Lenovo’s downward spiral might not be over

In four years, Lenovo Group went from would-be Apple Inc. challenger to an also-ran in smartphones and data-centre servers. Now it’s got a comeback plan, but some investors don’t buy it.

China’s erstwhile tech darling, which lost its perch atop the PC market to HP Inc. in 2017, has shed two-thirds of its value since hitting a 15-year high in 2015. At a two-year earnings multiple of about 10 times, its stock is cheapest among the world’s largest computer makers. Yet all seven analysts ranked best by Bloomberg based on one-year returns urge investors to sell. Their average target puts Lenovo 13 percent below Tuesday’s close.

From money-hemorrhaging businesses to resurgent competition for its cash-cow PC division and a revolving-door executive team, the company that once aspired to Apple and Samsung’s heights seems to have lost its way. Chief Executive Officer Yang Yuanqing’s failed repeatedly to deliver on turnaround deadlines and hasn’t fully articulated a strategy to revive ailing mobile and datacenter arms — even as local rivals gun for its bread-and-butter Chinese customer base. The company’s even resorted to selling office buildings to prop up the bottom line.

“I just don’t see signs of change,” said Qian Kai, an analyst with CICC who’s covered Lenovo for five years and the third-ranked analyst of 30 in Bloomberg’s Absolute Return Rankings. He lowered his target price to HK$2.60 in February. “Lenovo’s been caught in the middle of a very awkward situation where it can neither turn the tables on its home turf nor expand quickly enough in overseas markets.”

It’s a far cry from the days when Lenovo was at the top of its game. Yang took the stage at an 18,000-seat Beijing arena one frigid winter’s evening in 2014 to surprise euphoric employees with news Lenovo had agreed to take over International Business Machine Corp.’s commodity server business for more than $2 billion. That same year, it sealed a deal to buy Motorola Mobility from Google, becoming the world’s No. 3 smartphone label.

That was then. The Moto line has tumbled out of the top ranks, unable to expand its footprint in the U.S. and pummeled by fast-moving rivals in Asia from Oppo to Xiaomi Corp. Liu Chuanzhi, an industry trailblazer who transformed Lenovo into one of China’s most recognizable brands, fell on his sword during this year’s address.

“How many mistakes have we made? How many mistakes have I myself made?” Liu said in February. “Without question, today’s Lenovo Group faces severe and acute challenges. The challenge is multi-dimensional and uncertain. It’s an age when innovations in technology and business model are powerful enough to overturn an industry and even social customs.”

Lenovo’s now overhauling its sales channel. It’s re-enlisted Liu Jun — the architect of the Motorola deal — to reinvigorate China via new avenues such as e-commerce.

“Turning around the business is still our goal, but we probably need more quarters to deliver that result,” Yang said in an interview in February. “We are transitioning in emerging markets from Lenovo brand to Motorola brand, it hasn’t gone very well. We need to clear inventory and rebuild the brand.”

It also missed out on “its best shot” to grow its server business, Qian said. At the time the IBM deal was unveiled, Chinese customers were starting to eschew IBM, Oracle and EMC in favor of local names. Many ended up with Huawei or Inspur because Lenovo took eight months to close its acquisition.

Lately, the company’s shown signs of life. It’s expected to return to (meagre) revenue growth this fiscal year after two successive annual declines. But at least one fund manager warns against getting into a PC sector that remains sluggish at best.

“The industry is unlikely to see hyper-growth in the short run,” said Zhang Haidong, a fund manager with Jinkuang Investment Management who doesn’t own stock in Lenovo. Even “the smartphone business may not see its next inflection point until 2019.”

Alexander Medd, an analyst with Bucephalus Research who’s been one of Lenovo’s harshest critics, argues the company needs cool products. But it may be too late.

“Tech brands do not come back,” he said.

Source: Bloomberg / MyBroadband 

2018 budget speech in a nutshell

Finance Minister Malusi Gigaba’s Budget Speech has seen him make “difficult decisions” to address a revenue shortfall and to fund free higher education.

An increase in value-added tax (VAT), fuel levy and a higher estate duty tax are just some of the things South Africans will be faced with this year.

On the other hand, Minister Gigaba announced some relief for the poor and the working class in the form of below inflation increase in personal income tax, while ensuring an above average increase in social grants.

As part of wide-ranging tax proposals, the Minister said the measures were being introduced, in the main, to generate an additional R36 billion in tax revenue for 2018/19.

The main tax proposals for the 2018 Budget are:

  • An increase in the value-added tax (VAT) rate from 14% to 15%, effective 1 April 2018;
  • A below inflation increase in the personal income tax rebates and brackets, with greater relief for those in the lower income tax brackets;
  • An increase in the ad-valorem excise duty rate on luxury goods from 7% to 9%;
  • A higher estate duty tax rate of 25% for estates greater than R30 million in value;
  • A 52 cents per litre increase in the levies on fuel, made up of a 22 cents per litre for the general fuel levy and a 30 cents per litre increase in the Road Accident Fund Levy, and
  • Increases in the alcohol and tobacco excise duties of between 6 and 10%.

