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Sony issues recall for popular laptop

Sony Corp. (NYSE: SNE) has issued a recall for some of it's popular Vaio laptops today due to an overheating problem that some consumers have encountered with their machines.

So far, the company has received 209 reports of the popular machines overheating on users, and in 7 instances, users received minor burns as a result of the overheating laptops.

The computers in question involve 19 models in the Vaio TZ series that were produced between the months of May 2007 and July 2008. According to Sony, the problem is a result of some improper wire connections in the hinge between the laptop body and the the monitor that appears to be wearing out and causing short circuits in the machines.

Of the seven injuries that have been reported, five were reported in Japan, and one in both the United States as well as Italy.

The recalled machines are located all over the globe, with around 373,000 of the computers being sold in 48 different countries. The remaining 67,000 recalled machines were sold in Japan.

If you think that your computer may be a part of this recall, you should definitely contact Sony to find out.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

Is BT's offer to save Britain's red phone boxes for £500 fair?

This week BT PLC (formerly British Telecommunications PLC) (NYSE: BT) got lots of favorable coverage for relenting on its plan to remove thousands of iconic red phone boxes. BT announced in June it wanted to replace about one-third of its remaining 12,000 red phone boxes. The company has slowly been dispatching the boxes for years, prompting small local protests all along and a big outcry this summer.

BT proposed a new deal: for £1 a town could keep the box, but with no working phone. A working phone would cost £500 ($900) a year. According to The Telecom, BT says £500 ($900) pounds is only half the annual cost of operating a red phone box. Really, $1,800 a year to maintain a pay phone? This July, residents in Cornwall were told their phone, which had been broken since June, wouldn't be fixed till late August. In protest, they strung up a bunch of tin cans on strings inside the booth.

Continue reading Is BT's offer to save Britain's red phone boxes for £500 fair?

Original Apple iPhone seeing huge demand

When Apple, Inc. (NASDAQ: AAPL) released the iPhone 3G back in July, little did it know (most likely) that the device would have issues worldwide connecting to 3G networks, causing consumer frustration on a level we've rarely seen with any Apple product. Well, some consumers have apparently given up and they're moving back to the older, slower, original iPhone, which is causing a cottage industry to spring up around the older device.

NextWorth.com is charging $200 to $300 for a used iPhone (the non-3G kind), which is more than the price of the newer, sleeker and faster iPhone 3G. Why? There's demand -- and lots of it. Some customers don't want to be shackled to AT&T, Inc. (NYSE: T), the exclusive carrier for the iPhone and iPhone 3G in the U.S., as the original iPhone can be unlocked very easily using software tools found all over the internet. Once unlocked, the original iPhone can be used at any WiFi hotspot. There are no 3G connectivity issues either.

Does Apple have a problem now that the older, discontinued iPhone is still in hot demand? No. People using iPhones, new or old, reinforces the brand among other things, and Apple still made the original sale after all. If there is any loser here, it's AT&T. The largest wireless carrier in the U.S. still has the smallest nationwide 3G wireless network compared to its competitors. Launching a product with the magnitude of the iPhone 3G was just asking for problems given AT&T's network, and some informed customers don't want AT&T at all.

Credit Suisse brokers take Auction Rate Securities fraud to new depths

The New York Times reports that two Credit Suisse brokers took Auction Rate Securities (ARS) fraud to a new level. They fabricated an ARS-issuing agency -- a made up student loan securitizer -- as they sold investors their most toxic Collateralized Debt Obligations (CDOs) backed by subprime mortgages and mobile home loans. Their deception is not new in concept -- evidence of ARS fraud has already emerged -- but the scope of the fraud is noteworthy.

Since I first began writing about the $330 billion ARS market -- long-term securities whose rates were reset in weekly auctions until they failed -- 6,162 comments have appeared from people trying to get their money back. And many of the issuers have announced settlements with authorities because investigators have found evidence that many of them were actively trying to dump the ARS from their own books into those of unsuspecting individual investors by telling them the ARS were safe and offered slightly higher-than-money-market yields.

But this Credit Suisse fraud reaches a different level. According to the Times, "Eric Butler, [who] sold customers some of the most toxic investments of the subprime age - [CDOs] - in what federal prosecutors characterize as a $1 billion bait-and-switch -- told those investors that they were getting "securities [that] were as safe as cash." The Times wrote that Butler "claimed, [that] the outfit that issued them, Glacier Education Loan, bought student loans guaranteed by the federal government. The problem: there is no such thing as Glacier Education Loan."

