Friday, July 16, 2010

Apple clears up the antenna issue - Every one has the problem!

The pundits will of course claim that Apple had a mea culpa, but Steve Jobs cleared up the antenna issue demonstrating quite convincingly that iPhone 4 is not alone in this problem.  Of course, iPhone 4 is the market leader and media loves to take potshots at the market leader so iPhone 4 has become the poster child for this problem.  So I don't think media is going to let up on this till they find some other juicy morsel.  But the consumers have spoken - they love iPhone 4 and are buying it in spades.  Apple's announcement to give away the bumper or case for iPhone 4 will only drive more consumers towards Apple.  In fact I myself was in the ATT store today where I learned that the wait time for iPhone 4 is 2 weeks!!  

Obviously there will be a cost to Apple, but in the end the increased publicity and free case will translate into greater sales for Apple and a positive bump to the stock.  

With this announcement, Apple has once again demonstrated how to serve its customers.  What ever the critics might say, I bet the Apple customers will once again rate Apple above and beyond its competitors in customer service.

Jiyaji after mundan

Apple Knew of iPhone Antenna Risks -

Apple Knew of iPhone Antenna Risks - "The mounting iPhone 4 controversy has hit a receptive ear in Washington, as Sen. Charles Schumer (D., N.Y.) Thursday wrote to Mr. Jobs urging Apple to come up with a 'permanent fix' to the problem at no cost to customers."

This is just plain funny! If any one cares about finding a solution to this problem quickly, it is Apple!!

Wednesday, July 14, 2010

F.D.A. Panel Votes to Restrict Avandia - Prescriptions Blog -

F.D.A. Panel Votes to Restrict Avandia - Prescriptions Blog - "A majority of the advisory panel of the Food and Drug Administration voted today to restrict the sales of Avandia, a controversial diabetes drug, because of its potential risk for causing heart attacks. The 33-member advisory committee was deeply divided. Twelve voted to remove Avandia from the market altogether; 10 for continued sale but with new label revisions and possible restrictions; 7 to add more warnings and 3 for no change at all.
But the votes can also be viewed as a decision by a majority, 21, to continue allowing sales of Avandia, with more restrictions. A final decision will be made by the F.D.A. at a later date."

Debate rages on the net about the value of today's ODAC. It will be interesting to see how the market place reacts to today's news. All this adverse publicity has already damaged Avandia, but after all this if the drug does stay on the market will it get any use at all.

Why Morning People Rule the World

"'When it comes to business success, morning people hold the important cards,' Randler told the Harvard Business Review of his research' [T]hey tend to get better grades in school, which gets them into better colleges, which then leads to better job opportunities. Morning people also anticipate problems and try to minimize them. They're proactive.' (Not that evening people are life's losers: They're smarter and more creative, and have a better sense of humor, other studies have shown.)"
I N T E R E S T I N G !!!!!

I have no sense of humor, but have little bit of creativity. However, I did not get into "better" college even though I did get better grades - just not better enough! What does that make me!

Open letter to Mr. Manmohan Singh about litter on Indian streets

My daughter who is currently visiting her grand parents in India has something to say to the Prime Minister of India.  This is the first time she is visiting after she started understanding things, and the amount of litter on the streets in India really bothered her.  So she dictated a letter to the Prime Minister of India (she wanted to send to the President, but I told her that the Prime Minister is the most powerful person in India and could do something about it).  Below is the text of her letter.

Dear Mr. Manmohan Singh,
Why is there so much litter in India?  It seems no one takes care of the earth here - and everybody throws litter without thinking.  If one person throws litter, other person watching this thinks it is ok to litter and everybody starts to litter.  So, can you tell people not to litter?

I learned in school that littering polutes the air and the environment, and people can get sick.  So my teacher told us not to litter.  So please ask people not to litter.

 I like India very much - its just that I don't like so much litter on the streets.  It makes India look dirty, and no one should it make it look dirty and ugly.  It makes the beaches look dirty and people cannot enjoy the beach.

From Jaya Joshi (and Sunil Joshi who typed it up).

Little children often tell it as it is, as Jaya is doing here.  In a few years Jaya will learn that it is considered in impolite to say such things and learn to be politically correct.  But although the truth may be uncomfortable to us, it is listening to such unvarnished truth that can help us become better.

I doubt Mr. Singh will ever read this letter, but if at least one person is motivated to throw one less thing on the streets of India, Jaya will have made some difference.

Tuesday, July 13, 2010

Jiya in summer outfit

Summer is a great time to take pictures of kids.  Colorful outfits with equally colorful background - just makes it so easy to take nice pictures!

Monday, July 12, 2010

Currency Risk in Business

Fred Wilson on has a nice blog post explaining currency risk in business that is worth a read. For those involved in the US business, currency fluctuations plays little role in day to day business (i.e. sales) so this notion of impact of currency fluctuations is at first a little difficult to understand. But gaining an understanding of the impact of currency fluctuations on your bottom line is critical in International business.

As FW's post says, even if nothing real changes in your business, the change in exchange rate over which you agree to convert the local sales into US dollars can have a significant impact on your profits. So, as it happend last year with the Latin currencies (which experienced significant depreciation over the year), while you might be "making your numbers" in local currency in fact in US dollars you may have under performed - simply because the local currency is not worth as much in US dollars any more.

One can only imagine the demotivating effect this would have on people working in markets where currency is depreciating rapidly - one month you are a top performer for delivering the results, the next month you are not even making your numbers!  Even though you are still selling the same number of widgets the sales are not worth as much in US dollars.

For example - you can see from the two year Indian Rupee/USD currency exchange rate chart below - the havoc this degree of fluctuation must have played in US companies doing a lot of business with India. Let's say you are a US company selling a $1 widget in India for Rs. 50 per widget.