Tabling the 2018 Budget Speech in the National Assembly on Wednesday, the Minister said increasing VAT was unavoidable, as there was a need to maintain the integrity of public finances.

“In developing these tax proposals, government reviewed the potential contributions from the three major tax instruments, which raise over 80% of our revenue – personal and corporate income tax and VAT.

“We have increased personal income tax significantly in recent years, particularly at the higher income bands, and our corporate tax is high by international standards.

“We have not adjusted VAT since 1993, and it is low compared to some of our peers. We therefore decided that increasing VAT was unavoidable if we are to maintain the integrity of our public finances,” he said.

What the tax proposals mean for 2018/ 19 financial year

In December, former President Jacob Zuma announced that from this year, government would implement fee-free higher education in a phased approach.

In its budget review document, National Treasury said the central adjustments to the fiscal framework in 2018/19 are meant to:

• Raise an additional R36 billion in tax revenue through an increase in the VAT rate, limited personal income tax bracket adjustments and other measures;

• Reduce the Medium Term Budget Policy Statement baseline expenditure by R26 billion;

• Allocate R12.4 billion for fee-free higher education and training;

• Set aside an additional R5 billion for the contingency reserve;

• Provisionally allocate R6 billion for drought management and public infrastructure.

“The baseline spending reductions and tax measures feed through to the outer years of the framework, while allocations to higher education increase sharply,” National Treasury said.

Vulnerable households shielded from VAT increase

The Minister said, meanwhile, that vulnerable households were protected from an increase in VAT.

“Vulnerable households will also be compensated through an above average increase in social grants.

“Some relief will be provided for lower income individuals through an increase in the bottom three personal income tax brackets and the rebates,” Minister Gigaba said.

The Minister said in addition to VAT, National Treasury would increase excise duties on luxury goods and estate duty on wealthy individuals.

He said taken together, National Treasury believed that the proposals best protect the progressive nature of the country’s tax regime to minimise the impact on lower-income households.

Taxes in more detail

Individuals

The maximum marginal rate for natural persons remains at 45% and is reached when taxable income exceeds R1 500 000.

The minimum rate of tax remains at 18% on taxable income not exceeding R195 850.

The primary rebate for all natural persons has been increased to R14 067 (previously R13 635). The additional rebate for persons aged 65 years and older is increased to R7 713 (previously R7 479). Persons aged 75 and older are granted a further R2 574 (previously R2 493).

The tax free portion of interest income remains at R23 800 for taxpayers under 65 years, and R34 500 for persons aged 65 years and older. In addition the tax-free savings dispensation for other investments, including collective investment schemes, became operative 1 March 2015 and remains at R33 000 per tax year.

Local dividends tax remains at a flat 20% rate which was effective 22 February 2017.

Foreign dividends also remain taxed at a flat rate of 20%, but this may be reduced in terms of Double Tax Treaties.

An individual is exempt from the payment of provisional tax if the individual does not carry on any business and the individual’s taxable income:
• Will not exceed the tax threshold (see 4 below) for the tax year, or
• From interest, foreign dividends and rental will be R30 000 or less for the tax year.

Companies and close corporations

The rate of normal tax remains at 28%.
The final withholding dividend tax remains at a flat rate of 20%.

Tax Exempt bodies (e.g. Retirement Funds) will suffer no withholding tax upon production of a tax exemption certificate.

Trusts

The flat rate remains at 45%, although distributions in the same tax year are taxed instead in the beneficiaries hands.

Individual tax thresholds

Liability for tax is as follows:

Under 65 years: R 78 150 (previously R 75 750)
65 to 74 years : R121 000 (previously R117 300)
75 years and older: R135 300 (previously R131 150)

Income tax: individuals and special trusts 

Taxable income (R) Rates of tax

0 – 195 850 18% of taxable income
195 851 – 305 850 R 35 253 + 26% of taxable income above R 195 850
305 851 – 423 300 R 63 853 + 31% of taxable income above R 305 850
423 301 – 555 600 R100 263 + 36% of taxable income above R 423 300
555 601 – 708 310 R147 891 + 39% of taxable income above R 555 600
708 311 – 1 500 000 R207 448 + 41% of taxable income above R 708 310
1 500 001 and above R532 041 + 45% of taxable income above R1 500 000

Trusts other than special trusts have a 45% rate of tax.

Tax rebates

Primary – R14 067
Secondary (age 65 and over) – R7 713
Plus (age 75 and over) – R2 574

Estate duty and donations tax

The rate of estate duty and donations tax remains at 20% for dutiable estate amounts of R30-million or less and increases to 25% for dutiable estate amounts over R30-million.

The estate duty abatement (exempt threshold) remains at R3,5-million per person and a surviving spouse may also benefit automatically from any unused deduction in the first dying spouse’s estate. i.e. the abatement remains a combined maximum R7-million for the second dying spouse.

There is a similar treatment of Donations Tax namely 20% for donations of R30-million or less, and increases to 25% for donations over R30-million.

The first R100 000 of amounts donated in each tax year by a natural person remains exempt from donations tax. Donations between spouses are fully exempt.

