Samsung flash production back on track

Samsung's flash memory production is back on track, after an outage caused disruptions on five production lines.

According to a Reuters report, the plant near Seoul was back in operation midday Saturday and Samsung expected total damage from the incident to be about $43 million, smaller than an earlier estimate. Some analysts had feared the outage could wipe out a month's worth of flash supply from the number-one maker of NAND flash memory, sending prices skyrocketing.

• Research: iPhone demand remains strong

The outage was bad news for Samsung, but good for competitors such as SanDisk (SNDK), Micron Technology (MU) and Intel (INTC), who stood to see their profit margins improve on the flash they were able to bring to market.

Apple (AAPL), a major Samsung customer for the flash that handles storage for iPods and iPhones, now seems unlikely to suffer the supply-related constraints some feared yesterday.

blogs.business2.com

Wii sales soar; PS3 sales stumble.

November sales data gives Nintendo a 2-1 sales advantage over Sony.

NEW YORK (CNNMoney.com) -- You weren't imagining things. Finding a PlayStation 3 in November really was a Herculean task.

Sony (Charts) sold just 195,000 PS3 units in its first 13 days on shelves, according to analysts quoting preliminary numbers from The NPD Group, which tracks video game sales. That's well short of the 400,000 the company had projected. Nintendo's Wii console, another hot holiday item, sold 476,000 units - a more than 2-1 sales advantage.

Sony's PS3 has been continually out of stock at most retailers.

Microsoft's (Charts) Xbox 360, fueled by the critically praised new title "Gears of War," sold 511,000 units, which John Taylor of Arcadia said puts it on track for 2006 sales of roughly 4 million.

The real surprise of the month was the strong sale of handheld and legacy systems. The Nintendo DS, which was one of last year's hottest items, continues to sell extremely well. November saw sales of 920,000 for the device (Taylor's estimate for the month was just 650,000.) The Game Boy Advance, meanwhile, continues to sell well, with another 639,000 units sold.

Sony saw the PlayStation 2 continue to sell well, moving 663,000 units. And 413,000 PSPs (PlayStation Portable) were sold in November.

The NPD Group declined to provide the information, citing errors in "historical data" (which is typically used to provide comparisons to previous months and years). November 2006 data is correct, however.

Taylor said both Sony and Nintendo are actively working to get additional units on retail shelves. Sony, he said, is shipping roughly 75,000-100,000 units to the U.S. each week. He expects there to be 600,000-800,00 PS3s available in the U.S. by year's end.

Nintendo's strategy is slightly different.

"Retailers were told by Nintendo that there would be three major waves of product," said Taylor. "The first wave was at launch, then there was one immediately thereafter, which was in Nintendo's warehouse, and a final wave is due the week before Christmas. ... Retailers who had ads planned throughout the holidays, we heard, would get supply as well, but those are rifle shots instead of waves."

Game sales were stronger than expected in November. A report from Michael Pachter of Wedbush Morgan Securities quotes NPD software sales figures of $804 million. Of that, $363 million was spent on 'next generation' machines (which Pachter defines as the PS3, Wii, Xbox 360, DS and PSP).

Xbox 360 and DS sales led the charge.

Before the launch of the PS3 and Wii, many speculated Microsoft would benefit from the expected shortages. The theory went that consumers, frustrated by their inability to find a new Nintendo or Sony system, would pick up an Xbox 360 for loved ones.

Now, though, analysts aren't sure that is happening.

"The kicker for Microsoft is going to be the psychology of scarcity in a seasonal environment where people need to make a decision," he said. "It appears, based on these numbers, that they might be buying handheld systems instead."

By Chris Morris, CNNMoney.com staff writer

Don't cry for the Zune just yet

Microsoft's challenger to the iPod takes second place in digital audio player market in first sales week, according to report.

NEW YORK (CNNMoney.com) -- Reports of lackluster sales of Microsoft's Zune that surfaced earlier this week might be a bit premature.

Microsoft's newest MP3 player, which launched just over two weeks ago, took second place in the portable digital player market in its first four days of sales, according to numbers generated by the market research firm NPD Group.

Microsoft's new Zune MP3 player did not fare as poorly as some predicted during its first week of sales.

"Considering it is a new brand, it's a very good first-week showing," said Ross Rubin, director of industry for NPD Group.

Microsoft's (up $0.15 to $29.54, Charts) Zune took 9 percent of digital player sales, according to NPD, edging out Sandisk (down $0.85 to $43.92, Charts), but behind Apple (down $1.09 to $90.72, Charts), whose iPod models have long dominated the MP3 player market.

Another research agency, Current Analysis, reported a somewhat similar sales reading during the same week. For the same week ending November 18, 2006, the Zune took 7 percent of the MP3 player market, falling behind both Apple and Sandisk.

Zune vs. iPod: the battle begins

While the two reports look strictly at sales at major U.S. electronics retailers, online sales of the Zune appear not to be as favorable.

As of midday Wednesday, Zune ranked as the 18th most popular MP3 players sold at Amazon.com (down $0.81 to $40.11, Charts), behind most models of the iPod.

