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Article from GigaOm.

Sandy isn’t just wreaking havoc for utilities and conventional power plant companies on the east coast. The hurricane is also delaying some solar power plant project work for First Solar, which on Thursday reduced its 2012 sales forecast and also boosted its earnings projection.

The Arizona-based company said the hurricane is also disrupting the supply of components for its solar products, which include panels and trackers that prop up the panels and tilt them to follow the sun’s movement throughout the day. For 2012, First Solar now expects to generate $3.5 billion to $3.8 billion in sales — previously it was looking at $3.6 billion to $3.9 billion. Non-GAAP earnings should hit $4.40 to $4.70 per share, however, instead of $4.20 to $4.70.

The company issued the forecast along with its third-quarter financial results, which saw its sales decline year-over-year sales to $839.1 million from $957.3 million. First Solar posted a net income of $1 per share for the third quarter, down from $2.25 per share in the same period a year ago, thanks to charges related to its restructuring efforts to reduce costs. But still, a profit in a difficult year.

“The solar market remains challenging, but we are continuing to gain traction in the new sustainable markets we’re targeting and expanding our global presence,” said Jim Hughes, First Solar’s CEO, during a conference call with analysts.

First Solar executives highlighted the progress they have made in opening up new markets. The company has vowed to build its business in places with minimal government subsidies, which so far have been responsible for the rise of the global solar market. Europe has been the largest market, but the pace of its growth will likely slow over time as governments gradually reduce their incentives.

During the third quarter, the company announced it was chosen to build a 13 MW power plant for the Dubai Electricity & Water Authority. First Solar inked deals to sell its cadmium-telluride solar panels for a 25 MW project in the state of Rajasthan in India and for two other projects totaling 50 MW in the same state. The company also signed a memorandum of understanding with a power plant operation and maintenance company in Indonesia to work on 100 MW of projects.

First Solar also hired Bruce Yung as its China manager during the third quarter. The company tried to crack the Chinese market before but hasn’t seen much success. Although China presents lots of opportunities, its government also is keen on boosting the domestic market for Chinese solar manufacturers.

In recent years, First Solar has been building its power plant development expertise and amassed an impressive pipeline of projects under development. That business is more lucrative – the company can make money from developing, building and operating solar power plants (for owners it sells the power plants to) that use its own solar panels. The company is building the largest solar power plant project in the U.S. – the 550MW Topaz Solar Farms in central California. The vast majority of the 3 GW of projects under development that it’s inked power sales agreement contracts for are in North America.  Now the company’s hope is to develop solar power plants in other parts of the world.

First Solar has no intention of conquering the rooftop segment – its panels are less expensive but also less efficient at converting sunlight into electricity as other major brands. That means an array with First Solar’s panels will take up more space than the one with more efficient solar panels. Hughes also told analysts that the rooftop market has less brand loyalty and cares less about how well the solar panels will perform over decades.

Photos of Topaz Solar Farms by Ucilia Wang.
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Article from NYTimes.

Apple fired the executives in charge of the company’s mobile software efforts and retail stores, in a management shake-up aimed at making the company’s divisions work more harmoniously together.

The biggest of the changes involved the departure of Scott Forstall, an Apple veteran who for several years ran software development for Apple’s iPad and iPhone products. Mr. Forstall was an important executive at the company and the one who, in many respects, seemed to most closely embody the technology vision of Steven P. Jobs, the former chief executive of Apple who died a year ago.

But Mr. Forstall was also known as ambitious and divisive, qualities that generated more friction within Apple after the death of Mr. Jobs, who had kept the dueling egos of his senior executives largely in check. Mr. Forstall’s responsibilities will be divided among a few other Apple executives.

While tensions between Mr. Forstall and other executives had been mounting for some time, a recent incident appeared to play a major role in his dismissal. After an outcry among iPhone customers about bugs in the company’s new mobile maps service, Mr. Forstall refused to sign a public apology over the matter, dismissing the problems as exaggerated, according to people with knowledge of the situation who declined to be named discussing confidential matters.

Instead, Timothy D. Cook, Apple’s chief executive, in September signed the apology letter to Apple customers over maps.

Apple said in a news release on Monday that the management changes would “encourage even more collaboration” at the company. But people briefed on Apple’s moves, who declined to be identified talking about confidential decisions at the company, said Mr. Forstall and John Browett were fired.

Steve Dowling, an Apple spokesman, said neither executive was available for an interview. Mr. Forstall did not respond to interview requests over e-mail and Facebook.