Capital gains tax (CGT)

• The annual capital gain exclusion for individuals remains at R40 000.
• The primary residence exclusion from capital gains tax remains at R2 million.
• The capital gain exclusion at death remains at R300 000.
The effective rate of CGT is the range of 7.2% to 18% for individuals, 22,4% for companies and 36% for Trusts, although correctly structured Trusts can result in the individual rate being applicable.

Transfer duty

The rates remain, i.e. property costing less than R900 000 will attract no duty. A 3 percent rate applies between R900 000 and R1,25 million, 6 per cent between R1,25 million and R1,75 million, 8 percent between R1,75 million and R2,25 million, 11 percent between R2,25 million and R10 million and 13 percent thereafter.

Retirement funds

Retirement Fund Lump Sum Withdrawal Benefits:

Taxable Income Rates of Tax
0 – 25 000 0% of taxable income
25 001 – 660 000 18% of taxable income above 25 000
660 001 – 990 000 114 300 + 27% of taxable income above 660 000
990 001 and above 203 400 + 36% of taxable income above 990 000

Retirement Fund Lump Sum Retirement Benefits or Severance benefits:

Taxable Income Rates of Tax
0 – 500 000 0% of taxable income
500 001 – 700 000 18% of taxable income above 500 000
700 001 – 1 050 000 36 000 + 27% of taxable income above 700 000
1 050 001 and above 130 500 + 36% of taxable income above 1 050 000

Tax Harmonisation of Retirement Fund Contributions
As from 1 March 2016 all retirement funds (pension, provident and retirement annuity funds) are treated similarly for tax contribution purposes.
The tax deduction formula of 27,5% per annum (with a cap of R350 000) of the greater of taxable income and remuneration applies to members of all retirement funds, including provident funds.

Medical expenses

Taxpayers may in determining tax payable deduct monthly contributions to medical schemes (a tax rebate to be known as a medical scheme fees tax credit) up to R310 for each of the taxpayer and the first dependent on the medical scheme and R209 for each additional dependent.

An individual who is 65 and older, or if that person, his or her spouse or child is a person with a disability, 33.3% of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 3 times the medical scheme fees tax credits for the tax year.
Any other individual, 25% of an amount equal to qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 4 times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7.5% of taxable income (excluding retirement fund lump sums and severance benefits).

VAT

The rate increases one percentage point to 15% (previously 14%), effective 1 April 2018. The compulsory VAT registration threshold remains at R1-million turnover per twelve month period.

Foreign exchange

The offshore investment allowance remains at R10 million per adult person per calendar year. In addition the R1 million individual single discretionary allowance remains.

Voluntary disclosure program

A new OECD global standard for the automatic exchange of financial information between tax authorities came into effect from end of 2017. SARS and the Reserve Bank thus offered the Special Voluntary Disclosure Program (SVDP) to parties with unauthorized foreign assets or income who wished to regularize their affairs, until 31 August 2017. This SVDP has expired but taxpayers who have foreign undisclosed assets and/or income may still avail themselves of the normal Voluntary Disclosure Program (VDP) contained in the Tax Administration Act.

Source: BusinessTech, Sterling Wealth

The technology industry is the crowning glory of America’s economy. It supports 7-million well-paid jobs at home, and allows America to set standards globally.

Silicon Valley generates almost $200-billion of profits from abroad each year, several times the benefit that America gets from having the world’s reserve currency. But after losing its lead in exports and manufacturing, is America’s tech supremacy now under threat from China?

For years Silicon Valley dismissed Chinese tech firms—first as an irrelevance, then as industrial spies and copycats. Most recently China has been seen as a tech Galapagos, where unique species thrive than would never spread abroad. But as our Schumpeter column explains this week, China’s technology industry has been catching up far faster than expected. American venture capitalists return from trips to China blown away by its energy. China’s government has set a goal of becoming dominant in artificial intelligence by 2030.

China still has huge weaknesses. Its tech firms are only worth about a third as much as America’s, and their investment budgets pale in comparison with those in the United States. They generate relatively little revenue abroad, and are puny in semiconductors and business-related software. Moreover, Chinese companies in other industries make less intense use of technology products than their American counterparts do. And although China does have two giant tech firms in Tencent and Alibaba, as well as lots of small ones, it has relatively few mid-sized companies in the range of $50-$400bn.

Nonetheless, China is now approaching parity on the most forward-looking measures. In e-commerce and mobile payments, its industry is now bigger than America’s. Its universe of “unicorns” (unlisted firms worth over $1bn) is almost as large, as is its venture-capital sector. Both are proxies for China’s ability to produce tomorrow’s giant firms. And in cutting-edge areas such as facial and speech recognition, China now has recognised leaders. There are even some signs that it is catching up in hard science: it has produced nearly as many papers on artificial intelligence cited by parties other than their author as America has.

At its present pace, China is still 10-15 years away from reaching tech parity with America. But for American tech firms, the time to get paranoid is now.

Source: The Economist

Budget: State-owned ICT companies by 2020

The Department of Telecommunications and Postal Services (DTPS) plans to establish a state IT company and a state ICT infrastructure company by 2020, although the exact functions of these new companies remain a mystery.

