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Oonagh Reidy

Harvey Norman Woes Worsen As GST Branded Impossible

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Top retailers including Myer, David Jones are in for a major shock at the tills as profits continue on a downward spiral.High street stalwarts including Harvey Norman, who are to announce profit results for their first half this week, are said to show further losses in earnings as the online consumer boom continues to bite.

Even as early as last November, warning signs were emerging with its Chairman Gerry Harvey stating that his business was “not looking good” blaming it on price deflation of flat-screen televisions and growing competition from online rivals.

“You are going to see a pretty sizeable fall in profit for the six months that we are in now and I don’t know how that is going to go in the next year,” he said.

And this looks to follow through with UBS analyst Ben Gilbert now predicting Harvey Norman will suffer net profit falls as high as 12.6 percent when it reveals its full results on Friday. 

Myer already suffered huge losses in sales of electronics goods in particular with total sales for the six months to January down 3.5 per cent. 

Even discounting giant Big W and Dick Smith, both owned by the Woolworths group, have cut their profit guidance for the full year, reversing stronger growth predictions.  

These losses comes as stores have been slashing prices and extending sales in a bid to lure consumers who have now discovered they can get cheaper deals at the click of a button. 

And this is not all the bad news beleaguered retailers now face. 

 

A retailers group, who late last year banded together to demand the government introduce a 10 percent levy on foreign goods ordered by online consumers, has now been dismissed by MasterCard as virtually impossible. 

The retailers group, which was headed by Myer, Harvey Norman and Solomon Lew’s Just Group, insisted the lack of GST on foreign goods ordered under $1000 was creating an unequal playing field and claimed the levy could be easily implemented via credit card payments. 

However, head of MasterCard Australia , Andrew Cartwright, has now dismissed this notion, saying “I think it would be difficult. Who is going to police this in terms of jurisdiction over foreign retailers?”.   

“There’s hundreds of thousands of overseas-based online shopping sites, so it would be very complex to police all of these online shoppers,” he said.

And the federal government has already indicated it isn’t going to budge on GST. 

Retail sales figures for December fell by 1.5 per cent according to the Australian Bureau of Statistics.

Retail Struggles As Online Alters Game, Warns CBA

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Retail sales the biggest business casualty in April, sliding 1.4 percent with sellers facing an uphill battle


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The drop was the biggest fall of all industry sectors, according to the latest Business Sales Indicator (BSI) from Commonwealth Bank.

The retail weakness also acted as a drag on April’s overall sales, which excluding the drop, recorded a 0.3 per cent gain in April. Car sales were also down 0.4 per cent.

 “The retail sector is clearly struggling,” said Commonwealth’s Matt Comyn who also blamed online e-tailing as altering the game rules and traditional bricks and mortar business model.

 And it’s an “uphill battle” he admitted with cautious consumer spending not helping matters. Whilst the difficulty being faced by the sector is nothing new, the industry is facing a growing set of challenges, Comyn warned.

“Online retailing is becoming increasingly prevalent, affecting the traditional retailing model.

This is being compounded by the effects of a strong Australian dollar and consumers who are still unwilling to spend.”

Overall performance is a long way off figures from two years ago, Craig James, Chief Economist of CommSec agreed.
“Conservatism is still clearly the word of choice when it comes to the Australian consumer.”

 

And even economists are uncertain about future growth. “We don’t yet know what the full impact of this will be on their overall level of confidence,” he admitted despite being saved further hardship by the Federal budget just announced.

“With the prospect of two additional rate rises over the remainder of 2011, it wouldn’t be surprising if sales continued to trudge along at this pace for some time to come.”

This wont please the heads of retail houses Myer and David Jones, who both came out last week warning any rates hike would have a further negative impact on trading, agreeing trading was “challenging.”

However, there was some good news emerging from today’s stats.

The strongest lift in spending in the entertainment sector including cinema and video stores.Utility sales also rose. 

NSW recorded the weakest sales (-2.1 per cent), followed by Queensland (-1.1 per cent).

“The latest results show a significant deterioration in spending in NSW in the past four months” the CBA warned.

