Friday, November 19, 2010

iPod nano review -- as a watch

iPod nano watchbands -- they're everywhere! Seriously, ever since Steve Jobs said that an unnamed Apple board member jokingly planned to wear the new nano as a watch, we've seen all shapes and sizes of wristbands designed to put the diminutive media player on your wrist, ranging from the super-basic to the super-silly to the super-amazing. But hold up -- yes, we thought the new nano was a great little media player when we first reviewed it, but why hasn't anyone talked about what it's like to wear one as your watch? Is replacing your current timepiece with the nano's 1.5-inch 240 x 240 multitouch displayactually a good idea? We took the nerd-bullet for you and wore one for a week to find out -- read on!

First things first: you've got to get the nano on a band. That's actually pretty easy -- not only are there a million accessory manufacturers out there willing to sell you a nano-specific band, you can also clip it onto pretty much any bigger watchband you can find. Just make sure you can tighten things down so the nano doesn't slide around -- the white band we used didn't have any adjustments so the nano felt a bit precarious. We didn't have any problems, though -- the nano's clip is definitely strong enough to survive normal use. Of course, it's a bit huge -- we tend to favor large watches, so we didn't think it was a problem, but if you have dainty wrists it might look a little silly.

Next, head into Settings / Date & Time and turn on "Time On Wake," which pops open the clockface when you hit the wake button instead of dropping you right into the homescreen. Without this setting flipped on, you're just a dork with an iPod on your wrist. You also get a choice between white and black clock face backgrounds, and... that's about it. Turns out you're going to be a dork with an iPod on your wrist no matter what, because displaying the time when the wake switch is pressed is pretty much the only watch-type function you're going to find here beyond the stopwatch and timer. And here's the biggest problem: you can't just glance at your wrist and check the time! The screen is completely dark when it's asleep, so you have to reach over and hit the wake button with your other hand to see the time, and worst of all, hitting the wake button doesn't light the screen up instantly -- there's a significant and noticeable delay of over half a second before the clock is displayed. We'd love to see something like theNokia N8's AMOLED screen tech that dimly self-illuminates with zero power draw to display a clock while asleep used here -- it feels like a perfect solution.

Of course, you can always plug in headphones and listen to music, but it turns out having a wire connecting your head to your wrist isn't as ideal as you might imagine. Not only do you have to make sure your headphone cord is long enough for your height to avoid yanking the buds right out of your ears, but you also have to be ever-vigilant that you're not tangling things with every move of your hands. Besides, if you're the type of person who's wearing an iPod nano as a watch, well, we're going to go out on a limb and say you have a smartphone, and that's almost certainly a better music playback experience than the nano.

Registry hack allows for direct loading of media on Windows Phone 7 devices

Prefer to load media onto your Windows Phone 7 device the old fashioned way? Then it looks like your solution is just a simple Windows registry hack away. Coming shortly after the USB tethering hack, the folks at Windows Phone Central have now discovered that you can effectively turn your Windows Phone into a USB drive by modifying just three entries in the registry of your Windows desktop PC. Once done, you'll be able to drag and drop files to your heart's content -- albeit only on a computer that's had the registry hack done, of course. Hit up the source link below for the complete details

Acer, Ferrari unveil joint smartphone model

Ferrari and Acer unveiled on Friday a joint new smartphone model using Google's Android software, hoping to boost its so far limited role in the increasingly crowded smartphone market.
The version of Acer's Liquid model -- with production limited to 200,000 -- will be Ferrari branded and sold with pre-loaded content from the company and its racing team.
"The Ferrari branded device will help lift Acer's latest phone above the ever-crowded Android devices market where it is hard to tell many of the lower cost products apart," said Ben Wood, head of research at British consultancy CCS Insight.
The world's second largest PC vendor Acer entered the smartphone industry last year, aiming to reach 6 to 7 percent of the market in three to five years.
Its success has so far been very limited, but handset vendors are closely watching the PC vendors move into their marketplace.
"Acer had a devastating effect on the notebook market and has been the thorn in Dell and HP's side. Its low cost, low margin approach accelerated commoditisation in the notebook market and mobile phone makers are watching its entry into the segment closely," said Wood.

Friday, November 12, 2010

How to Evaluate Banking Stocks

It is said that the banking sector reflects the economy's health. The sector acts as a funnel providing the funds that corporates need to expand their business. When the economy is expanding, as is happening in India currently, banks lend more and hence profit more. Since a bank's business model is different from that of a manufacturing company, the way you go about analysing banking stocks is also different.