Continue reading Credit Suisse brokers take Auction Rate Securities fraud to new depths

Apple's iPhone may be coming to China Mobile

Apple, Inc.'s (NASDAQ: AAPL) iPhone 3G continues to sell like gangbusters even with multiple issues and some furious customers. But, if Apple really is bent on selling over 10 million of the now-iconic, do-everything handset, it may need to beef up its sales as best it can. Enter China Mobile.

That's right -- the wireless company that has more subscribers than there are U.S. citizens may be selling the iPhone 3G soon, according to reports. And we're not talking gray market handsets, but an actual partnership between Apple and China Mobile. Talks between the two companies, according to the 21st Century Business Herald, are in "final stages."

China Mobile CEO Wang Jianzhou stated this week at the ITU Telecom Asia 2008 exhibition in Bangkok that "Steve Jobs and I hope the iPhone will enter China as soon as possible ... we are discussing this issue, but we do not have an agreement." If Apple can get its do-everything handset into China Mobile, we've not seen anything yet in terms of iPhone 3G sales.

IPod sales may be on the decline in the near future -- but can the iPhone 3G make up for that? We'll see.

Starbucks gambles on healthier breakfast fare

Starbucks Corp. (NASDAQ: SBUX), reeling from declining consumer spending, is betting that healthier breakfast items such as a hard boiled egg platter will lure new customers. I wonder whether this gamble will pay off.

First of all, anyone who has eaten in a Starbucks can testify that food is not its forte. I just don't see people craving their morning Starbucks muffin. Plus, in places such as New York City, people have tons of breakfast options ranging from fast-food joints to delis to food trucks. They view Starbucks as a mid-afternoon indulgence. At least, that's how I thought of Starbucks when I worked in New York.

Getting people to change their breakfast habits will be difficult. In tight economic times, people will gulp down their morning meal at home. If they do eat out, they will look for cheaper alternatives than Starbucks. McDonald's Corp. (NYSE: MCD) has made serious inroads in the breakfast market, as has Dunkin' Donuts. Sorry, Starbucks lovers, but I found their coffee far less biter than Starbucks. I even have two bags of Dunkin' java (regular and decaffeinated) in my house.

Continue reading Starbucks gambles on healthier breakfast fare

General Motors to continue employee pricing

General Motors Corp. (NYSE: GM) will offer customers wanting to buy its cars the same discounts as employees for another four weeks, according to Bloomberg News.

The incentives, on most 2008 and some 2009 models, were to have expired today but, according to Bloomberg, "GM will continue the deals through the end of the month because the initial two-week offer boosted sales."

Of course, this is great news for consumers, particularly the few who are confident enough in their economic circumstances to be in the market for a new car. Maybe it will encourage people leaning toward a Honda (NYSE: HMC) or some other foreign automaker to give GM a second look or even a third one. Chances are, though, it won't do much to help.

As my colleague Michael Rainey
noted earlier, imports accounted for 68% of all passenger car sales in the U.S., a new low for the Big Three. These are the vehicles that consumers stung by high gas prices are most interested in purchasing. Good luck in trading in your gas-guzzling SUV for a fuel-efficient hybrid. Many dealers are reportedly no longer interested in the big vehicles because their trade-in value has plummeted.

Continue reading General Motors to continue employee pricing

Fall album releases raise new questions for the music industry

The Associated Press reported on five upcoming albums this fall in an article posted yesterday, raising new questions about the music industry and the success these albums may enjoy. The big news are the number of comeback albums being released in the next few months, notably from Metallica and Australian band AC/DC. Both albums come after lapses of five years or more from the artists, a time period that has seen major upheaval and change in the industry, and the AP cites reports that both return the bands to their roots.

Nevertheless if Metallica and AC/DC are returning with new material, the music industry is simple not a safe place for anyone involved with it: artists, managers, investors, and vital customers. In fact, both Warner Music Group Corp. (NYSE: WMG) and Sony Corporation (NYSE: SNE), which owns Sony Music Entertainment Inc., have seen declining prices throughout the summer. None of this is any different from the declines the industry has been seeing in recent years, but digital sales and excitement over new albums in the summer might have pointed in the opposite direction.