The BSI tracks the value of credit and debit card sales processed through the bank’s point-of-sale terminals, which accounts for around 40% of total market.

 

The strongest performance was recorded in the ACT (+0.5 per cent), followed by Northern Territory (+ 0.2 per cent) and Tasmania (+0.1 per cent).

CONFIRMED: Sony Ericsson Xperia Heading To Optus & Vodafone

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Sony’s latest addition, the Xperia arc, is coming soon to Optus and Vodafone in April.


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Sony Ericsson have just announced the new Xperia arc smartphone will be available via the Optus and Vodafone networks this April.

The device built with multimedia in mind comes with a display powered by its mobile BRAVIA engine delivers “exceptional visual brilliance” for viewing both movies and images on its 4.2″ multi-touch screen that comes with QWERTY keyboard (onscreen option also).

It will run on Android 2.3 and offers 14 Google tools including Google Music Player, Google Gallery 3D and YouTube.

It is built using the Japanese brand’s award-winning Exmor R mobile sensor with the f/2.4 lens which will ensure the high quality pictures and HD videos even in low light on its 8.1 megapixel camera. Despite its lightweight device, don’t underestimate its power, featuring a 1 GHz Qualcomm processor.

It also comes with an in-built HDMI-connector allowing images to be viewed on a TV screen.

It also has a music player, track ID, as well as Microsoft Exchange, Wi-Fi, DLNA, picture messaging (MMS), 3D games, 8 GB microSD memeory card,  video streaming and a separate Facebook app as well as Google marketplace apps.

 

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The phone also boasts lightweight design and measures just 8.7mm at its thinnest part and will “fit perfectly in the user’s hand”  at 125 x 63.

“Xperia arc is a premium smartphone that will appeal to users who want an exceptional entertainment experience, visual brilliance and the latest version of Android- all in a striking design,” says Sony Ericsson Oceania MD, Brendan Johnston.

“Our 2011 Xperia devices are the only smartphones that gives customers access to the worlds of Android and Sony in one stylish device and we’re proud to be bringing that to Optus and Vodafone customers.”

It will be available in Midnight Blue.

Pricing and plans will be announced by the carriers prior to the launch.

Customers ARE Coming Back, Claims Telstra

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Telstra has woken up and smelt the disdain surrounding its brand.

In a complete turnaround from their previously near-monopoly position Telstra has woken up.

The hatred felt by many customers of their services is now being reversed under their Project New, Telstra’s $1 billion gamble to bring back customers who were previously leaving in droves to competitors like Vodafone and Optus, has changed eveything – and paying off in huge dividends, the Telco said today. 

The Telco acquired over a million (1.05m) new customers over the past six months alone – 919,000 mobile and 139,000 new broadband subscribers, a significant gain in an ever competitive marketplace. 

This in effect means the customer is coming back..and staying.

The gains come despite a 36 percent profit drop reported, although this was in line with expectations, the Telco said. 

Almost 80% of these broadband users were buying in bundles and the Smartphone holders are acquiring ever larger data packets and 32 % had moved to higher plans, said Thodey. 

Telstra users are still dealing with their infatuation with iPhones – 400,000 were sold on their network along with 290,000 Android devices.

70,000 Apple iPads tabs were sold in the period, although the number of Samsung Galaxy S tabs was much less. 

 

Telstra’s tills have also been ringing more meaning their strategy is moving on the right track. 

Other customer win-back initiatives under the Project New are on-call weekend technicians, more call support services on 24 hour availability.  

Customer service has “made good progress but has a long way to go ,” admitted its CEO David Thodey at the financial results announcement this morning in Sydney. 

Pleased with the overall results, Thodey said the company “feels comfortable where they are the moment.”

iPad 2 Shortage After China Blast?

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Following the blast explosion at an Apple iPad factory at the weekend, many believe shortage of the iPad 2 could ensue.The explosion, which killed 3 and injured at least another 15 at Apple contract manufacturer, Foxconn, which just this year began shipping the device from its Chengdu plant and planned to base 60 per cent of its iPad 2 production out of the site.