A bank's basic business is to accept deposits and give out loans. It makes money by charging a higher rate of interest on its loans than the rate it pays its depositors. This difference in interest rates is called 'spread'. The money that a bank earns from its deposit-taking and lending activities is referred to as 'net interest income'.
In addition, banks also earn money by offering a variety of services (say, distributing mutual fund and insurance products, offering wealth management services, and many more) for which they charge a fee. They also make money by buying and selling debt securities (referred to as their treasury operations). The money they earn by these means is reflected in their profit and loss statement under 'other income'.

The Reserve Bank of India (RBI), the regulator for the banking sector, imposes certain prudential norms on banks. For instance, it requires banks to maintain a certain percentage of their deposits with RBI as cash reserve ratio (CRR). Whenever there is too much liquidity within the system and inflation threatens to go out of control, the central bank announces a CRR hike. This reduces the amount of funds available with banks for lending. This is referred to as sucking liquidity out of the system. But since banks earn no interest on their CRR deposits, a hike in the CRR rate affects their profitability adversely.
RBI's prudential norms also require Indian banks to invest a part of their funds in government securities (G-Secs). These holdings are referred to as statutory liquidity ratio or SLR holdings.
And finally, given their importance to the system, banks can not be allowed to run short of liquidity. So the central bank runs an overnight liquidity window for them. Whenever banks need money for the short term, they borrow from the central bank at what is known as the repo rate. And when they have excess money, they deposit it with the central bank at a rate known as the reverse repo rate. These act as benchmark rates for short-term interest rates in the system.

Managing risk

Banks manage three types of risk: credit risk, liquidity risk, and interest-rate risk.

Credit risk. This is the core risk that banks run. To get an idea of how a bank is faring on this count, look at the trend of gross and net non-performing assets (NPAs) over a long period of time. Also keep track of a bank's capital adequacy ratio (CAR, which is capital that banks maintain to be able to absorb losses on their activities). When a bank's NPAs increase and its CAR falls below the stipulated level, it signifies a looming crisis.
To mitigate credit risk, banks try to diversify their loan portfolios. They do so either by making varied types of loans (so that a high proportion of their loans don't go bad at the same time) or by buying and selling loan portfolios from other players.

Another method by which banks safeguard themselves against credit risk is by employing sophisticated credit approval systems and processes to reduce default. A conservative approach to lending may lower earnings but usually works in a bank's favour over the long haul.
Liquidity. Banks are also expected to provide liquidity management services. For instance, there could be a company that is due to receive a large payment from a client in a few days but is in urgent need of money now. It can go to a bank, sell its receivables to it at a discount, and get immediate cash in return.
Many businesses also pay a regular fee to a bank to avail of overdraft facility.
All this makes it necessary for banks to have sufficient liquidity to be able to meet the demands made on them. Hence the prudential norms (such as CAR) that are imposed on them and the overnight lending window provided by RBI.

Interest-rate risk. The third major risk that banks face is interest-rate risk. Most people think that higher rates are good for banks and lower rates are bad. This is an oversimplification. The effect of interest-rate movements depends on whether at a given point of time a bank is asset sensitive or liability sensitive. Asset sensitivity means that the bank can change the interest rate on assets like loans more quickly than the interest rate on liabilities. In such a case, rising interest rates translate into greater profitability for the bank.
When a bank can change its deposit rates more quickly than its loan rates, it is said to be liability sensitive. In such a scenario, rising interest rates will hurt its margins. Interest-rate swaps are used nowadays by banks to mitigate the impact of interest-rate fluctuation.

In a rising rate scenario, as interest rates reach high levels, it becomes difficult for banks to raise their loan rates further and hence their net interest margin (NIM) begins to get compressed. In such a scenario, banks with a high CASA ratio (proportion of total deposits accounted for by low-cost current and savings accounts) tend to do well because of their access to low-cost deposits. When analysing a banking stock, pay heed to its CASA ratio. Banks with a large branch network have a higher CASA ratio.
Economic moats in banking

One of the biggest deterrents that prevent more players from entering the banking industry is the tough regulatory requirements that all banks are supposed to comply with. In India, in any case, bank licenses are given out by RBI only from time to time and after much due diligence.
Banking is also a capital-intensive business; hence not too many players can enter it.
Economies of scale also give greater muscle to a bank. A State Bank of India (SBI) or a Citibank (internationally) enjoys scale-based advantages that are difficult for smaller players to match.
A large branch network, as mentioned earlier, is another key advantage. Punjab National Bank's (PNB) large branch network in north and central India gives it access to low-cost deposits that is hard for smaller players to match.