The telecoms ministry confirmed the news in the Estimates of National Expenditure (ENE) document, handed out to coincide with finance minister Malusi Gigaba’s National Budget Speech.

According to the DTPS, establishing these two new entities will involve merging different functions of the State IT Agency, Sentech and Broadband Infraco.

ITWeb first reported on the news of two state-owned ICT companies last year, noting the department had developed a consolidated SOC rationalisation process of key state-owned companies to form a state IT and ICT infrastructure company.

The ENE document says: “The department has submitted proposals for the establishment of these companies to Cabinet for approval and plans to draft their proposed mandates in 2017/18. Draft legislation will be developed for these companies in 2018/19 for submission to Parliament in 2019/20.

“To fund these activities, allocations to the ICT Enterprise Development and Public Entities Oversight programme are expected to amount to R797.4 million over the medium-term.”

Over the medium-term, the department pointed out it also plans to continue with the phased implementation of the 2016 White Paper on National Integrated ICT Policy, which will entail changes to existing legislation and the development of new legislation.

The White Paper was finalised and published in September 2016, and is supposed to replace the separate white papers on telecommunication (1996) and postal services (1998).

According to the department, it has identified that the Electronic Communications Act and the State Information Technology Agency Act require revision, and ICT commission and tribunal, and ICT state infrastructure bills need to be developed to make provisions for the department’s long-term strategic intent.

“To give effect to these activities, spending in the policy, research and capacity development programme is expected to amount to R271.2 million over the medium-term, increasing at an average annual rate of 4%.”

By Simnikiwe Mzekandaba for ITWeb 

Apple looking to buy cobalt directly from miners

Apple in talks to buy long-term supplies of cobalt directly from miners for the first time, according to people familiar with the matter, seeking to ensure it will have enough of the key battery ingredient amid industry fears of a shortage driven by the electric vehicle boom.

The iPhone maker is one of the world’s largest end users of cobalt for the batteries in its gadgets, but until now it has left the business of buying the metal to the companies that make its batteries.

The talks show that the tech giant is keen to ensure that cobalt supplies for its iPhone and iPad batteries will be sufficient, with the rapid growth in battery demand for electric vehicles threatens to create a shortage of the raw material. About a quarter of global cobalt production is used in smartphones.

Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer, according to one of the people, declining to be named as the discussions are confidential. Apple’s first discussions on cobalt deals with miners were over a year ago, and it may end up deciding not to go ahead with any deal, another person said.

An Apple spokesman declined to comment. Glencore Plc Chief Executive Officer Ivan Glasenberg late last year named Apple among several companies the miner was talking to about cobalt, without giving further details.

Securing supplies
The move means Apple will find itself in competition with carmakers and battery producers to lock up cobalt supplies. Companies from BMW AG and Volkswagen AG to Samsung SDI Co. are racing to sign multi-year cobalt contracts deals to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.

So far no major deals have been announced, although BMW’s head of procurement told Germany daily FAZ in early February that it was close to securing a 10-year supply deal.

Cobalt is an essential ingredient in lithium-ion batteries for smartphones. While smartphones use around eight grams of refined cobalt, the battery for an electric car requires over 1,000 times more. Apple has around 1.3 billion existing devices, while Apple Chief Executive Officer Tim Cook has been bullish about the prospects for electric vehicles.

The price of the metal has more than tripled in the past 18 months to trade at more than $80,000 a metric ton. Two-thirds of supplies come from the Democratic Republic of Congo, where there has never been a peaceful transition of power and child labor is still used in parts of the mining industry.

In recent years Apple has stepped up its engagement with cobalt suppliers after the origin of the metal in its supply chain came under scrutiny from human rights groups. In a report in early 2016, Amnesty International alleged that Apple and Samsung Electronics Co.’s Chinese suppliers were buying cobalt from mines that rely on child labor.

Last year Apple published a list of the companies that supply the cobalt used in its batteries for the first time, and said it would not let cobalt from small-scale mines in Congo into its supply chain until it could verify that the “appropriate protections” were in place.

Source: Bloomberg / MyBroadband

Social media is part of the modern fabric of interaction, with some reports suggesting that 66% of users spend time checking social media accounts while at work.

Industry tracker Mediakix suggests that popular platforms YouTube and Facebook consume one hour 15 minutes per day.

But when you leave your company, who owns your Twitter, YouTube, Facebook or even Gmail account? Legal experts in SA say the law is not clear.

“This is a grey area, and it would really depend on a thorough investigation of the history, purpose and origin of the social media account in question,” Pamela Stein, head of Employment Law at Webber Wentzel told Fin24.

“In order to demonstrate ownership, the employer would have to show that the social media account was clearly created for the purposes of promoting the growth of the business, and that this growth was achieved by social media activity generated during company time.”

Personal information

She added that factors over the ownership of a social media account would depend on whether the account had been created as part of the employment contract, or for the purpose of growing the organisation’s profile.

