Citizens' Issues
SC refuses to frame guidelines for reporting court proceedings

The apex court said temporary ban on publication of court proceedings is necessary to...

Premium Content
Monthly Digital Access


Already A Subscriber?
Yearly Digital+Print Access


Moneylife Magazine Subscriber or MSSN member?

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Infosys’ acquisition of Lodestone is expensive and would be neutral to the stock, says Nomura

The acquisition will lead to an increase of 1.3%/2.7% to the FY13/FY14 revenue numbers for Infosys at disclosed revenue run rates while EPS impact is likely to be marginal, says Nomura

Infosys has agreed to acquire Lodestone—a management consultancy firm based in Zurich—for an aggregate enterprise value of CHF330 million ($345 million) in cash. Lodestone will operate as a subsidiary of Infosys named ‘Infosys Lodestone’ in Europe, according to an Infosys’ press release. BG Srinivas, head of Europe and global head of financial services and insurance, will be the chairman and Ronald Hafner (present CEO of Lodestone) will continue as CEO of the subsidiary, according to Infosys. The transaction will be effective October-end, post anti-trust clearance. Infosys will pay two-thirds of the consideration upfront, with the balance one-third to be paid after three years subject to certain conditions (undisclosed by company).


The positives for Infosys from the acquisition of Lodestone include: (a) It will strengthen Infosys’ consulting presence in Europe. Lodestone generates 83% revenue from Europe. Infosys on the other hand has only 10% revenue from continental Europe. (b) It will increase life-sciences contribution. Infosys has only a small presence in life-sciences vertical (3.7% of revenue or $260 million annualized run-rate). Lodestone generates 28% of revenue from life sciences ($60 million). (c) It will increase Infosys’ presence in CSI. The Lodestone acquisition will lead to Infosys having over $1 billion revenues annually from SAP-led offerings. Infosys currently has 31,000 people in consulting and systems integration (CSI) which includes 10,000 SAP consultants.


Lodestone advises clients on strategy and process optimization and provides business transformation solutions enabled by SAP. It has more than 200 clients across industries with a vertical mix of 28% revenues from life sciences, 17% from industrial manufacturing, 16% from auto and14% from consumer goods. It had FY11 revenues of CHF207 million ($220 million). It has over 850 employees including 750 consultants. It has had 18% revenue growth from FY09-11. It has 83% revenue from Europe (50% of total revenue from Switzerland, 23% of total revenue from Germany); 12% from APAC.


Nomura Equity Research views the acquisition to be expensive and largely neutral to the stock. The acquisition will lead to an increase of 1.3%/2.7% to the FY13/FY14 revenue numbers for Infosys at disclosed revenue run rates. On margins, however, the acquisition is likely to be dilutive to the extent of 30-50 basis points (bps) over the next two years. EPS impact is likely to be marginal, added Nomura.


While this acquisition does indicate increase in aggression at Infosys in terms of inorganic growth, Nomura expects the stock impact to be largely neutral as: (a) consulting continues to be soft in terms of demand, and (b) benefits are likely to be long-winded as results from cross-selling play out.


The concerns identified by Nomura include: (a) Infosys is losing market share in cost efficiency business, and (b) Infosys will have continued drag from higher discretionary exposure.


Your iPhone could be disabled during the next protest you attend

According to a report by, the iPhone maker has received a patent that would allow Apple to turn off its mobile devices in areas that are deemed inappropriate for recording or taking pictures

The next time you’re at a concert and you whip out your iPhone to record the excitement, you may notice it doesn’t work. During the show you keep trying to turn it on but for some reason it just won't light-up.

But miraculously when you go outside when the concert is over, your phone all of a sudden works again. This can happen to you at the next concert you attend or maybe inside the next movie theater you go to.

Apple has received a patent that would allow the company to turn off its mobile devices in areas that are deemed inappropriate for recording or taking pictures. The new technology would also have the ability to shut down communication functions in devices, so people couldn’t text or make phone calls if they’re in areas that are considered sensitive.

Here’s what's written on the patent:

“This policy enforcement capability is useful for a variety of reasons, including for example to disable noise and/or light emanating from wireless devices (such as at a movie theater), for preventing devices from communicating with other wireless devices (such as in academic settings), and for forcing certain electronic devices to enter ‘sleep mode’ when entering a sensitive area.”

Many believe this new patent could be a good thing, as it can remove the power from movie bootleggers or cut off communication from a group of up-to-no-gooders in an airport let’s say, but it could also harm the public’s ability to document wrongdoing.

Citizen journalists

Remember the kids who were pepper-sprayed at the University of California Davis during the Occupy Wall Street rallies? The students were sitting peacefully but were sprayed at close range, while hundreds of smartphones filmed the incident, which was eventually broadcast around the world.

Well, this type of amateur-video journalism could be halted, as certain entities could have the power to abruptly shut off your phone during protest marches, rallies or political gatherings. Those same entities could also just block off satellite signals so you couldn’t get smartphone access in certain places.

The federal government along with Apple could arbitrarily decide what areas or public functions would be considered sensitive or restricted. Some believe the amount of subjectivity that goes into making such a decision is as big as the sea, which is the reason they're concerned about this new technology.

Although the patent was granted, Apple would still need the okay from the government to implement the technology, but the company is well on its way to using it in the near future.

Some have already expressed concern over not being able to monitor police action, especially during public protests.

Blackout conditions


"Covert police government operations may require complete ‘blackout’ conditions," said the patent. "The wireless transmission of sensitive information to a remote source is one of the examples of a threat to security. This sensitive information could be anything from classified government information to questions or answers to an examination administered in an academic setting.”

Apple also noted having the ability to shut off smartphones is ideal for professional and some social settings, where devices could easily bother many people at once.

“As wireless devices such as cellular telephones, pagers, personal media devices and smartphones become ubiquitous, more and more people are carrying these devices in various social and professional settings,” it says in the patent. “The result is that these wireless devices can often annoy, frustrate, and even threaten people in sensitive venues.”

Apple also says smartphones should be disabled within photography darkrooms and biological labs, where light can destroy what’s being worked on.

Apple also says the new technology can help drivers as they attempt to use their devices on the road. The company says the smartphone’s communication function could be temporarily deactivated when entering your car or when you're driving in certain areas. Devices would be manipulated by GPS signals and satellites.

Now just which entities will have the authority to deem areas sensitive remains to be seen. Whether it’s only Apple, areas of the U.S. government, or local police departments, setting up the technology nationwide is challenging, but extremely doable.

The fact that Apple has already been granted a patent by the government shows that having your smartphone manipulated by someone other than yourself could be happening sooner than you think.


To read the original article click here


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)