Nokia Looks Attractive After This Acquisition

There was a point in time when the Finnish phone maker Nokia (NOK) was the undisputed champion in the mobile handset market and had prominent presence in several other business segments. However, after the sale of its handset business to Microsoft (MSFT), Nokia has been reduced to a telecom hardware provider and global location based service provider only.

While many consider this to be a sad situation for the phone maker, Nokia is able to see through the situation and is moving forward aggressively to the opportunities that are available. Recently the company completed the acquisition of Desti, a personalized travel planner that uses artificial intelligence to provide the user exactly what information he wants. Desti originally comes from SRI International, the same company that had developed Siri, the app that now Apple (AAPL) owns so proudly.

Nokia's Latest Possession

The acquisition of Desti by Nokia and its addition to the Here mapping division comes as a well planned move from the company. Though Here accounts for only 10% of Nokia's remaining business, the company is not talking the offering lightly. Nokia believes Desti's expertise will add greatly to Here's growth and help the app gain better user acceptance.

Desti has been available for consumer use for some time now and the overall customer experience has been very pleasing. However, following this acquisition, the app will no longer be available to consumers and it has already been removed from the App Store, and Nokia plans to complete shut down the app in the coming 90 days. Post all this, the only way one will be able to use Desti's features will be through Nokia Here. The Finnish company will be working on combining both the offerings over the next few months.

Now that Nokia handsets are not a part of the company anymore, Nokia has very different plans to support its top-line. The company will be making its offering available to third-parties. But, the question is, will Nokia limit the benefits of Desti only to Microsoft devices, or will it go for other platforms also. Industry experts and analysts are of the opinion that over the span of next four years, Nokia will keep the service exclusive to Microsoft because of the mapping deal signed by the companies. After that, Nokia will surely launch Here on parallel ecosystems. This will also give some time to the app to gain popularity.

Competition

Leisure & Lifestyle is a segment that has witnessed huge growth in the past couple of years and industry experts believe the segment has unimaginable upside potential. No wonder why so many companies are thinking of getting in to it while it is still in the development stage.

It's not just Nokia that understands the growing importance of location based services that will aid travelling. Google (GOOG) too has this in mind and is working rigorously to develop Google Maps. Recently the company acquired Quest Visual, the maker of the Word Lens app that provides instant translation of words from one language to another. The Mountain View based giant will be incorporating the features in its translation offering, as well as in Google Maps. Apart from Quest Visual, Google recently also acquired Skybox Imaging, a company that builds satellites and specializes in satellite imaging and video. Analysts believe the capabilities of Skybox will be added to Google Maps to enhance the app.

Departing Thoughts

Nokia missed the smartphone train once and lost most of its market share and eventually the story ended with the sale of its handset business to Microsoft. The company surely doesn't want to go through all this ever again. Nokia has been investing a lot of time and money in R&D and is coming up with ways to enrich its remaining offerings. The company is trying to understand the pulse of the consumers and after this acquisition, it seems, Nokia is on the right path. The journey will not be easy for sure with Google and Apple also focusing on the same audience, but the Finnish company will have to find ways to make its offerings attractive enough to gain substantial consumer acceptance.

About the author:Quick PenA seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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The top 5 reasons why you're broke

In the event of a financial catastrophe such as a job loss, would you be able to cover your bills and expenses for three months? What about six months? If you answered "no" to either of these questions, you fall into the same category as around half of Americans. According to a Bankrate survey, 55% of women and 45% of men do not have at least three months' worth of emergency savings.

The official poverty rate in the U.S. is 15%. That's 46.5 million people earning less than $11,670 per year ($972.50 per month) for single-person households. Families of four in this category are earning $23,850 or less annually.

Although many of the lower-income earners are among those who have no emergency savings and are in essence broke, they are not the only ones. Most Americans -- 76%, in fact -- live paycheck to paycheck. This category includes those across many income levels, particularly middle-income earners. Why is this? Why is the average consumer who is earning a middle-class income broke? Here are five reasons why.

1. Employment and earnings

In all likelihood, you're earning less than the middle-class members of some of the previous generations. A family that earns a median household income of $51,017 today is a fairly accurate representation of a middle class household in the United States. In 1969, a middle-class household earned $54,817 in today's money. In 1979, that number went up to $54,993 in today's money. By 1999, middle-class households were earning $59,758 in today's dollars — more than $8,700 per year more than they are making today.

