Tech News: Samsung's New Tablets Cast a Wider and Cheaper Net Than Apple Inc's

By Josh Wolonick  JUN 24, 2013 12:43 PM

Plus, Vodafone to buy Germany's largest cable operator, Facebook introduces a new reader, and in Asia, Disney and Sony begin streaming films still playing in theaters.

 


Vodafone Will Buy Germany's Largest Cable Operator and Begin the "Quad-Play"

At a nearly 40% premium on Kabel Deutschland Holding AG's (OTCMKTS:KBDHF) share price, Vodafone Group Plc (NASDAQ:VOD) has agreed to buy Germany's largest cable company for 7.7 billion ($10 billion). Vodafone is the world's second largest mobile operator, behind China Mobile Ltd. (NYSE:CHL), and it is acquiring Kable Deutschland for its TV and fixed-line services, which will give it strategic positioning in the European market. The price of the offer was increased last week after a counteroffer was made by John Malone of Liberty Global PLC (NASDAQ:LBTYA). Though Malone may still make another offer, sources familiar with Kabel Deutschland say this is unlikely to happen.

The "quad-play," as it's called -- which is the combination of TV, broadband, mobile, and fixed-line services -- has become ubiquitous in European nations like France and Spain, yet German cable companies have remained, as of yet, relatively fragmented. The Vodafone-Kabel Deutschland deal will allow Vodafone to beat its German competitors, like Unity Media and Deutsche Telekom AG (OTCMKTS:DTEGY), to the quad-play punch.

This is Vodafone's largest acquisition in six years and its second major purchase of a European fixed-line network within the last year, after acquiring the British Cable & Wireless Worldwide PLC (LON:CW) in July 2012.

Prices Released for Samsung's New Galaxy Tab 3

The Galaxy Tab 3 7.0
Officially announced on June 3, Samsung Electronics Ltd's (OTCMKTS:SSNLF) new line of tablets have received their release dates and prices: Available on July 7 from retailers like Best Buy Co., Inc. (NYSE:BBY) and Amazon.com, Inc. (NASDAQ:AMZN), the Galaxy Tabs 7.0, 8.0, and 10.1 will cost $199, $299, and $399, respectively. The model numbers refer to the size of the devices in inches; the 8-inch and 10-inch models will run Android 4.2 with more powerful processors while the 7.0 will run Android 4.1.

The new Samsung tablets are cheaper than Apple Inc's (NASDAQ:AAPL) similar offerings, especially on the smaller-sized end, with the 7-inch iPad mini starting at $329, the 9.5-inch iPad 2 starting at $399, and the iPad with Retina Display starting at $499.

With the new tablet line joining its Tab 2 and Note lines, Samsung continues to offer a wide array of devices to meet varying consumer needs, a strategy very unlike Apple's more focused three-device approach. No single Galaxy tablet has been a major selling product, but together, the tablets have performed well. Over the last year, Samsung's tablet share has grown 283% to 17.9% of worldwide shipments.

The new Galaxy Tab 3 line will be available for pre-order tomorrow, June 25.

Facebook Is Developing a Mobile News Reader

Last evening, the Wall Street Journal confirmed rumors that Facebook Inc (NASDAQ:FB), for the past year, has been developing a news-reading product, internally referred to as "Reader." Though the report mentioned few details, it did state that the current version of Reader is similar to the popular news-reading app Flipboard, which currently has over 50 million users. Reader features posts from users, content providers, publishers, and advertisers to create a personalized news feed that is optimized for mobile devices.

The news comes just a week before Google Inc (NASDAQ:GOOG) is set to discontinue its own Reader app. Facebook -- along with Flipboard and similar apps like Zite, Pulse, and Google Currents -- will likely be vying for the void left on July 1. 

Facebook, constantly looking to recoup the value it lost after its IPO, has invested heavily in mobile. Reader will fit into that strategy, diversifying and tightening the social network's presence on phones and tablets. On the other hand, Facebook has never been fully regarded as a source of news, and the Reader may prove to be a stretch for the company.

In South Korea, Sony and Disney Are Streaming Films That Are Still in Theaters

In an effort to curtail movie piracy in Asia, The Walt Disney Company (NYSE:DIS) and Sony Corporation (NYSE:SNE) have both begun releasing major theatrical films on-demand while they are still in theaters. Both studios are employing the new policy in South Korea, the world's eighth largest film market. Recent films include Sony's Django Unchained, which went on-demand only three weeks after its April, South Korean release, along with Disney's Brave and Wreck-It Ralph, which went on-demand four and five weeks after their respective release dates.

According to the Wall Street Journal, executives of the four other major studios have said that they are paying close attention to the efforts of Disney and Sony in South Korea. In the US, it is standard practice for top cinema chains, including Regal Entertainment Group (NYSE:RGC) and AMC Entertainment Holdings Inc., to refuse to play films that don't have a guaranteed 90-day gap between theatrical release and DVD/streaming release. As Patrick Corcoran, the spokesman of the National Association of Theatre Owners has said, "A short window or simultaneous release muddies the value proposition being offered to consumers."

Disney has experimented with early on-demand release before: In 2011, the studio released Tangled on-demand in Portugal, six weeks into the theatrical run. Also in 2011, Warner Bros. Entertainment Inc. (NYSE:TWX)., Universal Pictures (NASDAQ:CMCSA), and 20th Century Fox (NASDAQ:NWSA) all experimented with earlier on-demand availability, through satellite broadcaster DirecTV (NASDAQ:DTV). However, in those cases, films were released 60 days after their American debut and at the cost of $30 per film, which is a full six times the standard on-demand price after 90 days. The results of the 60-day window experiment were widely considered unsuccessful.

Though theaters and studios are worried about potential displacement, some analysts maintain that the move to earlier on-demand does not raise any need for concern. Kim Young-gi, of the Korean Film Council, has said, "Movie-going is a cultural experience, VOD [video on-demand] is like watching TV. I expect their markets will remain separate." 

Either way, Sony and Disney are still playing the movies cautiously in South Korea, while the other big four are waiting anxiously to see how the future of movie-going and viewing will develop.

Follow me on Twitter: @JoshWolonick and @Minyanville
No positions in stocks mentioned.