July 25 (Bloomberg) — Juniper Networks Inc., the second- largest maker of Internet networking equipment, is reorganizing its software business under the leadership of Bob Muglia, a 23- year employee of Microsoft Corp.

Muglia will be executive vice president for the Software Solutions unit and oversee Juniper’s overall software strategy, the company said today in a statement. At Microsoft, Muglia most recently ran the unit that makes server software for corporate computers. He will report to Juniper Chief Executive Officer Kevin Johnson, who also formerly worked at Microsoft.

Juniper is bolstering its management ranks as it tries to take market share from larger rival Cisco Systems Inc. The addition of Muglia will help improve Juniper’s focus on the software that underlies its various networking products, including cloud-computing technology. Cloud systems let companies run their programs from a few Internet data centers, rather than keeping software on local hard drives.

“There’s a lot of growth in networking, with the explosion in devices and the development of the cloud, and Juniper is the best positioned for this opportunity.” Muglia said in an interview today.“Cisco is a great company, but I think Juniper has a more modern approach, a more consistent approach.”

Server Shift

In the 1990s, Muglia helped spearhead Microsoft’s expansion from personal-computer software into more powerful business software for servers. Until then, many corporate-computing tasks were handled by more expensive machines such as mainframes. The Server and Tools division had revenue of $17.1 billion in fiscal 2011, making it Microsoft’s third-largest business behind Windows and Office.

In recent years, Muglia had focused on developing Azure, a key element of Microsoft’s cloud-computing strategy. Azure consists of technologies for running software from an Internet data center, where it can be updated and secured more easily than on local servers.

Microsoft CEO Steve Ballmer announced Muglia’s departure on Jan. 10, saying the group needed“new leadership.”

Juniper, based in Sunnyvale, California, fell 60 cents to $30.67 today on the New York Stock Exchange. The shares have declined 17 percent this year.

–Editors: Jillian Ward, Cecile Daurat

To contact the reporters on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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The National Right-to-Carry Reciprocity bill would require all states to allow out-of-state visitors to conceal and carry firearms as long as the visitors are permitted to do so in their home states. The relatively stringent conceal-and-carry laws of California, Illinois and New York, for example, would be rendered obsolete. So- called shall-issue states, where authorities have little discretion over permits (and thus“shall issue” them to anyone who meets the criteria), would become the new norm. The state with the most lax laws would establish a lowest common denominator for the nation.

The Police Foundation says the bill, if enacted, will endanger the lives of police officers, who would have no way of distinguishing legitimate out-of-state gun permits from fraudulent ones. The Major Cities Chiefs Association, another police group, calls the legislation“dangerous and unconstitutional.” Yet even those familiar with the state of gun politics in the U.S. might be surprised to learn that, despite such opposition, the bill is already co- sponsored by the majority of the House of Representatives. South Dakota Republican John Thune says he will introduce similar legislation in the Senate in coming weeks.

So the National Rifle Association appears poised for another victory. The gun lobby ingeniously marries the desires of a manufacturing sector to the diverse interests of hunters, sportsmen, gun enthusiasts and citizens fearful for their safety — while criminals, including Mexican drug gangs, hitch a ride on the organization’s maximalist positions.

Because the gun lobby has succeeded in having government data on firearms restricted, and because the market in private sales at flea markets and gun shows is unregulated, the precise number of gun sales in the U.S. is unknown. But the decline in gun ownership — down from more than half of households in the late 1970s to one-third of households today — makes the business imperative clear: to maintain profits, the industry must sell more guns to fewer people.

Concealed-carry laws enable manufacturers to appeal to old customers with new wares, ranging from the Beretta PX4 (“well-suited for concealed carry,” according to the manufacturer’s website) to the Ruger SR40c (“another strong concealed carry option from Ruger”). Weighing only a pound and a half — Colt’s Single Action Army Revolver, by contrast, weighs 40 ounces — such“subcompact” guns are easily hidden and cost less than $600.

Do concealed-carry laws lead to increased gun violence? The Violence Policy Center counts 319 people killed by concealed-handgun permit-holders, although it’s hard to know what role, if any, the permits played in those killings. Crime is complex. But common sense needn’t be: More hidden guns increase the potential for violence, and that can’t be good.

Lawmakers representing gun-friendly regions have used states’-rights arguments to fend off health-care reform, federal education policy and more. For the sake of consistency, those same lawmakers should avoid imposing their concealed-carry mandate on states that don’t want it.