In addition to the middle class earning less than it did in the past, the recent economic downturn caused a spike in unemployment in 2009, where rates reached 10% in October and then remained at 9% or above for the next 23 months. When there are that many people unable to find a job who are actively looking, many of them end up obtaining low-paying positions for which they are overqualified.

2. Prices

While you're earning less! , you're also paying more for the goods and services you purchase. A publication by Daily Finance compares prices between 1999 and 2009. A gallon of gas was $1.30 in 1999, and by 2009, that price went up to $2.56. Today, you pay an average price of $3.65 per gallon at the pump. For a McDonald's Big Mac, you'd shell out $2.50 in 1999 and today, you're looking at an average of around $4.60.

3. Lifestyle and overspending

Consumerism is such a strong ideology in today's society. One estimate indicates that 52% of Americans are spending more than they earn. The Bureau of Labor Statistics' consumer expenditure surveys reflects this sentiment. Annual expenditures exceed income across several locations, income levels, and demographics.

Each time the newest piece of technology hits the market, consumers rush out to purchase it. Wants have turned into perceived necessities, resulting in more spending and less savings.

4. Student loans

In addition to earning less and spending more, you may also begin your career in debt. Starting out behind, it may be difficult to get caught up while paying your loans on top of a home, vehicle, and all of your other expenses. Student loan debt in the U.S. adds up to a combined total of more than $1 trillion.

5. Credit and debt

Interest on revolving lines of credit may result in long-term high monthly payments. The result is you end up paying for a single credit card purchase or series of purchases for several years. As of late 2013, Creditcards.com reports the total revolving debt in the U.S. was around $860 billion, with the average cardholder owning 3.7 credit cards each.

So while you are earning less, spending more, and starting your adult life in debt, you are also borrowing additional funds at high interest rates just to get by – that is why you are broke.

Wall St. Cheat Sheet is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

IBM Eyes Investments in Linux (IBM)

On Tuesday, New York-based “Big Blue” bellwether IBM Corp. (IBM) announced its commitment to developing and investing in open source software, namely Linux.

IBM re-affirmed its dedication to work more closely with the Linux OS in light of the LinuxCon event taking place this week. The company is reportedly setting aside roughly $1 billion over the course of the next four to five years to invest in the development of Linux-based technologies and platforms. Sources say the money will likely go into building a “cloud” based on IBM Power servers running Linux; the company did not disclose whether it was financing Linux developments internally or through third-party projects.

IBM shares sank lower on Tuesday, shedding 0.51% on the day. The stock is flat YTD.

Wal-Mart fights back at proxy firm

NEW YORK (AP) — Wal-Mart, the world's largest retailer, fired back at a prominent proxy advisory firm that critiqued the company's executive pay plan and how it handled an overseas bribery probe.

Institutional Shareholder Services earlier this week urged shareholders to vote against Wal-Mart's executive compensation package and asked them to back a resolution for the appointment of an independent chairman.

It also recommended shareholders vote against the re-election of board members Robson Walton, the company's chairman, and Mike Duke, recently Wal-Mart's CEO. The ISS cited the failure of the board to provide more information to shareholders about specific findings of an investigation into bribery outside of the United States.

Those issues go to a vote at the company's shareholder meeting June 6. The meeting will be held in Fayetteville, Arkansas, about 30 miles from the company's headquarters in Bentonville.

In a filing with the Securities and Exchange Commission Thursday, Wal-Mart said that the ISS analysis "misconstrues the nature and operation of Wal-Mart's executive compensation program."

Wal-Mart said the ISS analysis is based on information provided by CtW Investment Group, a union-backed organization that has a long history of opposition to Wal-Mart.

ISS cited changes that it believes have diminished the consistency of performance goals set for company executives.

Wal-Mart said its pay structure emphasizes performance and is "intended to closely align the interests of our named executive officers with the interests of our shareholders."

Wal-Mart pointed out that because the company's fiscal 2014 performance was worse than expected, Duke, who stepped down as CEO earlier this year, was paid about $1.5 million less. It also said that the bonus paid to Doug McMillon, who succeeded Duke, was nearly $520,000 less.

