(Reuters) – Apple’s iPhone 5, launched to great fanfare in the United States on Wednesday, will not work on superfast mobile broadband networks in much of Europe, potentially confusing consumers and setting back the development of 4G services in the region.

The problem lies in the range of spectrum – the airwaves used to carry mobile signals – used in Europe. The iPhone 5 is not compatible with 4G services on the 800MHz and 2.6GHz bands deployed across much of western Europe, including Spain, Italy and France. Instead, it works on the 1.8GHz band, which is still being used for voice calls by most operators in Europe.

Apple will produce three models of the iPhone: one optimized for U.S. carrier AT&T’s network and spectrum bands, another for Sprint and Verizon’s U.S. norms and a third for the rest of the world, including two European operators.

Only Deutsche Telekom in Germany and Everything Everywhere in the UK will initially be able to offer the fastest internet access to iPhone 5 users in their markets, because they are the carriers holding the right frequencies.

Apple could later introduce other models compatible with more European operators’ needs, analysts say, but for now some European operators will be hamstrung.

Vodafone and Telefonica’s 02 look to be at a disadvantage in the UK and Germany, two of Europe’s biggest mobile markets, because the iPhone won’t run on their 4G gear.

“Telecoms executives in Europe had a big dream that the iPhone would be the accelerator to kickstart 4G demand in their markets,” Informa analyst Thomas Wehmeier said. “That dream has now gone up in smoke because Apple has made the U.S. and Asia norms the priority and short-changed Europe.”

Europe’s construction of 4G networks is lagging behind the U.S. and Asia, though European operators are expected to spend $15.25 billion over the next three years to upgrade infrastructure to 4G speeds, according to Rethink Technology Research.

The region has only a few hundred thousand 4G subscribers, most of whom use laptop dongles or home routers because there are few compatible smartphones available.

That is starting to change as Samsung, Nokia and HTC bring out 4G-compatible smartphones that work on European norms. The lack of a compatible iPhone, however, is sure to disappoint some operators hoping to benefit from the positive marketing buzz around Apple’s latest device.

It remains to be seen how much a lack of 4G speeds will hamper sales of the iPhone 5 in Europe. Apple doesn’t break down regional revenue, but market research group Canalys says that 22 percent of iPhones sold in the second quarter were in Europe.

Consumers don’t necessarily understand the thorny details of mobile broadband speeds, and operators don’t make things simpler with advertising that often refers to souped-up 3G technologies – which boost speeds via a software upgrade – as offering 4G speeds.

A survey from consultancy Analysys Mason showed that 46 percent of iPhone 4 users believe that they already have 4G capability, even though they don’t.

Analyst Matthew Howett at the consultancy Ovum said that 4G capability was the iPhone 5’s biggest selling point.

“Outside the hardcore loyal Apple fans, who will buy it anyway, the next biggest attraction of the device is its 4G capability,” he said.

“For those markets where it can be used on a 4G network, I think it’s going to do particularly well, and obviously one of those is the UK. So for Everything Everywhere, this is set to be a real winner.”

Even without 4G, the new iPhone will support the faster version of 3G, known as DC-HSDPA, with up to 42 megabit speeds – faster than many home Internet connections. Long-term evolution (LTE) technology, as the true 4G gear is dubbed, can offer up to 100 megabit speeds.

O2 Chief Executive Ronan Dunne said the iPhone 5 would remain popular on its network in Britain despite the lack of 4G. “The new device will work brilliantly on our network,” he said in an interview.

Hutchison’s 3 brand, Britain’s smallest operator, is in line to buy surplus spectrum from Everything Everywhere in the iPhone-compatible band, so it may eventually offer a faster service.

A spokesman for France Telecom also talked up the better speeds that customers of its Orange mobile brand would receive on the new iPhone in France and Spain, despite not having 4G.

However, operators have to be careful about how they advertise fast mobile broadband speeds on the iPhone to avoid breaking Apple’s strict rules on marketing, Ovum analyst Howett said.

Apple was fined roughly $2.3 million by an Australian court in June for misleading advertising of the iPad, which it said was 4G-compatible when it was not.

The iPhone 5 will go on sale in the United States, Britain, France, Germany, Australia, Canada, Hong Kong, Japan and Singapore on September 21, with pre-orders a week earlier. A further 22 countries, including 21 in Europe, will launch on September 28.

(Additional reporting by Tarmo Virki in Helsinki and Sinead Carew in New York; Editing by David Holmes and David Goodman)

Published: September 11, 2012

(Reuters) – Small business sentiment rose in August for the first time in four months as more owners anticipated better business conditions after the November 6 elections and increased sales.