Unlike a company cellphone, computer or car, a social media account does not only exist on a mobile device, and the law assigns protections of personal information, as described in the Protection of Personal Information Act, which forbids unwanted sharing and exploitation of personal information.

“You have rights over your identity. However, if there was a clause in the contract of employment saying any personal account created during their employment is the property of the employer – perhaps the employer would have rights to it,” specialist technology attorney Russel Luck told Fin24, though he was careful to agree that the matter is not a settled one under South African law.

“If these accounts were set up so the employee could engage with the public as an extension of his work services, then perhaps the employer would have rights over it. Even more so if the email address used to verify the social media account is a work email, not personal one,” he added.

This reflects a US case in which Phonedog sued former employee Noah Kravitz over marketing on his Twitter account. The company alleged that 17 000 Twitter followers Kravitz had amassed was a customer list and demanded damages of $340 000.

A News24 survey revealed that 53% of social media users accessed the platforms while at while at work, and 3% said they would like to, but were not allowed.

Personal logins demand

Stein said that in SA, an employer seeking to claim a social media account would have to show just cause.

“Firstly, the employer would have to establish a basis for such a claim, and then sue the employee in the appropriate court depending on the cause of action.

“The employer could seek an order prohibiting the employee from any further use of the social media account and requiring the employee to take all reasonable steps to return the social media account to them.

“In addition, all social media sites allow users to report breaches et cetera and once such an order is obtained the social media platform could be notified and requested to assist.”

However, Luck argued that for a local company to demand personal logins to social media accounts would be a contravention of South African law.

“On the other side of the coin, SA law does follow international trends that you don’t need to give your employer your login details to your personal Facebook account – ie it’s unlawful to force an employee to do this.

“Where employers are making employment, promotion, dismissal or labour decisions based on access (or lack of access) to the personal Facebook account of an employee it would amount to unfair discrimination.”

Source: Fin24

A cyberattack caused the Internet disruptions during the Winter Olympics’ opening ceremony on Friday night, Olympic officials and security experts said.

Jihye Lee, a spokesman for the Pyeongchang Organizing Committee, confirmed Sunday that “the technology issues experienced Friday night were caused by a cyberattack.”

Mr. Lee did not elaborate on the cause but said that the attack had been quickly addressed and that systems had been stabilized by Sunday.

The cyberattack took out internet access and telecasts, grounded broadcasters’ drones, shut down the Pyeongchang 2018 website, and prevented spectators from printing out reservations and attending the ceremony, which resulted in an unusually high number of empty seats.

Security experts said they had uncovered evidence that the attack had been in the works since late last year. It was directed at the Pyeongchang Organizing Committee and incorporated code that was specifically designed to disrupt the Games or perhaps even send a political message.

“This attacker had no intention of leaving the machine usable,” a team of researchers at Cisco’s Talos threat intelligence division wrote in an analysis Monday. “The purpose of this malware is to perform destruction of the host” and “leave the computer system offline.”

In an interview, Talos researchers noted that there was a nuance to the attack that they had not seen before: Even though the hackers clearly demonstrated that they had the ability to destroy victims’ computers, they stopped short of doing so. They erased only backup files on Windows machines and left open the possibility that responders could still reboot the computers and fix the damage.

“Why did they pull their punch?” asked Craig Williams, a senior technical leader at Talos. “Presumably, it’s making some political message” that they could have done far worse, he said.

Talos’s findings matched those of other internet security companies, like CrowdStrike, which determined on Monday that the attacks had been in the works since at least December. Adam Meyers, vice president of intelligence at CrowdStrike, said his team had discovered time stamps that showed the destructive payload that hit the opening ceremony was constructed on Dec. 27 at 11:39 a.m. Coordinated Universal Time — which converts to 6:39 a.m. Eastern Time, 2:39 p.m. in Moscow and 8:39 p.m. in South Korea.

Attackers clearly had a target in mind: The word Pyeongchang2018.com was hard-coded into their payload, as was a set of stolen credentials belonging to Pyeongchang Olympic officials. Those stolen credentials allowed attackers to spread their malware throughout the computer networks that support the Winter Games on Friday, just as the opening ceremony was timed to begin.

Security companies would not say definitively who was behind the attack, but some digital crumbs led to a familiar culprit: Fancy Bear, the Russian hacking group with ties to Russian intelligence services. Fancy Bear was determined to be the more brazen of the two Russian hacking groups behind an attack on the Democratic National Committee ahead of the 2016 presidential election.

Beginning in November, CrowdStrike’s intelligence team witnessed Fancy Bear attacks that stole credentials from an international sports organization, Mr. Meyers said. He declined to identify the victim but suggested that the credential thefts were similar to the ones that hackers would have needed before their opening ceremony attack.

On Wednesday, two days before the ceremony, the Russian Ministry of Foreign Affairs made an apparent attempt to pre-empt any accusations of Russian cyberattacks on the Games. In a statement, released in English, German and Russian, the agency accused Western governments, press and information security companies of waging an “information war” accusing Russia of “alleged cyber interference” and “planning to attack the ideals of the Olympic movement.”