Wal-Mart said that ISS's request for disclosure of "specific findings" in regard to possible violations of the Foreign Corrupt Practic! es Act, which can include bribery, is "contrary to the best interests of the company" because such a disclosure could interfere with the ongoing investigations.

Wal-Mart said that that type of disclosure could also "adversely affect the company's position in any current or future legal proceedings."

Allegations first surfaced two years ago that Wal-Mart failed to notify law enforcement that company officials authorized millions of dollars in bribes in Mexico to speed up building permits and gain other favors. Wal-Mart has been working with government officials in the U.S. and Mexico on that investigation.

With the shareholders meeting a week away, a union-backed group called OUR Wal-Mart, which started three years ago and includes former and current members of Wal-Mart, will stage protests at 20 cities around the country. The protesters will be Wal-Mart workers who are pushing for higher pay and protesting what it calls retaliation against employees who speak out against the company.

Follow Anne D'Innocenzio on Twitter @adinnocenzio

Ex-Microsoft CEO Ballmer to buy Clippers for $2B

Former Microsoft CEO Steve Ballmer agreed to pay $2 billion for the Los Angeles Clippers on Thursday, a person familiar with the situation told USA TODAY Sports on Thursday, which stands to be the most ever paid for an NBA franchise.

The person, who requested anonymity because he was not authorized to speak publicly, said Shelly Sterling had a signed contract with Ballmer that was sent to the NBA for approval. At least three-quarters of the league's owners must approve the sale.

The person said Donald Sterling does not have to sign off on the agreement because he has been determined to be mentally unfit to make decisions about the family trust, which owns the team with each spouse having a 50% share. The trust spells out provisions and procedures related to the trustees' mental capacity, and an expert determination was made about Donald Sterling that left Shelly Sterling in charge of the trust, the person said.

ARMOUR: $2 billion is much too much

MAGIC: Clippers fans will love Ballmer

Sterling's attorney has maintained that no sale can occur without his approval even though Sterling authorized his wife in writing last week to sell the team. The attorney did not return calls seeking comment late Thursday.

The sale price would shatter the previous record paid for an NBA team, $550 million for the Milwaukee Bucks earlier this month. It would be the second-highest price for a sports franchise in North America, trailing only the $2.1 billion paid for the Los Angeles Dodgers in 2012.

Shelly Sterling had pushed to find a buyer before Tuesday, when league owners are scheduled to vote on whether to terminate the Sterlings' ownership. The NBA declined to comment Thursday night.

Silver announced on April 29 that he would force a sale of the Clippers after Sterling was heard in an audio recording making racist remarks about African-Americans in a private conversation with his companion, V. Stiviano. The recording was leaked months later to the gossip site TMZ, promptin! g Silver to ban Sterling for life and fine him $2.5 million.

In a scathing 32-page response to the league, Sterling argued that his comments occurred in a private conversation that was illegally recorded under California law, and that he had not broken any NBA rules.

Ballmer, who was chief executive of Microsoft for 14 years, beat out other bidders that included Los Angeles-based investors Tony Ressler and Steve Karsh and a group that included David Geffen, Oprah Winfrey, Larry Ellison and executives from the Guggenheim Group, the Chicago-based owner of the Los Angeles Dodgers.

Ballmer was part of a group headed by hedge-fund manager Chris Hansen that bid last year to buy the Sacramento Kings and move them to Seattle. But Ballmer told The Wall Street Journal earlier this month that he would not want to move the Clippers, should he buy them, because that would hurt the team's value.

Brent Schrotenboer is an investigative and enterprise reporter for USA TODAY Sports. Contact him on Twitter or via e-mail.

GALLERY: Donald Sterling through the years

FacebookTwitterGoogle+LinkedInClippers owner Donald Sterling through the years FullscreenPost to FacebookPosted!