Read more Bloomberg View editorials.

–Editors, Francis Wilkinson, Tobin Harshaw

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To contact the Bloomberg View editorial board: view@bloomberg.net.

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Samsung is estimated to have sold between 18 million and 21 million smartphones globally in the period, compared with 16.7 million for Nokia and 20.3 million iPhones, Neil Mawston, a London-based analyst at the research company, said in an e- mailed response to questions on July 22.

The maker of Galaxy devices is on track to pass Nokia and Research In Motion Ltd. in smartphone sales for the first time to become Apple’s closest rival, as consumers flock to devices running Google Inc.’s Android system. Samsung, which aims to more than double smartphone sales this year, and Apple are vying to replace Nokia as the biggest smartphone seller and capitalize on surging demand for computer-like handsets.

“Apple, Samsung and Nokia are in a close three-way battle,” said Mawston.“Samsung’s Android portfolio is selling strongly in most regions. Samsung and Apple will be at similar levels in smartphones by the end of the year.”

Including basic phones, Samsung will probably have a 20 percent share this year, compared with Nokia’s 26 percent, closing the gap to the narrowest ever, he said.

Galaxy S II

Samsung’s smartphone sales, ranked fourth in the first quarter, are accelerating after it began selling the Galaxy S II, a successor to its best-selling Android device introduced last year to counter Apple.

The 4.27-inch model unveiled in February helped Samsung more than double operating profit at its mobile phone business in the second quarter, according to five analysts polled by Bloomberg News.

Apple reported net income that beat estimates on July 19, lifted by record sales of iPhones and iPads. Earnings for the three-month period ended June 25 was followed by Nokia’s first quarterly loss since 2009 as the Finish company struggles to sell handsets based on its 10-year-old Symbian software.

Android’s share will rise to 44 percent by 2015 from 39 percent this year, according to a forecast by International Data Corp. Global sales of smartphones will soar 55 percent to 472 million units this year, according to the researcher.

Samsung is also tapping consumers looking for lower-priced models with devices using its own Bada software. It plans to introduce a new model based on the system in the second half, J.K. Shin, head of Samsung’s mobile-phone division, said July 20.

–Editors: Ravil Shirodkar, Paul Tighe

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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July 22 (Bloomberg) — Advanced Micro Devices Inc., the second-largest maker of processors for personal computers, rose in early trading after forecasting third-quarter sales that exceeded analysts’ estimates, citing orders for new chips.

Revenue in the current period will increase 10 percent, plus or minus 2 percentage points, from the second quarter, Sunnyvale, California-based AMD said yesterday. That indicates sales of as much as $1.76 billion. Analysts were estimating $1.7 billion, the average forecast in a Bloomberg survey.

Since Chief Executive Officer Dirk Meyer resigned in January, the company has been searching for a replacement to lead an effort against rival Intel Corp. AMD’s new products, called Fusion, combine the functions of processors and graphics chips, aiming to win laptop market share. Analysts had been predicting a smaller sales gain amid evidence of lower consumer PC demand in developed markets.

“It’s a pretty good guide in a weak consumer PC market,” said Sujeeva De Silva, a San Francisco-based analyst at ThinkEquity LLC.“Fusion has done pretty well out of the gate. The success is showing.”

The shares rose as much as 10 percent to $7.15 in early trading after closing at $6.50 on the New York Stock Exchange yesterday. The stock had declined 21 percent this year before today.

Revenue Forecasts

AMD’s third-quarter forecast for as much as 12 percent sequential sales growth compares with an average analyst prediction of 8 percent, and is larger than the percentage growth at the midpoint of Intel’s revenue forecast for the period, said De Silva, who recommends buying AMD shares.

Second-quarter net income was $61 million, or 8 cents a share, compared with a loss of $43 million, or 6 cents, a year earlier, AMD said yesterday in a statement. Analysts had predicted profit of 7 cents, the average estimate in a Bloomberg survey. Sales fell 4.8 percent to $1.57 billion.

Revenue dropped because of slower demand for server chips, Chief Financial Officer Thomas Seifert said on a conference call yesterday. Gross margin, or the percentage of revenue remaining after deducting the costs of production, was 46 percent.

‘Top Priority’

Seifert is running AMD while the company looks for a successor to Meyer, who left after a dispute with the board over how quickly the company will be able to get into the market for mobile-phone and tablet-computer chips. AMD said yesterday it plans to have a processor for tablets in 2013.