The explosion, the precise cause of which unknown is thought to have been prompted by combustible dust in a polishing operation.

Foxxconn, known locally as Hon Hai, are said to have suspended all manufacturing operations where polishing takes place while the incident is being investigated, impacting on all Apple as well as fellow contractor Sony’s production lines.

However, the blast did not destroy the plant altogether and left the rest of the building largely unscathed, Foxxconn said.
The plant, located west of Chengdu, in the western region of China opened late last year to meet soaring global demand for iPad 2 with its Shenzhen production base to be moved there. 

However, analysts are still uncertain how the incident will hit production, admitting it is “difficult” to tell whether the availability of the iPad 2 will be affected, according to David Hsieh, VP, Greater China area, DisplaySearch.

“It is believed that Apple approved a shift in production from Shenzhen to Chengdu earlier this year. Foxconn’s plan is to build on the order of 50 iPad assembly lines in Chengdu, each with a manufacturing capacity of one million units per year.”

 

However, these ambitious plans could now suffer a major dent, depending on how long work is suspended at Chengdu and if Shenzhen ops can increase capacity.

And what is also uncertain is how this will affect global sales if lack of supply can thwart consumer appetite for Apple’s cult tab.

Just weeks ago it was unleashed in the Chinese market, and subsequently prompted a riot among consumers in one of Beijing’s top Apple Stores, eager to get their hands on the sought after device. Windows were broken and four people were hospitalised.

China is thought to be one of the biggest global market for the iPad 2.

However, there could be further trouble ahead, bleieves Hsieh.

“Chengdu, in Western China, is a fast-growing region with high-tech manufacturing activity. Moving production to western China is generally done to utilize low labor costs, but it is also challenging, as the components supply chain is not very mature in that area.”

 

Apple have said it is “we are working closely with Foxconn to understand what caused this terrible event.”

Asus New Notebook Entertainment Centre

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The NX90Jq laptop brings a cinematic experience to home viewing and is most definitely the first of its kind for portable entertainment, offering high end specs like no other for just over $2500.With its state of the art Bang & Olufsen designed ICEpower codec speakers and Blu-ray drive together with a class D amplifier will leave you wondering if it’s a home entertainment system or a notebook gone right and has irresistible looks and styling to boot.

At its retail price, its definitely gives viewers bang for their buck.

Designed as a replacement for the desktop PC, this savvy machine will sit well in any living room hooked up to a LCD or Plasma screen TV.  

Its sound capabilities are boosted by SonicMaster Technology with speakers 25% bigger than conventional laptops, say Asus.

One of its more unique features of note are its innovative Touchpads to cater for left or right hand users, one of the first of its kind.

The screen, at 18.4 inches and with full high definition screen, allows the full effect of all movies and audio effects to be felt on this powerful device.

Other specs include 8 gigabytes of DDR3 memory, 1.25 terabytes of built-in storage space for data, movie downloads as well as an a hybrid TV tuner Intel Core i7-720QM CPU processor and operates on a 64-bit version of Windows 7 Home Premium.

It also has a Gigabit Ethernet, 802.11n Wi-Fi, a webcam, an SD card reader, 2x USB 3.0 ports and for gaming lovers contains NVIDIA GeForce graphics.

Blurtl Me: Facebook Talks On Telstra

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The social network allows ‘Blurtls’ to be exchanged via phone.Telstra has just developed a new app giving Facebookers a voice putting status updates and wall posts on audio – meaning relationships are no longer just textual.  

The new app called Blurtl, will let users post a 30 second audio status update to their page and share audio post on up to five nominated friends wall.   

Australians now increasingly log on to social networking sites via mobiles, with Facebook by far the most popular for Telstra 3G mobile customers, say the Telco’s Consumer Director Rebekah O’Flaherty. 

“Whether recording your baby’s first words to share with all your Facebook friends, leaving a personalised, audio Happy Birthday wall post to your mate in London, or updating your status with a quirky voice message that you’re engaged, Blurtl will add an extra dose of personality to Aussie Facebook pages,” Ms O’Flaherty said.                      