This was not the first Olympic opening ceremony that was a target for hackers. In the lead-up to the 2012 London Games, investigators uncovered attack tools and the blueprints to the Olympic stadium’s building management systems on a hacker’s computer.

It appeared that hackers planned to take out the power to the stadium, said Oliver Hoare, who led cybersecurity matters for the London Games. But officials successfully prevented an attack.

By Nicole Perlroth for The New York Times

PC distributor Mustek is assisting the City of Johannesburg (COJ) in a case where the city paid R6-million for 500 desktop computers to a service provider but the PCs were never delivered to the municipality.

In a statement, COJ mayor Herman Mashaba says he was informed that the city paid R6 million for 500 desktop computers that were ordered by the Group Information Communication Technology (GICT) department in 2014 but they were never delivered.

Opposition party the Democratic Alliance took over COJ from the ANC in August 2016. Mashaba, who took over the reins from the ANC’s Parks Tau, has publicly announced he intends to rid the city of corruption, which he blames on the previous administration.

Tip-off

According to Mashaba, the Group Forensic and Investigation Service (GFIS) received a tip-off from a member of the public who is closely linked to the service provider, saying that while she was working at the company, the city placed an order for 500 desktop computers.

It’s not clear which desktop PCs the city purchased but at retailer Incredible Connection, they range from R5 000 to R18 000. In the R6 million deal, the city paid R12 000 per computer.

Mashaba explains the computers were paid for with the assistance of officials working for the city but never reached the city.

The service provider, which is based in the south of Johannesburg, provides office supplies such as desktop computers, laptops, printer cartridges and toners, to name a few, he says.

A search and seizure operation was conducted this week by the members of the Hawks and officials from GFIS at the offices of the service provider.

Mashaba explains that about 37 computers worth R750 000 belonging to the city were seized during a joint operation.

He explains it is alleged that after winning the tender to supply the computers, the service provider placed an order with PC distributor Mustek to do the city’s imaging on the computers.

This was standard procedure, says Mashaba. “But with this batch, it is alleged that when he received it from Mustek, the service provider and his specialists in the information technology filed to remove the city’s imaging. Serial numbers of the seized computers were removed.”

In a statement sent to ITWeb, Mustek says: “In terms of Mustek’s distribution model, Mustek on-sells its products to its approved dealers, who then on-sell to end-users and public sector customers.

“Accordingly, we cannot comment on what transpired between the service provider and the City of Johannesburg. However, we are assisting the City of Johannesburg with their investigation of this matter.”

Preliminary investigations
It is alleged that most of the computers were sold to other clients and the 37 seized were used by the service provider’s staff members, Mashaba says.

He points out that preliminary investigations into the matter revealed that a city official was paid R1 million by the service provider for securing the deal for it. The city official allegedly took one official working for the service provider to a shop in the south which sells building material and spent R30 000 as a token of appreciation to the official, he adds.

“I was also informed that the service provider colludes with one of our officials who steals printer cartridges from our stores and sells them to the service provider who then sells it back to the city. When the team arrived at the property, they found one employee removing serial numbers from the boxes of the cartridges which had names of other municipalities and government departments.”

The team also established that the service provider illegally connected electricity supply to the property. City Power officials were called in and they removed the meter.

“The GFIS is currently conducting a number of investigations into contracts entered with ICT suppliers. I want to eliminate corrupt elements throughout the city, including investigating illicit deals and contracts that were secured by the previous administration and this includes our technology space,” concludes Mashaba.

By Admire Moyo for ITWeb 

They may not have the cachet of entrepreneurs, or geek chic of developers, but data protection officers are suddenly the hottest properties in technology.

When Jen Brown got her first certification for information privacy in 2006, few companies were looking for people qualified to manage the legal and ethical issues related to handling customer data.

But now it’s 2018, companies across the globe are scrambling to comply with a European law that represents the biggest shake-up of personal data privacy rules since the birth of the internet – and Brown’s inbox is being besieged by recruiters.

“I got into security before anyone cared about it, and I had a hard time finding a job,” said the 46-year-old, who is the data protection officer (DPO) of analytics start-up Sumo Logic in Redwood City near San Francisco.

“Suddenly, people are sitting up and taking notice.”

Brown is among a hitherto rare breed of workers who are becoming sought-after commodities in the global tech industry ahead of the European Union’s General Data Protection Regulation (GDPR), which goes into effect in May.

The law is intended to give European citizens more control over their online information and applies to all firms that do business with Europeans. It requires that all companies whose core activities include substantial monitoring or processing of personal data hire a DPO. And finding DPOs is not easy.

More than 28,000 will be needed in Europe and U.S. and as many as 75,000 around the globe as a result of GDPR, the International Association of Privacy Professionals (IAPP) estimates. The organization said it did not previously track DPO figures because, prior to GDPR, Germany and the Philippines were the only countries it was aware of with mandatory DPO laws.

DPO job listings in Britain on the Indeed job search site have increased by more than 700 percent over the past 18 months, from 12.7 listings per every 1 million in April 2016 to 102.7 listings per 1 million in December.