“The search for a new CEO remains a top priority,” said Harry Wolin, AMD senior vice president and general counsel, on the conference call.“Meeting a timeline is not the driving force for the search. Finding the right candidate is.”

Wolin declined to say whether the company will be able to name a new leader this quarter.

Seifert has said he doesn’t want the top position permanently. The company was conducting a second round of interviews with a number of candidates, two people with knowledge of the hiring process said earlier this week.

People familiar with the search said last month that AMD had approached and been rebuffed by at least four candidates. Apple Inc. Chief Operating Officer Tim Cook, Oracle Corp. Co- President Mark Hurd, EMC Corp. Chief Operating Officer Pat Gelsinger and Carlyle Group Managing Director Greg Summe spurned the chipmaker’s overtures, the people said at the time.

–With assistance from Zachary Tracer in New York. Editors: Jillian Ward, Nick Turner

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net.

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AT&T activated 3.6 million iPhones, while Verizon Wireless, the country’s largest wireless carrier, activated 2.3 million in the second quarter. AT&T benefited from cutting the price of the older 3GS model to $49, compared with $199 for the iPhone 4.

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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Reardon, who has been general manager of intellectual property at IBM, is taking over from Elias Mendoza, the former global head of corporate development, said the person who declined to be identified because IBM hasn’t announced the move. Mendoza joined Union Square Advisors LLC as a partner in New York, the firm said in a statement yesterday.

IBM, which has made more than 100 deals in the past decade, said last year it plans to spend about $20 billion on acquisitions through 2015. The Armonk, New York-based company had $11.7 billion in cash at the end of June.

IBM made 23 acquisitions worth $4.26 billion since Mendoza took over M&A in June 2009, according to data compiled by Bloomberg. Over that time, IBM’s biggest deal was the $1.7 billion purchase of analytics-technology provider Netezza Corp last year. The company has announced only one deal this year, according to Bloomberg data.

Mendoza, who joined IBM in 2006 as head of corporate development in Japan and growth markets, previously worked for Morgan Stanley in New York, London and Tokyo.

Doug Shelton, an IBM spokesman, declined to comment.

IBM climbed $1.25 to $184.90 at 4 p.m. in New York Stock Exchange trading, and has gained 26 percent this year.

–Editors: Peter Elstrom, Elizabeth Wollman

To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net.

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net; Peter Elstrom in New York at pelstrom@bloomberg.net.

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July 21 (Bloomberg) — Hynix Semiconductor Inc., the world’s second-largest maker of computer-memory chips, reported a 34 percent drop in second-quarter profit after slowing personal-computer sales drove down chip prices.

Net income fell to 473 billion won ($448 million) from 718.7 billion won a year earlier, Ichon, South Korea-based Hynix said today in a statement. That compares with the 417.8 billion won average of 21 analyst estimates compiled by Bloomberg.

Hynix, on sale by its creditors, joins Micron Technology Inc. in reporting a slump in profit as demand for consumer electronics products slows. The South Korean chipmaker is counting on sales of semiconductors used in smartphones and tablet computers, such as NAND flash, to revive earnings.

“Demand almost evaporated,” Seo Won Seok, an analyst at NH Investment& Securities Co. in Seoul, said before the announcement.“NAND flash is doing relatively well. If demand for NAND flash recovers faster than expected, the third-quarter and fourth-quarter numbers might improve.”

Hynix fell 0.6 percent to 24,050 won at 9:46 a.m. in Seoul, while the benchmark Kospi index declined 0.3 percent.

Operating profit, or sales minus the cost of goods sold and administrative costs, declined 56 percent to 446.9 billion won and sales fell 16 percent to 2.76 trillion won.

Intel Forecast

The price of the benchmark DDR3 2-gigabit DRAM fell 30 percent in the second quarter, according to data from Taipei- based Dramexchange Technology Inc., operator of Asia’s largest spot market for semiconductors. Prices may bottom out in the second half, helped by seasonal demand and new products to be released from September, Lee Ka Keun, an analyst at Hana Daetoo Securities Co., wrote in a July 1 report.

Chip demand will continue to shift toward mobile devices and servers from PCs, a trend that may benefit South Korean memory-chip makers as such products account for bigger portions of their output than those of competitors, Shin Hyun Joon, an analyst at Dongbu Securities Co. wrote in a July 5 report.