The National Federation of Independent Business said on Tuesday its optimism index rose 1.7 points to 92.9 last month.

While owners expected an improvement in business conditions over the next six months, they still did not believe that this was a good time to expand operations.

“But looking past the election and year end, owners became a bit more optimistic about improvements in real sales volumes and business conditions,” the NFIB said in a statement.

There were gains in spending and hiring measures last month, with job creation plans doubling. The number of owners reporting job openings were hard to fill increased modestly.

Plans for capital outlays rose, but businesses continued to keep their inventories lean. The share of owners anticipating a rise in inflation-adjusted sales rose last month, snapping a five-month decline.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

(Reuters) – From the outskirts of Las Vegas to the coast of California, stretches of undeveloped land in some of the most depressed housing markets in the U.S. are in high demand.

Money managers such as BlackRock Inc, hedge fund Angelo Gordon & Co and real estate investment firm Starwood Capital, are beginning to cash-in on so-called shovel-ready residential land-tracts with most of the pre-construction and zoning approvals already in place.

The investors snapped up land on the cheap in bankruptcy proceedings, from cash-strapped home developers and banks that seized the properties after foreclosing on them when builders ran out of money.

Now they are re-selling the land, often for returns of more than 20 percent on their initial investment, in the latest sign of a modest recovery in the U.S. housing market. Other investors, meanwhile, are looking to partner with homebuilders to develop the tracts.

Some, like Paulson & Co, which has also been active in the space, will hold onto the land for sometime before re-selling it to buyers.

“We are coming out of the mother of all housing cycles, and residential land is the best way to play the ultimate recovery,” said Michael Barr, a Paulson & Co portfolio manager, who oversees the Paulson Real Estate Recovery fund, which has under $500 million in assets for the $19.5 billion hedge fund. “Land is the highest returning component of the home building equation.”

Single-family home sales in the U.S. rose 3.6 percent in July, matching a two-year high achieved in April. In July, applications for building permits hit the highest level since August 2008.

Foreclosures are also slowing in many regions. And, the market for existing single-family home rentals has gotten so hot that institutional investors are racing to raise money to buy foreclosed homes from the nation’s banks and then rent them out.

But shovel-ready land is a potentially more lucrative way to bet on a housing recovery – though investors may require a good deal of patience because it could take several years for developers to build new homes in some of the areas hit hardest during the financial crisis.

“These returns are back-end loaded, and more of an opportunistic, higher risk strategy,” said Dale Gruen, a senior portfolio manager for BlackRock Real Estate, which has raised a fund that invests in such lots. “Single family rental is one in which returns are a more moderate.”

Land that already has all the planning permissions required to begin construction is seen as a better bet than sites without all the boxes ticked because the process of gaining those approvals from local, state and federal agencies can take years, and is also a costly procedure.

Investors and real estate analysts do caution that a full-blown housing recovery is still some time off.

“The housing market is getting better but we’re not quite there yet,” said Stephen Malpezzi, an economist at housing data company Zillow and a professor at the University of Wisconsin’s Department of Real Estate and Urban Land Economics. “We all get excited when we see a few months of positive numbers, but we are still in the middle” of a fragile period for the housing sector, he said.

Still, Paulson’s Barr says it is only a matter of time before the market fully ripens. “We think there is going to be a land shortage coming out of the downturn.”

The Paulson real estate fund, which launched in 2010 and required investors to lock-up their money for 10 years, currently owns about 25,000 home sites in Florida, Arizona, Nevada, Colorado and California, all of which were acquired through some form of distressed sale.

Recently, Paulson, whose flagship fund has struggled mightily in the past two years, scooped up 875 acres of land in a resort development called Lake Las Vegas in Henderson, Nevada, for $17 million. Located about 30 miles from Las Vegas, the resort developer filed for bankruptcy in 2008. The acquisition adds about 3,500 home sites to Paulson’s real estate portfolio.

DIRT-CHEAP DIRT

The Paulson fund, whose founder John Paulson rose to fame and fortune by betting on the collapse of the subprime mortgage market, got into this market in 2010. Hillwood Development and Starwood got into the market even earlier. But new entrants are joining the hunt all the time given the ability to still buy land with development approval for as little as 30 cents on the dollar.

For instance, McRae Group of Companies, a Scottsdale Arizona-based real estate firm is pitching potential investors on a fund that will invest in such land projects in the Phoenix metro area, according to a marketing brochure.