Going by the numbers

Capital base. In case of Indian banks, check their credit to deposit ratio (CDR). This ratio indicates the funds lent out of the total amount raised through deposits. A higher ratio indicates more optimal utilisation of funds. Check the bank's CDR vis-à-vis the industry range.
Next, look at a bank's capital adequacy ratio (CAR). The RBI has stipulated that the minimum capital adequacy ratio should be 10. This ratio ensures that banks do not expand their business without having an adequate buffer of capital.

             Tier I capital + Tier II capital

CAR = ---------------------------------

             Risk-weighted assets

Keep an eye on the reserve provisions made for bad loans relative to non-performing assets (NPAs). Net NPA ratio is a measure of the overall quality of the bank's loan book. A higher ratio reflects rising incidence of bad loans.
                           Net non-performing assets

Net NPA ratio = ---------------------------------

                           Loans given

Profitability. Return on equity (RoE) and Return on Assets (RoA) are the standard metrics for checking a bank's profitability.
A red flag should go up in your mind if a bank's RoE or RoA shows excessive deviation from that of its peer set. It is easy for a bank to boost its earnings in the short term by under provisioning for bad loans or by leveraging the balance sheet. This increases the risk over the long term. The recent financial crisis in the US is an example of all that can go wrong when excess leverage is employed by financial institutions.

              Net profits

ROA = ---------------

             Avg. total assets

Efficiency ratio. Check the operating profit margin of the bank you are evaluating. If a bank is able to keep its expenses under check, that is a positive sign.
Operating profit for banks is calculated after deducting administrative expenses (which include salary cost and network expansion cost) from its net interest income.

                Net interest income (NII) - operating expenses

OPM = ---------------------------------------------

                Total interest income

Controlling overheads is critical. This can be done through branch rationalisation and technology upgradation. The cost to income ratio indicates how good a job a bank is doing at controlling costs:
                                    Operating expenses

Cost to income ratio = ---------------------------

                                    NII + non interest income

Net interest margin. Net interest margin (NIM) is the net interest income as a percentage of average earning assets. It shows how profitable a bank's lending and deposit-taking activities are. Keep a tab on the long-term trend in a bank's NIM.
              Interest income - Interest expenses

NIM = ------------------------

             Average earning assets

Price-to-book. This is the key measure of valuation for banking stocks. Compare the bank's current P/B with its historical P/B levels (say median for past three years). Also compare it with that of its peers. This will tell you how expensive its valuation is.