The need for DPOs is expected to be particularly high in any data-rich industries, such as tech, digital marketing, finance, healthcare and retail. Uber, Twitter (TWTR.N), Airbnb, Cloudflare and Experian (EXPN.L) are advertising for a DPO, online job advertisements show. Microsoft (MSFT.O), Facebook (FB.O), Salesforce.com and Slack are also currently working to fill the position, the companies told Reuters.

“I would say that I get between eight and 10 calls a week about a role (from recruiters),” said Marc French, DPO of Massachusetts email management company Mimecast. “Come Jan. 1 the phone calls increased exponentially because everybody realized, ‘Oh my god, GDPR is only five months away.’”

GDPR requires that DPOs assist their companies on data audits for compliance with privacy laws, train employees on data privacy and serve as the point of contact for European regulators. Other provisions of the law require that companies make personal information available to customers on request, or delete it entirely in some cases, and report any data breaches within 72 hours.

On a typical day, French said he monitors for any guidance updates for GDPR, meets with Mimecast’s engineering teams to discuss privacy in new product features, reviews the marketing team’s data usage requests, works on privacy policy revisions and conducts one or two calls with clients to discuss the company’s position on GDPR and privacy.

“Given that we’re trying to march to the deadline, I would say that 65 percent of my time is focused on GDPR right now,” said French, who is also a senior vice president of Mimecast.

The demand for DPOs has sparked renewed interest in data privacy training, said Sam Pfeifle, content director of the IAPP, which introduced a GDPR Ready program last year for aspiring DPOs.

“We already sold out all of our GDPR training through the first six months of 2018,” said Pfeifle, adding that the IAPP saw a surge in new memberships in 2017, from 24,000 to 36,000.

Those companies who have DPOs, meanwhile, are braced for poaching.

Many of those firms reside in Germany, which has long required that most companies that process data designate DPOs. They include Simplaex, a Berlin ad-targeting startup.

“Everyone is looking for a DPO,” said Simplaex CEO Jeffry van Ede. “I need to have some cash ready for when someone tries to take mine so I can keep him.”

Reporting by Salvador Rodriguez; Additional reporting by Stephen Nellis; Editing by Jonathan Weber and Pravin Char for Reuters

At Google, some employees use a tool that restricts time spent on e-mail. A senior Apple executive said his wife used a device that sets iPhone and iPad limits for their children. Members of a venture capital firm meditate before phone-free quarterly meetings. Slava Rubin, co-founder of crowdfunding site Indiegogo, has a strict no-screen policy for gatherings and adopted a similar rule for his bedroom.

“Literally, the only electricity we use is one lamp,” he says.

Faced with a deluge of text messages, social media updates, e-mails and other distracting alerts, tech executives, entrepreneurs and rank-and-file workers in Silicon Valley are trying to limit their use of the gadgets and digital services they helped create. The efforts show how the industry is grappling with its own concerns about the attention-sapping effects of the smartphone age. A survey released on Monday by Microsoft, the largest workplace software maker, acknowledged that new digital technology can make businesses less productive.

It definitely took a long time and much misery before I figured out where to draw the line
“It definitely took a long time and much misery before I figured out where to draw the line,” said Joe Hewitt, who led Facebook’s early efforts to put the social network on mobile phones. Hewitt said he used to fall into Internet rabbit holes, debating people online and scrolling through Twitter. Now he mutes all but the few friends on Facebook who share his interest in gardening, and he rarely posts anything outside the occasional Instagram picture of a homegrown fig or artichoke.

Some employees of Google use software called In Box When Ready. Downloadable for the Chrome browser, the program lets people schedule “lockouts” so they can’t access messages during certain periods. It also hides notifications of new e-mails except for specific periods of time, removing the temptation to dive into a growing backlog. The tool also provides feedback about how much time a person is spending writing and reading messages, versus targets they set. “I’m using Inbox When Ready to protect my focus,” the e-mails say below user sign-offs.

At Facebook, wood-working and analogue art-making areas at the headquarters campus give employees the chance to step away from screens. In San Francisco, Facebook co-founder Dustin Moskovitz, now running the business software company Asana, encourages younger employees to turn off notifications on their phones. Rudin of Indiegogo only checks e-mail during designated times, limiting his messages to quick exchanges. Anything that takes longer he does in person or over the phone.

No notifications
Alexander Ljung, the co-founder of SoundCloud, says he turns off all notifications on his phone outside of a messaging app that few people can reach. Thomas Meyerhoffer, a former Apple industrial designer, also blocks alerts on his phone and moved all apps off his iPhone X home screen. Among friends and colleagues, Meyerhoffer said conversations about the consequences of modern technology are common these days. Google searches for “smartphone addiction” hit an all-time high in January.

“There is an increasing awareness,” said Meyerhoffer, who now designs surfboards and co-founded the door-lock company Latch. “Every single person from every kind of occupation is talking about this.”

There’s a growing body of evidence about the harmful effects of social media and smartphones, particularly on younger people. A recent report by researchers at San Diego State University and the University of Georgia concluded teens who spend more time online are less happy than those who spend time on other activities. Another report by Facebook’s own researchers last year found people who passively scroll through posts felt worse afterwards. A group of pediatric and mental health experts are lobbying Facebook to discontinue its Messenger Kids app. In Paris, schools are banning mobile phones altogether.