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Longtime Clippers owner Donald Sterling, shown in 2010, has been banned by the NBA. Flip through this gallery for more of Sterling.  Mark J. Terrill, APFullscreen Sterling and former Los Angeles mayor Tom Bradley pose for a photo in 1987.  Andrew D. Bernstein, NBAE/Getty ImagesFullscreen A portrait of Sterling, who also is a real estate entrepreneur, as he holds a mug and stands near a deck chair in Malibu, Calif., June 1989.  Rob Lewine, Time & Life Pictures/Getty ImageFullscreen Sterling sits courtside during a game in 2010.  Danny Moloshok, APFullscreen Sterling and LaLa Vazquez sit next to each other at a Clippers-Nuggets playoff game, where Vazquez's future husband, Carmelo Anthony, starred for Denver.  Garrett Ellwood, NBAE/Getty ImagesFullscreen Sterling and former GM Elgin Baylor pose after Baylor, who later sued the team for wrongful termination, won the 2005-06 NBA Executive of the Year Award.  Andrew D. Bernstein, NBAE/Getty ImagesFullscreen Sterling smiles during the first round of the 2012 playoffs, when the Clippers beat the Grizzlies.  Jayne Kamin-Oncea, USA TODAY SportsFullscreen Sterling and wife Shelly attend a game in November 2013.  Kirby Lee, USA TODAY SportsFullscreen Sterling sits courtside at a December 2012 game.  Jayne Kamin-Oncea, USA TODAY SportsFullscreen Sterling greets fans during December 2012.  Jayne Kamin-Oncea, USA TODAY SportsFullscreen Sterling takes in player introductions during the 1997 playoffs, when his team lost to the Jazz.  Robert Hanashiro, USA TODAY SportsFullscreen Sterling has a laugh with former Clippers star Elton Brand in 2001.  Catherine Steenkeste, NBAE/Getty ImagesFullscreen Sterling talks with former Clippers star Lamar Odom before a 2000 game.  Robert Hanashiro, USA TODAY SportsFullscreen Sterling and former NBA commissioner David Stern meet with officials before a Clippers 2012 second-round playoff game vs. the Spurs.  Jayne Kamin-Oncea, USA TODAY SportsFullscreen Sterling and wife Shelly pose for a photo before a 2012 playoff game.  Andrew D. Bernstein NBAE/Getty ImagesFullscreen Sterling during the 2012 NBA playoffs.  Jayne Kamin-Oncea, USA TODAY SportsFullscreen Sterling in Nov. 2012.  Mark J. Terrill, APFullscreenLike this topic? You may also like these photo galleries:ReplayA! utoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

Why Donald Sterling Might Win in the Sale of the Clippers

Source: Flickr / Noize Photography.

Think Donald Sterling is appropriately being punished by being forced to sell the L.A. Clippers? Troublingly, it turns out this may actually be a good thing for him.

The demand of the league
It isn't worth rehashing the awful remarks that brought Sterling into this mess. And it should come as no surprise ESPN reported he was going to fight the demands of the NBA "to the bloody end," and would do all he could to ensure his Clippers weren't sold.

What is regrettably lost in all of this is Sterling might be the big winner as a result of his disgusting remarks.

Staples Center. Source: Flickr / David Jones.

The troubling truth
Consider the reality that there is only one Clippers team.

When supply is fixed at one, the price is only determined by demand. It's a straight line, and it will only get sold for what people are willing to pay for it.

And in the case of Donald Sterling, that may be exactly what is happening. With the widespread media attention surrounding the controversy, it's not difficult to imagine some of the possible groups interested in buying the Clippers are those who would've never considered it otherwise. Perhaps their thought to buy the Clippers was driven solely by the fact it's such a well-known sale.

After all, it was just last month when the Milwaukee Bucks were sold for $550 million, and Sports Illustrated said, "The sale of the team concludes a quiet, extended process carried out with specific ends in mind." 

And while there would undoubtedly be more demand for the Clippers than the Bucks under normal circumstances, a "quiet" and "extended process" is the exact opposite of what the sale of the Clippers will ultimately be.

ESPN said today there are "at least six serious groups" who've approached Sterling's wife to buy the team already. And last week it also reported "the number of bidders for the Clippers is expected to stray well into double digits," provided the league is able to "force the sale of the team."

So does that mean demand will double? While we cannot say for certain, we do know the sale is expected to top $1 billion. But it was just this January when Forbes pegged the value of the Clippers at "just" $575 million. With the demand on the rise, and the supply fixed at one, the price is apparently only moving up. Meaning Sterling will only get more from the sale.

