiple suicides at Foxconn facilities. Apple itself had already come under fire after reports of hazardous conditions at suppliers, including Foxconn. Later, in a survey requested by Apple, the Fair Labor Association (FLA) said that though conditions were improving, Foxconn employees sometimes worked beyond 60 hours a week, were not always fairly compensated for overtime, and were subject to inconsistencies in healthy and safety procedures. Until factories get a clean bill of health, labor issues will continue to dog the big tech vendors.
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