Meanwhile, prominent figures in the technology industry are criticising companies like Facebook. Sean Parker and Chamath Palihapitiya, former Facebook executives, have said the product is addictive and harmful to mental health. Apple CEO Tim Cook said he wouldn’t let his nephew on social media. Salesforce.com CEO Marc Benioff compared Facebook to cigarettes.

The warnings are beginning to reach board rooms, too. Apple investors Jana Partners and the California State Teachers’ Retirement System, recently asked Apple to study the harmful effects of smartphones on mental health and offer more protections for children. A Facebook shareholder is pushing its board to create a risk committee that will study the potential financial harm to Facebook if its product leads to depression or other mental health problems.

“The technology industry is reaching the point where they will need to put more resources into addressing the negative externalities of their products and services,” says Jonas Kron, senior vice president at Trillium Asset Management, the Facebook investor lobbying for the risk committee.

When the iPhone hit, you couldn’t stop the stream of e-mails because the devices were always on people
As “mindfulness” enters the Silicon Valley lexicon, the urge to unplug is creating new business opportunities. Digital detox retreats where people spend several days without technology are increasingly popular among tech workers, as is meditation. Jack Dorsey, the CEO of Twitter and Square, recently finished a 10-day silent meditation that strictly prohibits any communication.

Asana co-founder Justin Rosenstein, who helped create Facebook’s “like” button, meditates one hour per day. Benioff has mandated that each floor of the Salesforce’s soaring new office tower in San Francisco have a meditation room, “where employees can put their phones into a basket or whatever, and go in to an area where there’s quietness”, he said in 2016. And for those without time for a retreat or access to a dedicated space, apps including Calm and Mindfulness Daily are available.

Jon Callaghan, founder of True Ventures and former chairman of the National Venture Capital Association’s board of directors, said phones are not allowed in partner gatherings. At the firm’s quarterly meetings, participants meditate at the beginning of every session. He limits phone usage at home and his family has a no-device policy for meals.

Tony Fadell, the former Apple executive involved in the creation of the iPhone, said he experienced the distracting effects of the device almost immediately after its 2007 release. Most employees at the company didn’t use BlackBerry devices or other pre-iPhone smartphones, meaning e-mail was limited to certain times of the day. Messages outside work hours were rare. “When the iPhone hit, you couldn’t stop the stream of e-mails because the devices were always on people,” Fadell says. He thinks companies should block employees from sending and receiving e-mails during non-work hours.

The technology industry needs to own up to the addictive qualities of its creations and add new safeguards that make it easier for people to put away their phones, Fadell said. Apple and Google, owners of the two largest smartphone operating systems, should offer apps that break down smartphone usage — time spent reading and writing texts, in apps such as Facebook, browsing the Web, writing e-mails — similar to how their health apps show steps walked or hours slept each day, Fadell said.

“They have all that data, just give it back to us,” Fadell said. “This isn’t like building a self-driving car, which is 10 000-times harder and costs way more.”

Companies are beginning to get the message. After Jana and CalSTRS demanded action in early January, Apple said it plans new features to give parents more control over how children use its devices. “We think deeply about how our products are used and the impact they have on users,” the company said in a statement. Facebook CEO Mark Zuckerberg is changing the company’s news feed to reduce mindless scrolling and increase meaningful interactions between friends and family. Google recently ran an ad highlighting the mental health implications of smartphone and social media use.

“These devices absorb so much of kids’ lives and it’s a bit of a challenge to set the boundaries.”

Regardless, many technology industry veterans are taking their own measures. Fadell, whose family has no-screen Sundays, uses a product called Circle that sets online time limits and blocks certain content. The device connects to a Wi-Fi router, making it easier to set restrictions for any device in a household connected to the network. Devices can be disconnected completely during pre-set hours, like bedtime.

“Some families are more concerned about the kind of content they’re exposed to,” said Circle CEO Lance Charlish. “Others may be worried about device time and life balance.” The company has hundreds of thousands of customers and revenue has doubled every year, he added, without being more specific.

One customer is Luca Maestri, Apple’s chief financial officer, according to an interview he gave last year to journalist and award-winning author Maria Teresa Cometto.

“These devices absorb so much of kids’ lives and it’s a bit of a challenge to set the boundaries,” Maestri told Cometto. His wife decided to use Circle as a means to moderate their children’s iPhones and iPads, according to a write-up of the interview by i-Italy, a magazine about the country and its ties to the US. It’s unclear if the CFO or his wife still use the device. An Apple spokesman declined to comment.

Rudin, of Indiegogo, said that if all else fails, religion can help. His family observes the Jewish custom of Shabbat every Friday night through Saturday, meaning technology use is restricted. “My wife will turn her phone and any other tech off for 25 hours straight,” he wrote in a weekday e-mail. “I try to do the same, but it’s not always possible :)”

Source: Tech Central
Reported by Adam Satariano and Selina Wang for Bloomberg

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