These are stories Report on Business is following Wednesday, Sept. 28. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Keeping up with the Joneses Amazon.com Inc. today unveiled its low-priced offering in the tablet market, the $199 (U.S.) Kindle Fire.
With a 7-inch screen and Android operating system, it will be on sale in mid-November, to challenge the iPad from Apple Inc. just in time for the holiday season. There are also new e-readers. However, there's no camera or mike, and it operates via WiFi, rather than through a wireless carrier.
“Kindle Fire brings together all of the things we’ve been working on at Amazon for over 15 years into a single, fully-integrated service for customers," said chief executive officer Jeff Bezos.
Some observers believe today's device from Amazon - the company boasted of millions of movies, TV shows, songs, apps, games, books and newspapers available - may be the strongest rival to the iPad given the company's online power and pricing strategies. It's hard to beat $199.
"Amazon has an advantage that other tablet manufacturers don't in that millions of people already visit its site on a regular basis," analyst Ken Sena of Evercore Partners told The Wall Street Journal. "... It certainly creates a competitor to the iPad."
Having said that, Apple owns this industry, having sold millions of iPads in the tablet's young life. Compare that to the 200,000 PlayBooks shipped by Research In Motion in its second quarter. Hewlett-Packard Co., Samsung Electronics Co. and Motorola Mobility Holdings Inc. have also gone up against the giant.
Tablet sales around the world have surged, climbing more than 300 per cent in the second quarter of the year, according to research by International Data Corp., which expects more than 60 million such devices to be shipped this year. Notably, almost seven of every 10 sold are iPads.
- Amazon Kindle Fire tablet to sell for $199
- Amazon's tablet could have the best content ecosystem of any iPad challenger
- After Apple, will any company make a profitable tablet?
- Retailers slash prices on RIM's PlayBook tablet
- PlayBook offers insight into RIM's woes, future plans
- What to expect on Apple's new iPhone 5 next week
Yellow Media takes big hit Yellow Media Inc. is killing its dividend and taking a $2.9-billion goodwill hit in the third quarter, a move that sent its stock plunging further today.
The company said today that it will eliminate common share dividends, though the latest, announced last month, will still be payable in mid-October, The Globe and Mail's Susan Krashinsky reports. The money saved will be used to cut debt.
"We are decisively taking action to reduce our debt," said chief executive officer Marc Tellier. "The board, the management team and all our employees are focused on the successful transformation of Yellow Media toward a digital media company through the execution of our 360 Solution strategy."
The company has been taking a long, hard look at itself, and decided to take the big impairment charge in the quarter that ends this week.
"It is the result of a combination of factors, including the decrease in the Company's common share price and the pressure on EBITDA due to the accelerated transition from print to online, the uncertainties, if or when, new product introductions will compensate for the declining trend in print revenues and the lower margins from recent business acquisitions," the Montreal-based company said. It's also cutting its borrowing.
"While the elimination of the dividend will lower the pressure on cash use, the reduced banking facility and continued pressure on the company’s business from the decline in print continue to unbalance its financial position," said analyst Maher Yaghi of Desjardins.
"We continue to have little visibility on revenue and earnings beyond 2012. Until we are convinced that the road to positive organic growth is clearly established - which we are unable to forecast at this time - we maintain our view that trading in the shares is a speculative endeavour."
- Yellow Media cuts dividend, stock sinks
- Tim Kiladze's Streetwise: Yellow Media's debt is only half the problem
Europe's 'baptism of fire' Developments in Europe's debt crisis are coming fast and furious today. So far:
- EC President Jose Manuel Barroso, in his State of the Union speech to Europe's parliament, proposed a controversial financial transactions tax he said could bring in €55-billion a year.
- Mr. Barroso also called for a deeper a political and fiscal union. “If we do not move forward with more unification, we will suffer more fragmentation. I think this is going to be a baptism of fire for a whole generation.”
- Officials of the so-called Troika - the European Commission, the European Central Bank and the International Monetary Fund - said they will be back in Athens tomorrow to look at Greece's plans to slash costs, a step in Athens getting more bailout.
- The EU said finance ministers from the 17-member euro zone will hold an extra meeting next month.
- Finland approved change's to the monetary union's bailout fund, though a key vote comes tomorrow in Germany.
- Greeks are striking again, though that's not news. Today, it's public transport workers.