BlackRock, which manages $3.56 trillion in assets, raised $120 million for a fund that invests in shovel-ready properties, buying up land in the San Francisco area, Orange County, Calif., West Palm Beach, Fla. and northern Virginia.

The fund, which finished making investments in June, is now in the process of selling assets back to homebuilders. A person familiar with the fund said the typical return on these types of properties ranges from 20 percent to 35 percent, depending on the strategy and market. Blackrock’s Gruen declined to comment on future investments, but a person familiar with the situation said the firm is considering raising money for a new fund.

There is a rebound in the market for shovel-ready land in the Las Vegas region, said Laus Abdo, executive director of Las Vegas-based TriArchic Advisors, a real estate investment and advisory firm. “Prices have gone from $20,000 a finished lot 18 months ago, to $30,000 – $45,000 per lot today in places like Las Vegas,” Abdo said.

Ross Perot Jr’s Dallas-based investment firm, Hillwood Development, is one early buyer of land now cashing in on its bet thanks to signs of a revival in housing markets in Nevada, California, Texas and Florida. During the recession, Hillwood bought shovel-ready land from cash strapped home builders.

In one instance, the firm purchased a portfolio of 8,700 undeveloped home lots in 2008, which has on average tripled in value.

Fred Balda, the president of Hillwood Communities, said its assets in Las Vegas have proven to be particularly profitable.

Balda said that the strategy overall has been “extremely successful”, but some portfolios, such as those containing land in Reno, Nevada, are still struggling, highlighting the local nature of the U.S. housing market and the uneven nature of the recovery.

Still, many national home builders are flexing their muscles again. Jeffrey Metzger, CEO of KB Home, said in June that the company is “aggressively reinvesting in new land assets and communities.” Similarly, Lennar said it spent $287 million on land and land development in the second quarter, up 74 percent from a year earlier.

The proof of that new building activity can be seen on the ground in places like Las Vegas as well.

Earlier this year, driving through new residential real estate developments in North-West Las Vegas in May, TriArchic’s Abdo pointed to rows of shiny new signs of all the major U.S. homebuilders, from Lennar to Beazer Homes and DR Horton. It’s evidence, he said, of a housing recovery starting to get its legs.

“The engine is cranking back up here in Vegas,” Abdo said.

(Reporting By Katya Wachtel; editing by Matthew Goldstein, Jennifer Ablan, Martin Howell and Bernard Orr)

(Reuters) – Plains Exploration & Production Co (PXP.N) is paying $5.55 billion for BP Plc’s (BP.L) stake in some deepwater Gulf of Mexico wells, a deal that boosts its power in the North American energy market and sharpens its focus on crude oil.

Shares of Plains, commonly known by the stock exchange symbol “PXP,” fell more than 8 percent, however, as investors were wary about the price of the deal and the $7 billion in debt that will fund it.

By buying such a large network of oil exploration rigs, Plains Exploration is effectively jumping into the energy industry big leagues with Anadarko Petroleum Corp (APC.N), Devon Energy Corp (DVN.N) and other large independent oil and natural gas producers.

The company was spun off from privately held Plains Resources Inc in 2002 and had previously focused much of its attention on oil drilling in Southern California.

Roughly two-thirds of PXP’s operations will now be in the Gulf, with one-third on land, and daily production will triple to 300,000 barrels of oil equivalent per day. The deal is part of the company’s strategy to focus less on natural gas, whose prices are at a decade low, and more on lucrative crude oil.

“This is not your brother’s Gulf of Mexico,” PXP Chief Executive James Flores told investors on a conference call. “This has very long life and we have a well-developed plan for the next eight years.”

The move helps BP shed smaller, older assets to focus on larger, newer wells that are more lucrative. It also helps the company reach its goal of raising $38 billion from asset sales to pay for damages from the massive 2010 oil spill in the Gulf of Mexico.

Eleven people died and 4.9 million barrels of oil spewed from the mile-deep (1.6 km-deep) Macondo oil well in by far the worst offshore U.S. oil spill.

DEBT LOAD

The deal pushes PXP’s debt load above the company’s roughly $5 billion market cap. Executives tried to assuage investors by outlining a plan to use cash flow in 2013 and 2014 to retire its borrowings.

The company will hold some of the $7 billion in debt as cash and is not issuing new stock.

PXP shares were down 8.1 percent at $37.06 on Monday morning on the New York Stock Exchange. In London, BP shares were up 0.9 percent at 438.8 pence.

The final price tag was “significantly higher than we expected,” RBC Capital Markets wrote in a research note. Last month the brokerage had estimated the assets to be worth about $2.2 billion.