Mr. Browett, who took over as head of the company’s retail operations in April, will also leave the company after a number of missteps. Apple said that a search for a new head of retail was under way and that the retail team would report directly to Mr. Cook in the meantime.

Mr. Forstall will leave Apple next year and serve as an adviser to Mr. Cook until then.

Eddy Cue, who oversees Apple’s Internet services, will take over development of Apple maps and Siri, the voice-activated virtual assistant in the iPhone. Both technologies have been widely criticized by some who say they fall short of the usual polish of Apple products.

Jonathan Ive, the influential head of industrial design at Apple, will take on more software responsibilities at the company by providing more “leadership and direction for Human Interface,” Apple said. Craig Federighi, who was previously in charge of Apple’s Mac software development, will also lead development of iOS, the software for iPads and iPhones.

Apple said Bob Mansfield, an executive who previously ran hardware engineering and was planning to retire from Apple, will lead a new group, Technologies. That group will combine Apple’s wireless and semiconductor teams. Apple in a statement said the semiconductor teams had “ambitious plans for the future.”

Recently, Mr. Mansfield had been working on his own projects at the company, operating without anyone reporting to him directly. One of the areas of interest Mr. Mansfield had been exploring is health-related accessories and applications for Apple’s mobile products, said an Apple partner who declined to be named discussing unannounced products.

Mr. Forstall was a staunch believer in a type of user interface, skeuomorphic design, which tries to imitate artifacts and textures in real life. Most of Apple’s built-in applications for iOS use skeuomorphic design, including imitating thread of a leather binder in the Game Center application and a wooden bookshelf feel in the newsstand application.

Mr. Jobs was also a proponent of skeuomorphic design; he had a leather texture added to apps that mimicked the seats on his private jet. Yet most other executives, specifically Mr. Ive, have always believed that these artifacts looked outdated and that user interface design on the computer had reached a point where skeuomorph was no longer necessary.

Mr. Forstall, who trained as an actor at a young age, also shared with Mr. Jobs a commanding stage presence at events introducing Apple products, often delivering his speeches with a pensive style that echoed that of Mr. Jobs.

According to two people who have worked with Apple to develop new third-party products for the iPhone, the relationship between Mr. Forstall and Mr. Ive had soured to a point that the two executives would not sit in the same meeting room together.

A senior Apple employee who asked not to be named said Mr. Forstall had also incurred the ire of other executives after inserting himself into product development that went beyond his role at the company. One person in touch with Apple executives said the mood of people at the company was largely positive about Mr. Forstall’s departure.

“This was better than the Giants winning the World Series,” he said. “People are really excited.”

The departure of Mr. Browett was less surprising to outsiders. In August, the company took the unusual step of publicly apologizing for a plan by Mr. Browett to cut back on staffing at its stores. Charlie Wolf, an analyst at Needham & Company, said he was never convinced that Mr. Browett was a good choice to join Apple because he had previously run Dixons, a British retailer that is viewed as being more downmarket than Apple’s retail operations.

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Article from GigaOm.

SolarCity, which started as a residential solar installer and is planning a $201 million IPO, has now jumped into building solar panel farms for utilities. The company announced on Thursday a deal to build a 12 MW(ac) project for Hawaiian utility Kaua’i Island Utility Cooperative.

The $40 million project is unusual because SolarCity, founded in 2006, has spent most of its resources building up an installation and financing business for residential and business customers (including schools and public agencies). This business has positioned the company as an electric retail service provider who competes with utilities. The Kauai project is the first announced project by SolarCity to build a solar farm for a utility, said Jonathan Bass, SolarCity’s spokesman. (The company previously also lined up a fund from Pacific Gas & Electric‘s investment arm to market solar panels and leasing products to home and business owners).

The engineering and construction contract on Kauai will give SolarCity the experience of working with a new class of customers. More utilities across the country are interested in building their own solar energy projects in order to meet regulatory mandates or because they see it as a good investment opportunities to bet on renewable energy. We have noted in previous posts that SolarCity was going after larger and larger projects, and that placed the company in direct competition with more established players in that segment, such as SunEdison, SunPower and First Solar.

The utility solar market is growing faster than the residential and commercial segments primarily because the projects involved tend to be larger, in tens or hundreds of megawatts, and potentially more lucrative. And many utilities in large states, such as California, need to serve an increasing amount of renewable energy to their customers. Some of the overhead costs also could be lower when it comes to utility-scale projects: you don’t need to send out an army of marketing and sales people to sell consumers systems that are kilowatts in size.

If SolarCity has any ambition to expand beyond the U.S. market, it would do well to gain an expertise in developing and installing utility projects. In many markets overseas, the biggest opportunities lie with working with utilities to boost the amount of renewable energy they serve and taking advantage of government subsidies for that type of projects.