Blurtl’s arrival coincides with the launch of Telstra’s new Pre-Paid Weekend+ offer, which includes free standard national SMS and calls to most Australian numbers- all weekend with a $50 recharge.     

The Smartphone app will also allow users to play their Blurtl message back by clicking the audio file on Facebook.

JB Hi-Fi ThinkSmart In Store

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The new deal will change JB’s point of sale system.


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The system revamp involves integrating QuickSmart “online processing system with JB Hi-Fi’s point of sales system that aims to give customers access to full e-signature and paperless in-store capability.”

There is also potential use by online customers and will help enhance customer both online and in store customer experience.

The agreement between the retail giant and ThinkSmart Limited cover both its Australia and New Zealand ops, and aims for full point of sale system integration to the latter’s patented system by April next year.  

“Enhancing customer experience is paramount in driving both in-store and online sales” said ThinkSmart Executive Chairman and CEO Ned Montarello. “These new initiatives are designed to do that.”

ThinkSmart first deployed its QuickSmart online processing system through all JB Hi- Fi stores in April 2009, which helped deliver a 60% reduction in customer processing times, the former said in a statement released.

“It’s exciting that we’re extending our agreement with JB Hi-Fi in Australia and New Zealand at the same time as we aim to bring e-signature technology and paperless processing to the Australian electrical in store and online retailing marketplace,” said Mr Montarello.

“We’ve been working with ThinkSmart since 2007 and we were very happy to extend our agreement with them through to 2014,” said JB Hi-Fi CEO Terry Smart.

“We remain focused on providing the highest level of service to our customers.”

 

ThinkSmart operates its “RentSmart” branded rental finance product through hundreds of retail outlets including Woolworth’s owned Dick Smith and Officeworks.

Optus $200K Fine Misleading $49 Max Caps

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Telco has received a rap for “misleading” $49 Max Cap ads, and fined almost $200,000.The ads which ran over July and August 2010 implied a maximum fee for the mobile package was $49 when in fact this was found to be the minimum consumers were obliged to pay, the Australian Competition and Consumer Commission found (ACCC).

This contravened of consumer legislation Trade Practices Act 1974, which forbids false advertising about goods and services.

The mobile cap ads also claimed to allow making of any type of calls when in fact only certain types were permitted. The advertisments appeared in print and online.

And it’s not he first time the SingTel owned carrier has been rebuked by the ACCC for over zealous advertising.

Last year, the Federal Court found that Optus
breached the Trade Practices Act with its advertising of its “Think
Bigger” and “Supersonic” internet plans, after being referred by the Commission.

“Claims that a service allows consumers to call ‘anyone’ are likely to be misleading if the reality is that some types of calls are excluded,” ACCC chairman Peter Kell said in a statement.

SingTel Optus Pty Ltd was fined 27 separate fines of $6,600 for infringements of Trade Act  totalling $178,200.

 

“If you advertise a service as a ‘$49 Max Cap’ when $49 is the minimum that consumers have to pay, then you risk breaching the law by misleading consumers about the cost of the service,” Kell added.

The telco was served with the notices on April 18.

Telstra Launch New SMB Broadband

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Telco is to unveil a new broadband solution later today. The “new national broadband solution” called Telstra Digital Business is designed for small businesses. 

The solution will be an “affordable and easy to use communication system” and will give SMBs the same fast internet enjoyed by big business, Telstra claims.

This latest bid encouraging business to make the “digital switch” comes in light of the NBN test phase, in which the telco is to take part.

Further details will be available later this morning after the announcement by Telstra CEO, David Thodey, and Federal Minister for Small Business, Nick Sherry.

It will be available for one million small businesses currently in Australia.

This news also comes as Telstra has been given a 90-day extension of its deadline to submit a plan to separate its retail and wholesale arms just last week, as it examines the fine print of the $11bn deal to migrate to the National Broadband Network .

However, reports this morning indicate David Thodey and NBN Chief, Mike Quigley, have held increasingly in-depth talks with their legal teams over the final terms of the deal, with an announcement before the end of May on the cards.