Corruption robs from even the poor

India is being hailed as a rising global economic power. However, given its poor record in poverty eradication, human development indicators and inclusive growth, it has yet to go a long way to achieve this reputation.
The biggest impediment is the cancer of corruption, which has now spread to every wing of the government and every section of society, including the noble professions of education, medicine, judiciary, armed forces and journalism.
The several shameful episodes that have come to light in recent times include reports of illegal mining in several States, the 2G spectrum licences scandal linked to Telecom Minister Mr D. Raja, and the Sukhna land scandal involving four Lieutenant Generals of the Indian army.
The scams relating to the recently held Commonwealth Games and the Adarsh Co-operative Housing Society in South Mumbai have resulted in the sacking of Mr Suresh Kalmadi from his party position and Maharashtra Chief Minister Mr Ashokrao Chavan respectively.
The just released final report of the CAG has revealed that the 2G spectrum scandal cost the nation a mind-boggling Rs 1.7 lakh crore. However, the minister concerned clings to his job with the blessings of his party boss, Mr M. Karunanidhi. The Government should ensure his early exit to save face.
Corruption has become a way of life today, and everyone takes it for granted. Politicians and government officials shamelessly appropriate even the welfare funds meant for the poor.
Large-scale corruption and leakages in the plethora of anti-poverty schemes launched over the past several decades have defeated the very purpose of those schemes.
The public distribution system (PDS) intended to supply food grains and other essential items to the poor and weaker sections is in a shambles owing to large-scale diversion to the open markets and even to neighbouring countries like Nepal.
Similar is the case with the National Rural Employment Guarantee Scheme (NREGS), the UPA Government's flagship anti-poverty scheme. A Government investigation in 2009 revealed that a whopping 40 per cent of the allocation from the budgeted Rs 40,000 crore had been siphoned off.
The office of the Comptroller and Auditor General (CAG) routinely exposes serious cases of corruption in many Government schemes and programmes. However, corrective action from the Government is rare.
With rising population pressures, particularly in the bigger cities, there is widespread corruption in the real estate business with a thriving land mafia-politician nexus involved in illegally grabbing government land and land reserved for recreation parks, playgrounds and so on. As the eminent economist Raghuram Rajan aptly put it: Yesterday's licence-permit raj has morphed into a land mafia raj with huge socioeconomic costs for the country.
Unfortunately, the discretionary allotment of land for housing to certain powerful groups has almost become institutionalised owing to the criminalisation of politics.
Land scarcity for affordable housing in major cities has been accentuated by the fact that the armed forces, railways and the PSUs hold land far in excess of their operational needs and reasonable reserves. For instance, it has now come to light that the Ministry of Defence holds about 17 lakh hectares of prime land across the country worth more than Rs 20 lakh crore. Of this, only about two lakh acres are reportedly in use.
Clearly, there is need for a detailed and competent audit of the land banks held by the country's defence forces, port trusts, railways, the PSUs and other public utilities. The excess land held by them should be released for public housing, educational institutions and so on.
Fighting corruption and cleaning the prevailing mess should receive top priority if the Government is to realise its goal of inclusive growth and poverty eradication to create a new 21 st century India over the next decade or two.
The cleaning process should begin at the top by drastically reforming the electoral process. Excessive, illegal and illegitimate expenditure in elections is the root cause of corruption. Often, the poll expenditure of candidates is 10 to 15 times the legal ceiling prescribed, eventually leading to criminalisation of politics that threatens the very roots of democracy.

In July 2008, The Washington Post had reported that nearly a fourth of 540 Indian Parliament members faced criminal charges, including human trafficking, immigration rackets, embezzlement, rape and even murder. At the State level, things are worse.
According to the Swiss Banking Association Report 2006, Indians had stashed away $1,456 billion of black money in that country. The corrupt entities include politicians, industrialists, officials, cricketers, film stars, and protected wildlife operators, to name just a few.
Although the Right to Information (RTI) legislation has empowered citizens to demand transparency from public officials, there have been instances of RTI activists being threatened, attacked and even killed by vested interests.
Hence, there is a need to drastically change our legal system to guarantee stringent punishment for corrupt politicians and government officials.
Asking a corrupt politician to resign from the job is not enough; criminal proceedings should follow to deliver suitable punishment, including a jail term.

Sunday, November 7, 2010

Google's Android platform turns 3, Gingerbread due on 11 November

The Android platform was born on this day three years ago, on 5 November 2007, and the first device based on the platform was introduced nearly one year later, on 22 October when the T-Mobile G1 saw daylight for the first time.

However, the story began back in 2005 when Google acquired the Android Inc. Then, it was only a matter of time for the Android platform to show up. Now, a few years later, this is one of the fastest developing operating systems.

The Android OS hasn't stop improving since Day One. Cupcake, Donut, Eclair, Froyo… Those are all sweets but at the same time these are the names of the numerous Android updates released over the years. And rumor is the next one, Android 2.3 a.k.a. Gingerbread, is about to be launched in a week, on 11 November.

As for the applications compatible with the Android platform, currently, there are more than 100 000 apps over at the Android Market and their number is continuing growing and growing.

Currently, we have 141 Android handset in our database and those are not all phones available worldwide as as we don't list all CDMA handsets.

Saturday, November 6, 2010

Google and other companies to unveil first Chrome OS powered notebooks and smartbooks later this month?

Leading companies are said to announce their first Chrome-powered smartbooks later in November 2010. But what is even more exciting, word is Google is about to present its own notebook based on the Chrome operating system as well.

The first Google-branded Chrome-running notebook is said to be manufactured by a company called Inventec. Rumor is initial shipments will reach 60 000-70 000 units.
The smartbook will be build around an ARM-based platform and won’t be available through retail channels (only online, directly from Google).

A little while after we see Google’s Chrome-based firstborn, we’ll get to meet some smartbooks made by Wuanta Computer but wearing the Acer and the HP logos. Those should be launched some time in December. Asustek will probably join the party a tad later.