The AP's projections for other top albums this fall include material from rapper T.I., still reeling from a weapons charge and punishment, and High School Musical 3 from Disney (NYSE: DIS). It is just too hard to suggest if these projections are reliable in an industry currently in flux and continuously declining. However, they are sure to be successful, in particular the next installment of High School Musical, but they will probably all be paled by an unexpected success. If the summer excitement could continue from the festivals and tours into the fall, then these albums could do well, but whether that will improve the industry or improve investors is just too risky to speculate.

Ford (F) desperately needs more dealers to consolidate

Ford Motor Co. (NYSE: F), which is reconfiguring plants from producing unpopular trucks and SUVs to fuel-efficient passenger cars, will now be trimming its nationwide automobile dealerships as sales continue to lose steam. High fuel prices and shifting consumer sentiment towards smaller cars are only some of the reasons for the sales decline.

Ford executives believe that more Ford dealerships (along with Ford brands Mercury and Lincoln) will have to consolidate to survive. Ford is right -- there is no way a huge, overwhelming national network of dealers can exist when sales don't. Expect dealers to start amalgamating as Ford's Way Forward plan continues taking longer than expected.

2007 stats tell the tale: Four thousand Ford, Lincoln and Mercury dealers sold an average of 590 vehicles in 2007. Toyota Motor Co.'s (NYSE: TM) 1,400 dealers in the U.S. sold 1,766 vehicles in 2007. Quite the contrast. Ford has managed to make about 400 weaker dealers combine with stronger ones since initiating a program to do just that in 2005. Looks like incentives to speed up profitable dealer concentrations will have to become much sweeter as sales continue to flop as badly as a corner lemonade stand in winter.

Ford to spend $75 million retooling truck plant for small cars

Ford Motor Co. (NYSE: F) will refit an existing truck plant in Michigan to manufacture smaller cars. Cost: $75 million. This comes on the heels of one of the worst years ever for large American automakers, which still can't cope with rapidly changing consumer desires for fuel-efficient transportation instead of gas guzzling SUVs and large trucks.

As Georges indicated recently, Ford will need massive plant retooling to get its bottom line back in shape as it produces the product mix consumers are looking for. This is a good step for Ford, even though it will be costly. The $75 million price is minor considering the cost of doing nothing.

Ford says the production of newer, fuel-efficient cars at the Michigan plant will begin in a few months, with completion sometime in 2010. It's also moving 1,000 of the employees from that plant to another one in Wayne, Michigan to increase production of the 4-cylinder Ford Focus sedan. Since Ford spent $300 million just three years ago to build the plant to be flexible, this should speed the conversion, according to the automaker.

It's just too bad that Ford can't unveil more small car production in November instead of just starting to convert a plant for a few years down the road.

Google unveils Ad Manager system for use by anyone

Google, Inc. (NASDAQ: GOOG) unveiled its Ad Manager advertising management platform this week after a beta release in June. This platform allows website operators to manage advertising inventory, tracking and ROI. And the price is right -- there is none -- which fits into Google's history of giving away some key products for free.

Google's Ad Manager public release is significant because it will allow almost anyone to set up and use both direct and network-based advertising to help eliminate costs and pump up revenue -- even if the ads aren't from Google's massively popular AdSense or AdWords program.

However, Google is making it super easy for website publishers to integrate its AdSense platform directly into its Ad Manager product. This was pretty obvious from day one as Google continues to recruit more ad customers into its universe to grow its own ad revenue. Ad revenue, still, is the biggest single component of Google's income.

Continue reading Google unveils Ad Manager system for use by anyone

The right REITs focus on rentals

"Home prices are becoming affordable again, so the decline in prices is likely more than half over," say Dr. Marvin Appel and Gerald Appel of Systems & Forecasts.

Meanwhile, the technical experts believe that long-term investors can now look to get back into the real estate investment market and recommend two ETFs that are based on rental REITs.

"Many analysts do not expect the financial markets to improve significantly until home prices stop falling. The pace of existing home sales remains low, and available inventory relatively high, both indicating that buyers are not yet able to step into the market at current prices.

"However, that could change within a year. Home prices are becoming affordable again, so the decline in prices is likely more than half over.

"The median home price is now more affordable to the median household than at any time since the start of 2004. My analysis suggests that housing prices will have to fall a bit more, but the housing market is not far from being reasonably valued for the first time in five years.