SolarCity is among the first to offer homeowners leases so that they don’t have to pay a high upfront cost of installing solar panels. Instead, homeowners pay a monthly fee via long-term contracts for the electricity from the panels, which are owned by the investors, typically banks, that have set up funds for SolarCity to install and manage the equipment. Solar leases have become popular and are offered by many more companies now, and they accounted for over half of the residential installations in California, the country’s largest solar market. Part of the sales pitch for the leases is a promise  – or at least a strong suggestion – that consumers will end up paying lower electric rates over time than they would with their local utilities.

The California company also has lined up some big-name business customers, including Walmart, eBay and Intel. Nearly a year ago, SolarCity said it had secured a loan to install 300 MW of solar panels in military housing communities across the country.

In recent years, SolarCity entered other types of energy service businesses. It began to offer energy audits and home-improvement services to help homeowners save electricity use and cost. It also now offer energy storage using lithium-ion battery packs from Tesla Motors and install solar powered charging stations for electric cars (such as Tesla’s cars).

For the Kauai project, SolarCity intends to install solar panel on 67 acres that are part of a former sugar plantation. The utility and SolarCity still need to secure local and state permits, but the plan is to start construction in July 2013 and switch on the solar farm in 2014. Electricity from the solar farm will be enough to serve about 6 percent of Kauai’s daily energy demand, the companies said.

Kauai is one of the Hawaiian islands and is home to nearly 68,000 residents. It’s set a goal of generating renewable energy to meet 50 percent of its needs by2023. The project announced Thursday is one of the three solar farms, totaling 30 MW(ac), that are being developed by the Kauai utility.

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Article from NYTimes.

Japanese companies have made a string of deals in the United States this year, but the pact announced on Monday is one for the record books.

The agreement by SoftBank to take control of Sprint Nextel is the biggest deal by a Japanese company in the United States since at least 1980, according to Thomson Reuters, which values the deal at $23.3 billion.

That far exceeds the next-largest deal, the $9.8 billion stake that NTT DoCoMo, SoftBank’s rival, took in AT&T Wireless in 2000.

The SoftBank deal is also worth more than some recent takeovers, including Takeda Pharmaceutical’s 2008 purchase of Millennium Pharmaceuticals for $8.1 billion. It also tops the $7.8 billion agreement the Mitsubishi UFJ Financial Group struck with Morgan Stanley in the depths of the financial crisis in 2008, according to Thomson Reuters data.

It also ranks as the biggest foreign deal involving an investment in an American company so far this year, according to Thomson Reuters.

The deal on Monday is a welcome development for the financial advisers involved, in a year starved for deal activity.

The agreement has lifted Citigroup, an adviser to Sprint, to sixth from seventh place in the Thomson Reuters global league table this year. Sprint’s other advisers, UBS and Rothschild, each moved up one spot as well.

One of SoftBank’s advisers, the Raine Group, entered this year’s league table in 30th place after the deal. (The deal is the group’s biggest, according to Thomson Reuters.) The Mizuho Financial Group, another SoftBank adviser, rose to 17th place from 22nd.

For American consumers, SoftBank is set to be the latest Japanese company to make its mark on daily life in this country.

In 1989, the Mitsubishi Estate Company made headlines with a deal to buy a 51 percent stake in the Rockefeller Group in New York. (The stake eventually grew to 100 percent, after Rockefeller went through bankruptcy.)

Craig Moffett, an analyst with Sanford C. Bernstein, drew a comparison to that deal last week, when Sprint confirmed it was in talks with SoftBank.

“This is tantamount to Japanese buyers buying Rockefeller Center,” he said.

The year 1989 was also when the Japanese electronics giant Sony took a foothold in Hollywood. Its roughly $4.7 billion purchase of Columbia Pictures Entertainment was a blockbuster at the time.

SoftBank’s shares fell 5.3 percent in Tokyo on Monday, with investors concerned over the company’s ability to turn around the ailing Sprint.

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Article from NYTimes.

By clinching a deal to buy MetroPCS, T-Mobile USA is aiming not only to survive but also to turn up the pressure on its larger rival, Sprint Nextel.

The merger, formally announced on Wednesday, signals a renewed phase of jockeying among cellphone service providers as they race to draw in more smartphone users and upgrade to the latest high-speed data networks. And by taking one of the most attractive takeover targets, MetroPCS, off the table, T-Mobile may have strengthened its hand at the expense of Sprint.

