What's Important in the Financial World (2/7/2013)

Warren Buffett
Warren Buffett

Staggering iTunes Sales

iTunes song sales have reached a number that is more than three times the world's population. Apple Inc. (NASDAQ: AAPL) has reinvented the music distribution, but not in a way that has benefited publishers, who often accuse Apple of taking too large a cut of sales revenue. Nevertheless, the figure is staggering. Apple announced:

The iTunes Store is the world's most popular music store with a catalog of over 26 million songs and over 25 billion songs downloaded, and is available in 119 countries. The iTunes Store is the best way for iPhone®, iPad®, iPod®, Mac® and PC users to legally discover, purchase and download music online. All music on the iTunes Store comes in iTunes Plus®, Apple's DRM-free format with high-quality 256 kbps AAC encoding for audio virtually indistinguishable from the original recordings. iTunes in the Cloud lets you download your previously purchased iTunes music to your devices at no additional cost, and new music purchases can be downloaded automatically to your iOS devices.

PlayStation 4 Launch Rumors

There are more rumors that Sony Corp. (NYSE: SNE) will launch a PlayStation 4 model, perhaps as early as this month. The PlayStation was once the leader of the game console business, but sales have been damaged badly by Nintendo and Microsoft Corp. (NASDAQ: MSFT) products. Sony faces the problem that game consoles may have become obsolete as games move to tablets and smartphones. Also, some of the time gamers spend online is devoted to products from firms led by Zynga Inc. (NASDAQ: ZNGA). Nintendo recently released a new version of its products, and sales so far have been disappointing. According to Asahi Shimbun:

Andrew House, president of Sony Computer Entertainment Inc., will announce the launch at the PlayStation Meeting 2013 in New York on Feb. 20.

The PlayStation 3, at the time an industry standard, debuted in 2006.

Specifications are as yet unavailable, but the PlayStation 4 is believed to draw on high-performance graphics chips that produce faster images with greater detail.

This could make the console suitable for cross-discipline use, possibly for downloading and playing music and videos with greater speed and fidelity than on smartphones and personal computers.

Alcatel-Lucent Ousts CEO

Deeply damaged telecom equipment company Alcatel-Lucent S.A. (NYSE: ALU) has fired CEO Ben Verwaayen. The decision will not matter. The company has lost so much market share that its shares trade near penny stock levels. The efforts at a turnaround have failed for years. In the spring of 2008, the stock hit $7.50. It currently trades barely above $1. Alcatel-Lucent has lost money in each of the past three years, on revenue that has been flat at about $21 billion. The successes of Cisco Systems Inc. (NASDAQ: CSCO) and Ericsson (NASDAQ: ERIC) have made growth at Alcatel-Lucent almost impossible. The company announced:

Alcatel-Lucent (announced today that CEO, Ben Verwaayen, has decided not to seek re-election as a director at this year's Annual General Meeting, and will step down as CEO once a successful transition has been executed.

Philippe Camus, Chairman of the Alcatel-Lucent Board, said "After due reflection, the Board has accepted Ben's decision to step down as CEO."

"Over the last few years, Ben has set a new direction, created one company out of two, and has recently seen through the completion of the stabilisation of the company's balance sheet, enabling us to move forward with confidence."

Filed under: 24/7 Wall St. Wire, Market Open Tagged: AAPL, ALU, CSCO, ERIC, featured, MSFT, SNE, ZNGA