Intel Corp., the world’s biggest chipmaker, yesterday forecast third-quarter revenue may be $14 billion, exceeding the $13.5 billion average estimate compiled by Bloomberg, buoyed by corporate computer upgrades and first-time purchases by consumers in emerging markets.

Sales of DRAM chips for servers needed to deliver computing, software and storage over the Internet may grow 77 percent, while demand for semiconductors for mobile devices may rise 88 percent this year, Shin wrote.

Still, supply of such products may outpace growth in demand, damping profit margins, NH’s Seo said.

Hynix shareholders led by Korea Exchange Bank are seeking to sell all or part of their 15 percent stake in the chipmaker, with SK Telecom Co. and STX Group having submitted preliminary bids. The deal may be the largest share sale of a South Korean technology company since July 1999, when Hynix bought a majority holding in Hyundai Microelectronics Co. for 2.56 trillion won, according to data compiled by Bloomberg.

–Editors: Young-Sam Cho, Anand Krishnamoorthy

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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July 18 (Bloomberg) — Cisco Systems Inc., the largest networking-equipment maker, plans to eliminate about 6,500 jobs, or 9 percent of its full-time workforce, to help trim $1 billion in annual costs and step up profit growth.

The cuts include 2,100 employees who took a voluntary early-retirement program, Cisco said today in a statement. As part of the move, the company expects to record pretax restructuring expenses of $1.3 billion. About $750 million will come in the fiscal fourth quarter and the remainder will be booked in fiscal 2012. Cisco also said it will sell a manufacturing plant in Mexico, transferring 5,000 workers.

Cisco Chief Executive Officer John Chambers has been eliminating jobs and abandoning less-profitable businesses amid slowing sales gains. The company has lost market share in its main switching and routing units to Juniper Networks Inc. and Hewlett-Packard Co., and its forays into consumer products, such as the Flip video camera, faltered.

“Cisco recognizes that it’s in an increased competitive environment and it needs to lower its costs,” said Alkesh Shah, an analyst at Evercore Partners in New York.“These actions are taking them to a lower-cost model.” Shah rates the stock an“overweight” with a price target of $24.

Cisco slipped 16 cents to $15.44 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have declined 24 percent this year.

Juarez Plant

Cisco, based in San Jose, California, said it will sell the television set-top box plant in Juarez, Mexico, to Foxconn Technology Group. Cisco acquired the site when it took over Scientific-Atlanta Inc. in 2006. No job losses are expected from the sale, Cisco said.

The job cuts will come from across the company and aren’t concentrated in a single unit, said Karen Tillman, a company spokeswoman, in an interview. She declined to provide a geographic breakdown of the reduction. The company said affected workers in the U.S., Canada and other countries it didn’t name will be notified the first week of August. Other workers may be notified later.

Chambers is exiting some of the dozens of new businesses Cisco entered in the past decade as he aims to shore up the switching and router businesses that made up more than half of the company’s revenue last year.

Losing Share

Cisco’s share of worldwide switching revenue dropped 5.8 percentage points to 68.5 percent in the first quarter of 2011 from a year earlier, according to a May report from Dell’Oro Group, a Redwood City, California-based researcher. Hewlett- Packard gained switching share in that period. In global router sales, Cisco lost 6.4 percentage points to 54.2 percent of the market, while Juniper gained, Dell’Oro said.

Fired workers will receive six months of severance pay and four months of job search assistance, Tillman said.

Today’s cuts are in addition to the 550 employees the company fired when it closed its Flip video-camera unit in May as part of a reorganization of the consumer business. Two people familiar with the company’s plans said last week that Cisco was planning to shed as many as 10,000 workers.

The company also intends to ramp up demand with an updated version of its flagship Catalyst 6500 switch, announced last week at the Cisco Live conference in Las Vegas. The new switches are designed to be faster and more secure, and accommodate as many as 10,000 mobile devices from a single machine.

Cisco’s revenue is projected to rise 7 percent this year to $43 billion, less than the 11 percent growth posted in 2010, according to the average estimate of analysts in a Bloomberg survey. Analysts have an average target price of $20.48 for the stock, Bloomberg data show.

–Editors: Nick Turner, Jillian Ward

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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July 15 (Bloomberg) — Nokia Siemens Networks, which this week ended talks to sell a stake to buyout firms, needs to cut jobs to gain the option of independence as competition with rivals including Huawei Technologies Co. intensifies.