Continue reading The right REITs focus on rentals

GM's Volt: More ice-breaker than game-changer in electric car tech

Will the Volt provide the jolt that turns General Motors' (NYSE: GM) around?

In the interpretation of one critic, Chevrolet's Volt plug-in hybrid may end up being not so much a game-changer as an ice-breaker.

Stock Analyst C. Leonard Bauer, whose ownership of high-performance sports cars through the years has been exceeded only by, perhaps, Mario Andretti, says he doesn't expect the Volt, Chevrolet's extended-range electric vehicle, to overwhelm the public or generate rave reviews from critics, but those two conclusions still won't blot out Volt's positives.

"The key point, and one many have overlooked, is not the Volt, but the infrastructure behind the Volt," Bauer said. "The Volt as a model will most likely underwhelm, but the processes GM has put in place will pay dividends when advances occur." Bauer added that he does not own shares in or have a rating on any auto manufacturer.

Amped-up R & D

GM, Bauer says, has now committed a large amount of resources to electric and hybrid technologies, whereas previous commitments were modest. Moreover, "it would take an act of idiocy or $10 a barrel oil" for GM to dismantle its current research platform. Bauer expects neither, and as a result, he expects the 2nd, 3rd and 4th generations of Volt and its companions to achieve both battery power storage and power delivery advances not possible during GM's previous electric vehicle projects.

Continue reading GM's Volt: More ice-breaker than game-changer in electric car tech

Best Buy (BBY) gets aggressive on Blu-ray price cuts ... not

Best Buy, Inc. (NYSE: BBY) has lowered the price of a Sharp Blu-ray disc player this week to $349.99 from $399.99. Why is that so significant? It isn't. While most buyers in the U.S. sit and wait until Blu-ray player prices reach the $199.99 level, there is a looming problem even with that.

The problem is this: standard DVDs are good enough for most of us, and with upconverting players sitting in all retailers for $50 to $75, will another upgrade cycle to another format be foisted on the buying public? This one will be much harder than the transition from VHS tape to DVD a decade ago.

If Best Buy really wants to make the next-generation optical disc format truly a best seller, the pricing will have to come down by a mile. This really won't be the responsibility of the retailer, but the manufacturer. But Best Buy can do this: guarantee an X amount of sales if the price moves to a certain price point. It's the only retailer outside Wal-Mart Stores, Inc. (NYSE: WMT) that could possibly guarantee a certain amount of sales in order to get newer consumer electronics format into the mass population. So, will Best Buy take the lead and get Blu-ray into the mainstream?

Toshiba Corp. is rolling out its own upconverting standard DVD player specifically targeted to those buyers who don't yet want to invest in the expensive Blu-ray format. This is a good move, although there are tons of competing products already on the market. Although Sony Corp. (NYSE: SNE) won a major victory in the Blu-ray format, convincing customers to buy the expensive hardware and movie software is still a major challenge. Perhaps a major Blu-ray partnership between Best Buy and Sony should be on the way?

In France, nuclear power has never gone out of style

The United States is a nation whose electric power generation system and grid is becoming increasing inadequate, even as the nation grapples with another energy problem -- the $4 per gallon gasoline era.

Moreover, an economic slowdown and a relatively mild summer have to-date reduced the typical electric load electric power generation plants would face, but that respite will end when the U.S. economy starts to expand at a healthy rate again. And when it does, electric power demand will increase.

What's one model the United States could follow to generate more electricity while the same time reducing coal-based pollution and climate change? France.

That's right: France. Nuclear power is experiencing a mild comeback in the United States, with 34 new reactor applications on file at the U.S.'s Nuclear Regulatory Agency. In France, it never left. Further, had the United States followed the French model, the U.S. would be vastly more energy self-sufficient today.

France: liberty, fraternity, equality, fission

Nuclear power never went out of style in France, and for this reason France is decades ahead of the United States -- and much of the world, for that matter -- regarding energy self-sufficiency, The New York Times reported. An astounding 77% of France's electricity comes from its 58 nuclear power plants, and it is a net-exporter of electricity to Europe. The United States has 104 nuclear power plants, which account for only 19.4% of its generated electricity, according to U.S. Department of Energy data, The Times reported.

Continue reading In France, nuclear power has never gone out of style

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DJIA-99.8211,088.41
NASDAQ-14.612,244.43
S&P 500-12.591,224.24

Last updated: September 05, 2008: 10:20 AM

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