The surprising bright spot
To think a deplorable man like Sterling could actually benefit by getting a higher price than he would otherwise as a result of the attention devoted to him is somewhat defeating. Yet there is one lone bright spot.

Sterling's remarks note:

On top of that punishment, forcing a sale rather than allowing the team to pass by succession to the remaining spouse or heirs would trigger an avoidable capital gains tax estimated to be more than $300 million to $500 million.

If the price rises, it means Sterling will end up having to pay more in taxes. And while we may all think what we will about taxes, it turns out this may be one instance where the taxes appropriately make all Americans -- but one -- a little richer.

Your credit card may soon be completely worthless
The news about the possibility of Sterling coming out on top is troubling, but it turns out supply and demand can actually benefit us all. The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich as the demand for one company's product sky rockets. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Toll Brothers Posts Blowout Profits, But Don’t Sound an All-Clear for Housing

Popular Posts: 5 Midcap Stocks to Buy for Growth AND Stability5 Stocks to Sell in JuneThe Top 10 S&P 500 Dividend Stocks for March Recent Posts: 5 Stocks to Sell in June Toll Brothers Posts Blowout Profits, But Don’t Sound an All-Clear for Housing Bank of America Dividend Request Is Looking Good (BAC) View All Posts

Outside of a financial crisis of historical proportions, you can’t really go wrong selling stuff to rich people.

Just look at luxury homebuilder Toll Brothers (TOL), which reported soaring quarterly profits despite a slowdown in the housing market.

Rising mortgage rates and weaker housing data were pointing to housing market weakness ever before brutal winter weather gripped so much of the country earlier this year. That tampered the outlook for homebuilders, which have cooled off substantially after reaping the rewards of a big bounce back in 2011 and 2012.

But those fears appear to be unfounded — at least for high-end homebuilders — as Toll Brothers beat analysts’ fiscal second-quarter estimates for both earnings and revenue. It also should allay some anxiety felt by anyone holding TOL stock, which is on its way to breakeven for the year-to-date on the surprisingly strong earnings and outlook.

For the three months ended April 30, Toll Brothers said profit more than doubled by a wide margin, jumping 164% to $65.2 million, or 35 cents a share, from $24.7 million, or 14 cents a share, in the year-ago period. Analysts surveyed by Thomson Reuters projected earnings of just 26 cents a share.

In more good news for TOL stock, the top line rose sharply to likewise eclipse Street estimates by a wide margin. Revenue increased 67% to $860.4 million. Analysts were looking for revenue of $828 million.

Toll Brothers Not Necessarily a Bellwether

It’s unclear how much of the good fortune at Toll Brothers extends to the broader collection of homebuilders. After all, Toll Brothers sells homes with an average price of $706,000, up from $577,000 a year ago. Indeed, the strong quarter was driven by price and volume gains.

But most rival homebuilders’ customers aren’t looking to spend anywhere near that level.

Furthermore, Toll Brothers — and TOL stock — benefits from building in the wealthy corridor from Boston to Washington, D.C. Toll Brothers also is developing condos-for-sale projects in the affluent New York City/northern New Jersey area, as well as Philadelphia.

By catering to the wealthy, Toll Brothers is able to enjoy rapid price escalation even as national home prices rise much more slowly.

On the other hand, housing recoveries tend to ebb and flow, according to Toll Brothers CEO Douglas C. Yearley Jr., so the slowdown may just be a normal pause for the market and the homebuilders. As Yearley said in a media release:

“We note that last cycle’s recovery, in the early 1990s, began with a period of rapid acceleration, followed by leveling, before further upward momentum. We believe that we are in a similar leveling period in the early stages of the housing recovery with significant pent-up demand building.”

Even if that’s the case, and there’s more upside for the housing market and homebuilders ahead, that doesn’t make Toll Brothers’ shares a buy on the latest news. TOL stock was already trading at a 26% premium to its competitors on a forward earnings basis, according to data from Thomson Reuters Stock Reports, so today’s good news appears to have been more than reflected in the stock’s price.

Toll Brothers might be too pricey to add to any position here, but the future looks bright enough that you sure wouldn’t want to sell it, either.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.