The phone equipment venture between Nokia Oyj and Siemens AG generated sales of about $254,000 per employee last year, 19 percent less than larger rival Ericsson AB, based on numbers from the companies’ financial reports. The figure for both manufacturers is sinking as selling prices for equipment such as base stations and packet-switching networks decline.

Nokia Siemens said this week that it plans to improve its competitiveness“as a standalone entity” while announcing the end of talks over a stake sale. The Espoo, Finland-based venture, which has been unprofitable for all but one quarter since it started in April 2007, has increased its headcount to about 73,000 from about 60,000 after additions for outsourcing and the acquisition of a Motorola Solutions Inc. unit. In Germany alone, Nokia Siemens has almost 10,000 workers.

“They haven’t fired enough,” said James Crawshaw, a London-based equity analyst at Standard& Poor’s.“Siemens historically over-engineered their products and in certain industry verticals people will pay for that, but the telecom sector isn’t prepared to pay that premium for German engineering when Chinese engineering gets the job done.”

Nokia fell 0.6 percent to 3.97 euros at 11:46 a.m. in Helsinki trading. Siemens declined 0.6 percent to 92.87 euros in Frankfurt.

‘Options’

While an initial public offering for Nokia Siemens is a possibility, it could only happen after the company becomes profitable, said people familiar with the situation, declining to be named because the deliberations are private.

Ben Roome, a Nokia Siemens spokesman, declined to comment. Operating matters regarding Nokia Siemens are the responsibility of management, said Wolfram Trost, a spokesman for Siemens.

“The current focus is on improving profitability and managing costs,” said James Etheridge, a Nokia spokesman, declining to discuss the possibility of job eliminations.

Nokia said July 12 that it’s open to other ownership options for the 50-50 venture, without elaborating. The unit may report second-quarter earnings before interest and taxes of 82.7 million euros ($117 million) on revenue of 3.3 billion euros, JPMorgan Cazenove analyst Sandeep Deshpande wrote in a July 13 report. Nokia, the biggest maker of mobile phones by volume, reports earnings July 21.

Nokia, which has more shared interest with Nokia Siemens since both sell to phone companies, is paring down assets that aren’t essential to its main devices product lines.

Cash

Nokia and Siemens had a combined total of more than 26 billion euros in cash and short-term investments at March 31. That money could help Nokia Siemens to buy out employees whose qualifications don’t fit the current business profile, make better offers to customers, or acquire assets.

“I don’t think it’s an IPO-ready company,” said Bengt Nordstroem, who heads Stockholm-based telecommunications consultant Northstream AB.“There is strong growth in mobile broadband, but also tough competition so prices are still very low.”

The joint venture has lost 3.35 billion euros from operations, restructuring, and impairment charges for Siemens since it was formed. Siemens Chief Financial Officer Joe Kaeser has repeatedly said that telecommunications is no longer a core business for the company.

Market Share

Nokia Siemens and Ericsson have focused on wireless network equipment such as base stations and core networks and have expanded in software and services to a greater extent than competitors Alcatel-Lucent SA, Huawei and ZTE Corp. Nokia Siemens gets about half its revenue from services, including running entire networks remotely from India and Portugal. Ericsson counts about 40 percent of its revenue as services.

Nokia Siemens had 20.4 percent of the wireless equipment market in the first quarter, up from 18.2 percent a year earlier, according to Redwood Shores, California-based researcher Dell’Oro Group. Huawei was almost tied with Nokia Siemens at 20.3 percent and Ericsson had 34.5 percent. Alcatel- Lucent’s share was 13.7 percent.

Nokia Siemens announced in November 2009 that it would eliminate between 7 percent and 9 percent of the 64,000 positions it had at the time. The aim was to cut 500 million euros in annual costs by the end of this year. It has reported more than 1.05 billion euros in operating losses since the job cuts announcement.

“They need to remove the question mark around the ownership structure,” Sylvain Fabre, an analyst at Stamford, Connecticut-based Gartner Inc., said in a phone interview.“The first thing you learn in business school is you never do 50-50, you do at least 51-49. Until you really know who’s in charge you don’t really know what direction is ultimately imposed in the company.”

–Editors: Robert Valpuesta, Kenneth Wong.

To contact the reporters on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net; Richard Weiss in Frankfurt at Rweiss5@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net

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