Shawny Chen, a research analyst for Current Analysis, says that in order to become a serious contender against Apple, Microsoft will have to make further adjustments to the Zune, especially considering the number of unfavorable reviews the device has received so far.

"Microsoft will have to come out with an improved Zune that touches on the very features that people are disappointed with this model, such as the limited WiFi capability," said Chen.

Kathleen Maher, a senior analyst at Jon Peddie Research, notes that even if the Zune is off to a slow start in the MP3 player market, Microsoft has had a lot of success launching a new product, tweaking it and ultimately satisfying consumers.

"It doesn't bug them to dump a bunch of money into an experiment and rejigger it along the way," said Maher, pointing at the success of the Xbox. "It's worked reasonably well."

By David Ellis, CNNMoney.com staff writer

GE brings digital cameras to life

The industrial giant will add digital cameras to its extensive product lineup starting in April.

NEW YORK (CNNMoney.com) -- General Electric and General Imaging Co. announced Tuesday that the two companies will team up to design, manufacture and distribute a line of GE-branded digital cameras.

Features such as image stabilization, high light sensitivity, and panoramic stitching will be standard, according to the companies.

GE digital cameras will start with 7 megapixels and 2.5-inch LCD screens. Higher-end cameras will offer up to 12 megapixels and 3-inch LCD screens.

"We were seeking to enter the digital camera arena and found a perfect partner," Brad Irvine, GE (Charts) president of trading and licensing, said in a statement referring to General Imaging.

GE restates earnings since '01

"GE is a brand that consumers around the world know and trust," General Imaging chairman and chief executive Hiroshi "Hugh" Komiya said in the statement.

"This is a brand known for innovation and technical leadership. We fully intend to deliver on the GE brand promise and even further enhance the GE brand value."

Entry-level GE digital cameras will come with 7 megapixels of resolution and 2.5-inch LCD screens. Higher-end GE cameras will offer up to 12 megapixels of resolution and 3-inch LCD screens. A photo printer will also be included in the line.

The cameras will be available in North America in April. Shipments to Europe and Asia are scheduled for later this year, the companies said.

(money.cnn.com)

PlayStation 3 price cut may be ahead

Sony game console's hefty price tag has drawn criticism; Goldman Sachs analyst expects worldwide price reduction of $100 later this year.

NEW YORK (CNNMoney.com) -- Japanese electronics giant Sony may cut the price of its PlayStation 3 by $100 worldwide in October, according to an analyst with Goldman Sachs.

Yuji Fujimori wrote in a note Tuesday that lowering the cost of the game console, which competes with Microsoft's (Charts) XBox 360 and Nintendo's (Charts) Wii, will not undermine the unit's long-term profitability.

The PS3, criticized by consumers and industry watchers for its high price, can cost up to $700, although the basic model retails for $499.

"The PS3 price has long been cited as high," Fujimori wrote, noting that cutting the price of game consoles has historically quadrupled volumes.

Fujimori sees simplification of design aiding PS3's profitability as well, noting Sony's (Charts) original PS began with 700 components and concluded with 200, while the PS2 started with 2,000 parts and finished with 600. The PS3 prototype had 4,000 components but now a shift to around 2,000 is in the pipeline.

Earlier in March, press reports in Japan said Sony is planning to introduce cheaper microprocessor chips for its PS3 to help bring down the price.

(money.cnn.com)

Oil tumbles on economic jitters

Crude sharply lower as fears about U.S. economy shake world markets.

LONDON (Reuters) -- Oil fell below $75 a barrel Monday, extending the previous session's decline as concern about the United States economy rippled through financial and commodity markets.

Those worries were heightened after U.S. stocks fell Friday, following a report showing weaker than expected job growth last month and another on slowing service sector growth.

Video More video CNN's Phil Black reports on Russia's symbolic claim to a fortune in natural resources thought to exist under the Arctic. Play video

Crude fell $1.43 to $74.05 a barrel in electronic trading.

"The weaker macro numbers are raising the prospect of softening U.S. commodity demand in general, and energy demand in particular," MF Global said in a report.

"Making matters worse is the parallel crisis we are seeing in the sub-prime markets, where the ripples have now broken outside the confines of this niche area."

London Brent was down $1.19 at $73.56.

"The sell off was continued from Friday and largely due to the decline in the U.S. financial markets. Some investors may have taken risk adjustments and are selling out of liquid commodities assets to cover commitments in other markets," said Gerard Burg at the National Bank of Australia.

"Apart from the U.S. factor, there are no major fundamental stories dragging down prices."

European shares opened more than 1 percent lower before recovering slightly. Emerging market shares dropped around 1.8 percent and Japanese equities slipped 0.4 percent.

Crude has eased since touching a record high of $78.77 last week. The reluctance of the Organization of the Petroleum Exporting Countries to increase crude output has limited losses.

Global economic growth and political turbulence are the reasons for rising oil prices, a Kuwait oil ministry official said in remarks published Sunday.

OPEC meets on Sept. 11 to set production policy, and some officials have said the exporter group does not need to increase supplies.

Oil prices affect the revenues of such companies as BP (Charts), Exxon Mobil (Charts, Fortune 500), ConocoPhillips (Charts, Fortune 500) and Chevron (Charts, Fortune 500).

(money.cnn.com)