When mobiles outshine other tech devices; Asia's tale of successions; UK service sector shrinks; Reader's Digest starts insolvency proceedings

1 When mobiles outshine other tech devices (Straits Times) The global tech industry has become a tale of two sectors, with mobile devices surging at the expense of older electronics that are struggling, a forecast showed. A survey presented ahead of the International Consumer Electronics Show, the biggest trade show of its kind, projects modest growth of four per cent for the industry expected to generate sales of US$1.1 trillion this year.

But half of the revenues will come from mobile connected devices - smartphones, tablets and mobile computers, according to the forecast by the Consumer Electronics Association (CEA) and GfK Research. The industry has been buffeted by the huge shift to mobile, and also by sluggish global economic conditions, especially in recession-hit Western Europe.

2 Asia’s tale of successions (Kishore Mahbubani in Khaleej Times) To the extent that culture matters in politics, the recent spate of leadership changes in Northeast Asia suggests that Asian societies are more tolerant — if not supportive — of dynastic succession. South Korea’s recently elected president, Park Geun-hye, is the daughter of Park Chung Hee, who ruled the country from 1961 to 1979. China’s incoming president, Xi Jinping, is the son of Xi Zhongxun, a former vice premier.
Japan’s new prime minister, Shinzo Abe, is the grandson and grandnephew of two former Japanese prime ministers, and the son of a former foreign minister. Kim Jong-un is the son and grandson of his two predecessors in North Korea.

This pattern is not confined to Northeast Asia. President Benigno Aquino III of the Philippines is the son of former President Corazon Aquino. Prime Ministers Najib Abdul Razak and Lee Hsien Loong of Malaysia and Singapore, respectively, are also sons of former prime ministers. In India, Rahul Gandhi is waiting in the wings, preparing to step into the shoes of his great-grandfather (Jawaharlal Nehru), grandmother (Indira Gandhi), and father (Rajiv Gandhi). In Pakistan, Bilawal Bhutto Zardari — son of President Asif Ali Zardari and the assassinated former prime minister, Benazir Bhutto, and grandson of former Prime Minister Zulfikar Ali Bhutto — recently made his political debut. Is dynastic succession becoming the norm throughout Asia?

There is no denying that a distinguished lineage gives political candidates an advantage over rivals. But it is also clear that having distinguished relatives is no guarantee of success. Asia’s pattern of dynastic leadership does not render it immune from the challenges that the rest of the world faces. As Asia creates the world’s largest middle class — projected to grow more than three-fold, from 500 million to 1.75 billion, by 2020 — it will also have to cope with demands for more competent and more accountable governments. In Asia today, uneasy lies the head that wears the crown. 

3 UK service sector shrinks (Josephine Moulds in The Guardian) A shock fall in activity in Britain's services sector at the end of last year has put the economy on the road to a triple-dip recession, as economists predict the UK will be stripped of its triple-A credit rating.

The services sector – which accounts for three-quarters of Britain's economic output – shrank for the first time in two years in December, suggesting the UK economy contracted in the fourth quarter. If output drops again over the next three months, the UK will fall into its third recession in five years – an unprecedented triple dip.

The data came out as Citi released a report suggesting the UK economy will disappoint again this year and could lose its prized triple-A credit rating. Michael Saunders, economist at Citi, said Britain is likely to suffer from weak growth, inflation will stay stubbornly high, and the government will fail to make a substantial dent in the deficit. "With the public debt/GDP ratio set to surge further in coming years, we think the UK will lose its AAA rating in 2013," he said.

The closely watched CIPS/Markit purchasing managers index (PMI) for services dropped from 50.2 to 48.9 in December, below the 50 mark that separates expansion from contraction. It is the lowest reading since April 2009 and substantially undershot analyst forecasts of a rise to 50.5. The news will reignite the debate over whether the Bank of England is likely to expand its quantitative easing (QE) programme to try to kickstart the economy.

4 Reader’s Digest starts insolvency proceedings (Rupert Neate in The Guardian) Three-quarters of the British staff of Reader’s Digest were made redundant on Friday after its private equity tycoon owner pulled the plug on the magazine's direct marketing division.Jon Moulton's Better Capital private equity firm made 90 of Reader's Digest UK's 120 staff immediately redundant as it began insolvency proceedings of the magazine's CD, DVD and bookselling arm. It comes less than three years after Better rescued the monthly magazine from administration and promised to “return the business to its heyday”.

Moulton's purchase of the magazine in April 2010 was controversial because he did not take on responsibility for the company's £125m pension fund deficit. The fund, which has 1,600 members, was placed into the Pension Protection Fund, which meant those that had yet to retire lost 10% of their entitlement. At the time Moulton said Reader's Digest was a profitable business without the difficulty of the pension fund.

Reader's Digest, founded by DeWitt Wallace while he was recovering from shrapnel wounds sustained during the first world war, had 2 million readers in its 1990s heyday. But its circulation has been dropping by 11.5% a year to less than 400,000, of which nearly are given away free.