There's still more rumour and speculation than hard facts in Europe today, so it's no wonder investors are confused. Playing into that, as The Globe and Mail's Tim Kiladze and Brian Milner report, is a division among countries over the rescue package known as the EFSF, which leaders agreed to change in July but still must be ratified.
"Uncertainty in Europe remains high, with the two most relevant near-term issues being the upcoming parliamentary votes on the EFSF2 (which Finland approved today and Germany votes tomorrow) and what losses the private sector should bear for investments in Greek debt," said chief currency strategist Camilla Sutton of Scotia Capital.
"The fear is that a push (mainly from Germany) for more losses to be pushed onto the private sector will stem market uncertainty and create further downward pressure on European financial assets. Market price action suggests there is wide-based speculation that Europe is moving closer towards an agreement that would include a plan for bank recapitalization, an orderly default for Greece and that the EFSF2 will be passed."
Germany, which has been bankrolling the euro zone, is key to the future, and tomorrow's vote will be a key development.
“It’s pretty clear what will happen if Germany doesn’t approve funding for Greece," said Queen's University economics professor Thor Koeppl, who previously worked as a researcher at the European Central Bank.
"The markets are going to react badly. Even if they vote yes, it doesn’t solve anything. The patient is still sick, you are just putting a Band-Aid on him and you still have to operate, What we need to talk about is how fiscal policy can be harmonized and put under check in the euro zone. Fixing the pact for stability and growth won’t do much.”
- EU proposes 0.1% financial transaction tax
- Doug Saunders: Will the Tobin tax make or break Europe?
- European split dims hopes for Greek rescue
- EU division fears cap world market gains
OSC rules on Conventree A panel of the Ontario Securities Commission has found that Coventree Inc. and two of its senior executives breached securities laws by misleading investors in 2007 about underlying weaknesses in the asset-backed commercial paper market.
Following weeks of hearings late last year, the OSC issued a 153-page decision today that detailed extensive private communications between senior executives and other ABCP players about the increasing frail market for ABCP, The Globe and Mail's Jacquie McNish reports.
House prices climb Canadian house prices climbed 1.3 per cent in July from a month earlier, and now sit 12 per cent above their pre-recession peak, according to the Teranet-National Bank house price index released today.
Prices rose 2.3 per cent in Calgary, 1.7 per cent in Toronto, 1 per cent in Ottawa, 0.9 per cent in Vancouver and 0.5 per cent in Montreal. Prices fell in Halifax.
"House prices have climbed sharply in Canada over the last four months, and they are now 12 per cent above their pre-recession peak," said Marc Pinsonneault of National Bank.
"Even prior to that streak, houses were already expensive," he added.
Yesterday, Bank of Nova Scotia said growth in the real estate market has slowed, but not slumped as it has in other countries.
Toronto the good I know this is an obvious attack point for a bleeding heart, and I also know that governments at every level are scrambling to cut in the post-recession era. But still, getting rid of an agency that pulls together Christmas toys for underprivileged kids?
That's what Toronto's politicians decided yesterday with the Christmas Bureau, one of several measures to save about $28-million, The Globe and Mail's Elizabeth Church and Patrick White report. That's less than what had been proposed, and many things survived Mayor Rob Ford's quest to cut down the gravy.
Toronto is Canada's financial showcase, home to its banks and its premiere stock exchange, drawing business visitors from around the world. With a jobless rate of 8.1 per cent, is this really what we want to show the world?
In Economy Lab There’s another monetary union project whose viability has been dealt a death-blow by recent events, that between an eventual independent Quebec and the rest of Canada, Stephen Gordon writes.
In International Business Just as the devastation wreaked by the March earthquake and tsunami was spread over 18 of Japan's 47 prefectures, the burden of payment for reconstruction will be spread over companies, households and the government itself, The Financial Times reports.
In Globe Careers While we all might prefer to work for a saintly personality like Mother Teresa, when the going gets tough most people would rather be led by a self-serving toughie like Al Capone, a new study says. Wallace Immen reports.
In Personal Finance Electronic banking apps can do things like help you settle dinner bills with friends.
From today's Report on Business
- Nebraskans have their say in rowdy Keystone hearings
- RIM stock spikes over Icahn rumours
- The Law Page: Sinopec, the oil sands and justice delayed
- John Heinzl's new weekly column Yield Hog: Beware Trader Nation