Based on the chart above, in US dollars you made $1 only in December 2009. Before December, you earned 84 cents per widget as the exchange rate at that time was Rs. 42 to a dollar. On the other hand in March you made little more (3 cents to be precise) than $1 per widget because the exchange rate had climbed to Rs 51.6. Since that time the rate has come down steadily to below Rs.45 last April costing company money in USD.

This can't be motivating to sales people in India - they may be underperforming in US dollar terms even though their sales in local currency are just fine.

The way companies manage this exchange rate fluctuations internally is to adopt a certain "budget exchange rate" which is used to calculate the current performance. In this instance, the company may decide that they will convert Indian Rupee sales in to US dollars at a standard rate of Rs. 45 for the entire year to be adjusted up or down for the next year depending on the prevailing market circumstances. This would then take away the uncertainty associated with exchange rate fluctuations.

Of course all this does it help you manage the internal expectations. But it does little to help you protect your bottom line.  For instance, if you report your earnings in US dollars, the real impact on your bottom line is still there, to be found reported in the annual report in the form of favorable or unfavorable currency impact.  In today's interconnected global economy this is unavoidable. However finance gurus do have hedging strategies they can use to minimize the currency impact.

Saturday, July 10, 2010

Times are exciting in Indian Pharma sector

The drumbeat of negative news around the US Pharma continues unabated. The latest piece of bad news that Merck is laying off 15% of employees, comes on the heals of Pfizer announcement laying off ~20,000 employees after the Wyeth merger. According to a report published by Challenger, Gray & Christmas, in the first half of this year alone drug makers announced that they planned to cut about 35,000 jobs. Bad news like this is enough to strike fear in the hearts of the most courageous pharma executives!

Except, perhaps if you are in the Indian pharma industry.

While the US pharma industry is buffeted by one bad news after the other, times seem to be downright giddy in India. In fact, all this bad news here in the US seems to be translating into significant opportunity for the Indian pharma industry. An article in NY Times seems to indicate that the Indian pharmaceutical industry will grow 13% this year, reminding me of excitement I felt in late eighties when the US pharma sector was growing dramatically on the shoulders of new scientific discoveries in both BIG pharma and the nascent biotechnology industry. India today seems to be poised for significant growth leveraging its low costs high value scientific talent into a strategic advantage aimed towards making the pharma sector the center piece of the future global pharma industry.

A report published by the Organization of Pharmaceutical Producers of India seems to confirm these ambitions.
In drug discovery and development services, India is emerging as a hot spot, growing at ~ 65%, i.e. more than three and half times the global growth rate driven by strong chemistry capabilities, skilled manpower and cost value proposition.
This new maturity of Indian drug industry has already generated significant excitement in the sector with multi-nationals increasingly coming to India to buy into the low cost development capabilities exemplified by the Sanofi Aventis acquisition of Shanta Biotech and the low cost manufacturing capabilities demonstrated by the the $3.7B acquisition of Piramal Healthcare by Abbott. In fact, the Piramal acquisition goes beyond the low cost manufacturing capability acquisition strategy; it acts as a strategic foothold in a market place that is about to enter the explosive growth phase. Not only does this acquisition make Abbott the largest pharmaceutical company in India today, it also creates unparalleled growth opportunity for the future; Abbott expects to grow its business to $2.5B by year 2020, putting India at the centerpiece of Abbott's growth strategy.

So what does it mean for the Pharma hands of the United States? Two things...

1) If you are young and are looking for an adventure, it might be worth exploring opportunities in India. If the computer software industry is any guide, this sort of growth in Pharma industry is going to create significant opportunities for the adventurous. Not only will there be great opportunities to develop skills and learn business, professionally it might be an opportunity to grow at a much faster rate than here in the US. After all, high growth companies creates great many opportunities for promotions compared to low growth rate companies - just ask the Googlers and Pfizer employees!

2) Second, for the experienced and talented hands who have developed their skills in the US, there will be unprecedented opportunities for you too. Explosive growth has to be managed or else it can become destructive like the flooding of the river caused by torrential rain. Seasoned and mature hands are needed to man the controls and guide the industry through its early growth years creating opportunity for top level and mid level management. So, if you are looking at a stagnant career in the US and potentially a "sword of damocles" hanging over your job, India might just give you the opportunity for a second career before you are ready to hang up your spurs.

Of course it is important to remember that India is not the US and working in India is not like working in the US. Inefficiencies abound and challenges present themselves at every corner. If you are faint of heart who shrivels at the first sign of bureaucratic hurdles of a developing country, the India opportunity may not be for you. But if you are the adventurous type, looking for a new challenge, India presents an unprecedented opportunity to get involved at the "ground floor" and contribute into building some thing more substantial than just pushing the next visual aid past the scrunched up eyes of the internal review team scrutinizing your promotional piece to ensure that you don't miss the apostrophe in the fine print at the bottom of the page.

Heart Break in South America

The South American heart break continued today with Uruguay losing to Germany 3-2. But the spirit and guts shown by the Uruguayans made the usually forgettable game a very memorable one. Up until the last minute, the Uruguayans played as if they were playing in the world cup finals showing grit and determination that has made them the talk of the 2010 World cup. The Germans won, but Uruguayans showed the spirit of winners. One can only imagine how the game would have ended if Diego Forlan's amazing kick at the last second had bounced in to the net rather than out of the net.

Of course, none of this means that Germany played poorly. Rather the Germans displayed their superb mastery through out the game with sharp passing and accurate kicks to the goal. Still, the team did not control the game as they have controlled the games until now, and in the end won but just barely.

Tomorrow we await the big game.