The cellphone service industry is dominated by the virtual duopoly of Verizon Wireless and AT&T, which together claim 199 million customers, more than their next six competitors combined. That has left Sprint and T-Mobile to scramble, trying to undercut their big rivals on price even as they seek additional wireless spectrum that would support high-speed data networks.

The industry has long looked to consolidation to grow; last year, AT&T unsuccessfully sought to buy T-Mobile for $39 billion, hoping to gain size and spectrum. Growth via merger also underpinned Sprint’s aborted attempt to buy MetroPCS this year, a transaction scrapped at the 11th hour by Sprint’s reluctant board.

MetroPCS represents a potentially big lost opportunity for Sprint. The two companies use the same network technology (CDMA), which would have made for a relatively smooth integration of customers and devices. T-Mobile runs on GSM, so the company will have to convert MetroPCS’s 9.3 million customers to its technology over the next three years.

CLOSING THE GAP If the parent company of T-Mobile USA buys MetroPCS, the combined unit would have the fourth most cellular subscribers.

SUBSCRIBERS, IN
MILLIONS
Source: The companies
AT&T 105
Verizon 94
Sprint 56.4
Merged company 42.5
T-Mobile USA 33.2
MetroPCS 9.3

The newly enlarged T-Mobile will have about 42.5 million customers, compared with Sprint’s 56 million. But the merger could potentially give T-Mobile additional clout to demand popular devices like the iPhone, which it does not now carry. Adding MetroPCS will also help T-Mobile build out more quickly its Long Term Evolution network, the speedy data standard that powers the latest batch of smartphones.

T-Mobile executives argue that the unified operator can offer unlimited data and cheaper prepaid service plans to more customers.

“When you look at this as an industry, we are the alternative choice for consumers,” John J. Legere, the company’s chief executive, said in a telephone interview. “This can only be good for the industry to think about the competition and consumer.”

T-Mobile’s parent, Deutsche Telekom, and MetroPCS held on-and-off discussions about a merger for years, according to people with direct knowledge of the matter who spoke anonymously because they were not authorized to speak publicly about private discussions. But after Sprint’s board vetoed a takeover of the smaller service provider, T-Mobile and MetroPCS met early this summer to begin formal discussions about a deal.

Weeks of negotiations ensued, leading to a structure in which Deutsche Telekom would own 74 percent of the combined entity through a complicated stock swap. Existing MetroPCS shareholders will also receive $1.5 billion through a special dividend, worth about $4.09 a share.

And while antitrust officials fiercely opposed AT&T’s takeover of T-Mobile, people involved in the MetroPCS transaction argued that Wednesday’s deal was more likely to pass regulatory muster. Instead of fortifying one of the country’s biggest service providers, it will bolster one of its weaker ones.

A spokesman for Sprint declined to comment.

With T-Mobile claiming MetroPCS, Sprint is likely to find itself even harder pressed to build out its next-generation network and pitch itself as the dominant low-cost service provider. Sprint’s chief executive, Daniel R. Hesse, has said he expects to participate in mergers within the industry, but few attractive takeover targets remain.

Shares in Leap Wireless International, a smaller competitor often cited as a likely deal partner, plummeted nearly 18 percent on Wednesday, as investors shook off hopes that it would be acquired anytime soon. The company, a prepaid service provider, operates largely in less-attractive markets and is in the midst of a turnaround effort.

“I don’t think that Leap would provide all that much,” Charles S. Golvin, an analyst at Forrester Research, said by telephone.

While some analysts have speculated about whether Sprint would try to outbid T-Mobile for MetroPCS, some industry deal makers were skeptical of the company’s will to revisit a target it had already left at the altar.

Sprint is still scarred by the merger that produced its current incarnation: its 2005 union with Nextel Communications, an example still used in business schools as a classic case of a bad deal.

The tie-up was marred by incompatible phone networks and infighting. As a result, Sprint slipped further behind Verizon and AT&T in market share.

Sprint may still pursue deals, especially as a way to add to its stores of spectrum, without resorting to full-on mergers. Analysts and deal specialists say one potential seller is Clearwire, which already helps provides a high-speed data network to Sprint.

Another is Dish Network, which has an abundance of spectrum but has been unable to set up its own mobile phone network. The company’s chairman, Charles W. Ergen, hinted at an industry conference that with T-Mobile out of the running as a potential partner, he would be open to others.

“Sometimes when one door closes, a window opens somewhere else,” he said, according to a report in The Denver Post.

Analysts have floated one more, bolder, possibility: buying the newly enlarged T-Mobile, creating a third major company to combat Verizon and AT&T. Industry bankers disagree on whether such a deal would be opposed by the Federal Communications Commission.

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