Results from the first quarter of 2006 did not satisfy PC manufacturer Dell. For the first time since 1989, the Texas-based company lost market share, according to Gartner, dropping from 16.9% in 2005 to their current 16.5% holding. During the same period, Dell’s market share in the United States slipped even further, from 32% to 29.9%.
To keep up with its competitors, the company founded by Michael Dell has opted, among other moves, to open physical stores. The company just opened a store in Dallas and has plans to do the same in New York in the fall. Dell says that its stores will carry only display models as it will be maintaining its direct-sales model.

After suffering an 18% drop in profits for the first quarter of 2006, Dell has decided to rethink its strategy. The Texas-based company aims to improve on one of its weak points: customer relations. With this goal in mind, the company announced the opening of two physical stores in the United States. They will create a space in the “Dell style” where potential customers can feel at home and get help with choosing products, which will continue to be sold online.

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Title: Contenidos Digitales. Nuevos modelos de distribución on line (Digital Content. New Online Distribution Models)
Source: Grupo de Análisis y Prospectiva del Sector de las Telecomunicaciones (GAPTEL)
Date: June 2006
Abstract: Audiovisual entertainment on the Web last year generated profits of €3.133 billion. Digital television is the service experiencing the highest growth, with 2005 revenues having reached €1.493 billion, followed by DVD titles, which saw profits of €628 million, and video games, which generated €537 million.
According to research by GAPTEL, the digital video market is seen as one of the major business opportunities for Internet service providers and telecommunications operators. This market will allow them to increase both revenues and ARPU. GAPTEL also notes that as the availability of digital content rises, it will need to be accompanied by an increase in household bandwidth in order to guarantee their delivery. For this reason, the group proposes a speed of 20 megabytes per second to ensure high quality, although in the medium and long term this speed should be increased to at least 100 megabytes per second to allow for simultaneous use of multiple devices.
The study also shows an increase in revenues for the recording industry, which at 3.9%, hit the €480 million mark. Thus the trend that started back in 2001 is being reversed. The experts at GAPTEL also consider it advisable for the industry to adapt its existing sales models to the current environment (which has evolved from disc sales to music sales), and predict that music will become a strategic item for mobile telephone operators and manufacturers.
With regards to the video game sector, the study points out that although Spain is the fourth largest European market in terms of sales, its industry is underdeveloped and scarcely competitive, though the analysts see mobile gaming as a new opportunity for development in the sector.

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Title: Why Half of Europe Net Users Don’t Bank Online
Source: Forrester
Date: May 12, 2006
Abstract: Half of Europe’s 160 million Internet users have either never banked online or have tried and given up. The study by Forrester lists some of the barriers that are preventing widespread acceptance of Internet banking. First off, more than half of the users cite their satisfaction with the service provided by other channels such as branches, cash machines or telephone banking. Secondly, 25% of users who have given up on electronic banking claim to have had a negative online experience. Another key obstacle is the fear of phishing and password theft. Furthermore, those who have never used online banking services say that they do not see enough advantages for doing so.
The analysts at Forrester make several recommendations for combating the reluctance of Internet users and increasing the penetration of online banking. These include simplifying the registration process, improving user friendliness and the functionality of websites and offering incentives that encourage customers to leave the offline channel and go online.

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Apple’s recent success is encountering some rough terrain. In addition to the accusations of exploitation of workers in iPod factories, several European countries are now rejecting the iTunes proprietary digital music format. France was the first to make a law—which is still in Parliament—calling for the anticopy system to be interoperable with MP3 players made by other manufacturers. Now in Norway, a consumers’ association contends that the fact that the songs sold via iTunes are not compatible with its competitors’ portable players violates the country’s legislation. In fact, the group has given Apple an ultimatum, demanding that they resolve the problem by June 21—a date which has since been moved up to August 1.
Norway’s stance is being backed by Sweden and Denmark, which have similar legislations in place. In the US, the Free Software Foundation has added its name to the European petitions calling for iTunes interoperability.
Those who have lined up on the side the company founded by Steve Jobs maintain that Apple is defending its territory in the digital music market and that the same should be required of other sectors, such as that of video games. But the situation currently faced by Apple resembles the one that Microsoft went through, when the European Commission accused the company of abusing its dominant position  and ruled in 2004 that the company should pay a fine of €497.2 million. Did Apple learn from the experience of its competitor? If not, its iTunes service could be forced to shut down in those countries and would run the risk of having others follow suit.

Articles in BusinessWeek, Financial Times (payment service) and U.S. News & World Report

As with other sporting events such as the Super Bowl, the World Cup is causing a considerable increase in Internet traffic, with users looking to watch the games via streaming video. But are P2P networks prepared to handle so many simultaneous connections? Various experts had previously stated that massive consumption could slow down the speed of the Web and cause some websites to collapse. In fact, in the days prior to the start of the tournament, the website of the British daily The Sun was inactive for several hours due to the avalanche caused by the high number of users trying to get registered.
The World Cup is also benefiting the takeoff of mobile television, thanks in part to some broadcasters offering recaps with the day’s highlights and magazines on the tournament created specifically for mobile phones. Several consulting firms, including Gartner, expect that for sporting events in the coming years—such as the 2008 Olympic Games or the next World Cup in 2010—mobile television will already be a fully established service and will no longer face these kinds of problems.

News in BBC News and The Register
Article in Computing

On July 6, the PwC&IESE e-Business Center will host its annual event in Madrid, entitled ‘ICT as a General Management Responsibility.’ The day conference will include the participation of Mark D. Lutchen, who will offer a series of practical guidelines about how innovative ICT management paves the way for achieving company goals.
IESE professors Josep Valor and Sandra Sieber will address the question of whether CIOs and CEOs are actually speaking the same language and pursuing the same goals. Finally, representatives from Bank of Spain, Correos and Endesa will share their experiences on IT management decisions.

Information and communication technologies (ICTs) have allowed Spanish companies to cut costs, though not without having to invest more in technology. New systems have also transformed the way people work in organizations, creating the need to train users for their new tasks. Is all this affecting companies' organizational structure? How are Spanish companies dealing with the changes? Are they responding any differently from companies in other countries? These are some of the questions addressed in the study "ICTs as an Agent of Change in Spanish Companies: Current Situation and Future Trends", published by the e-Business Center PwC&IESE. This text is the translation of a e-Business Center PwC&IESE study that was published by the Center in Spanish in June 2005 and was carried out by IESE professors Josep Valor and Sandra Sieber.

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