TPH Energy Research said the deal was good news for BP as it looks to move beyond the 2010 oil spill.

“A reduced and more-focused exposure to the Gulf of Mexico is welcome for BP, we think, in the midst of recently escalated” legal action by the U.S. government against the company for the spill, TPH said in a research note.

The properties that Houston-based PXP is acquiring were producing an estimated 59,500 barrels of oil equivalent net per day at the end of July.

PXP is buying London-based BP’s 100 percent stake in the Marlin, Dorado, and King and Horn Mountain fields. It said it would also pay $560 million to acquire the remaining 50 percent working interest in the Holstein Field from Royal Dutch Shell Plc (RDSa.L).

PXP will also get BP’s 33.33 percent working interest in the Diana-Hoover Field, which is operated by ExxonMobil Corp (XOM.N), and BP’s 31 percent stake in the Ram Powell field, which is operated by Shell Offshore Inc.

The platforms at the wells are roughly 10 years old and have successfully weathered several storms, Flores said.

PXP plans to hedge up to 90 percent of oil production through 2015 to lock in current prices and guard against a drop from current levels of around $100 per barrel, executives said.

The company, which sold natural gas assets in Texas for $785 million last November, said it expected the BP deal to close by the end of the year.

A source told Reuters on Sunday that BP was in talks to sell some of its Gulf of Mexico oil fields to PXP.

(Reporting by Ernest Scheyder in New York and Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila, Lisa Von Ahn and Matthew Lewis)

By CHARLES E. CARRIER

As the economy continues to move forward, slowly and erratically, there are considerable opportunities involving the purchase and sale of distressed homes. These circumstances vary significantly across the country, which is why it is useful to understand the profile of the markets and the investors who operate in each city.

Dallas-Fort Worth represents a classic “investor” market, as opposed to a “speculator” market. The characteristics of the former, which are relevant for reviewing the real estate market in any given area, include: income and rental rates that align with property values; a moderate level of new residential construction, even during the real estate boom; a large, diverse and stable economy; and solid population growth and demographic trends.

Based on these criteria, a real estate agent or broker should be able to work with a core group of long-term, seasoned, local investors who act as a stabilizing force on the market.

In fact, many of the problems responsible for the collapse of the real estate market elsewhere — rampant speculation, easy access to credit, lack of financial oversight and a boom-to-bust mentality — are not as prevalent in the Dallas-Fort Worth area. Apply these factors to other cities, and you will quickly know the relative health of the real estate market in your city.

For sellers, this means that realistic exit strategies from otherwise tough situations continue to exist. For neighboring homeowners, this improves the likelihood of price recovery — thanks in part to the liquidity and property improvement enabled by the financial community.

Compare this approach to the dynamics in Southern California or Las Vegas. Rapidly increasing prices bring speculators and even less scrupulous actors to a market where the situation devolves into “buy/fix/flip.” The mentality is to get in and out quickly, before the bubble bursts.

As prices rise, there are no cash flow investors — rental rates are inconsistent with property values, and renting becomes only a way to minimize loss while holding a property for more price appreciation.

The ability to accurately evaluate property becomes difficult as traditional valuation techniques break down. Inevitably, inexperienced buyers and out-of-area money enter the market. Investors not familiar with the street-by-street, neighborhood-by-neighborhood variables of an area become more prevalent, and an already difficult situation worsens.

In this win-lose scenario, many people lose money, and sellers are left with few or no options. After the market crashes and bottoms, speculators come back into the picture and the cycle repeats itself.

One lesson we can learn from Dallas and apply to other locales, which is different than Los Angeles or Las Vegas or Phoenix (another city undergoing a severe bust), involves the type of investor who enters the marketplace. This point is significant because, when I counsel sellers and review market data, properties must meet certain criteria.

Listings need to satisfy the interests of seasoned experts who know how to deal with the reality of a challenging environment. For example, a purely speculative investor who relies more on emotion than analysis may not know the history of a neighborhood, the strength of the rental market, or the repairs needed to transform a neglected home into a profitable investment.

Remember, distressed homes in a distressed marketplace require a radically different mindset than the outlook for a traditionally functioning real estate market.

The surest way to understand pricing in a distressed marketplace is to invest capital and take a risk position on a property — this is the unique perspective that a veteran real estate agent, broker or investor offers. Which means you must analyze the evaluation of properties on both a “market comparable” basis, and also as a long-term cash flow investment. In higher-priced and more speculative markets, a different approach applies.

The renewal of distressed properties is a win for everyone. By turning these homes around, and through our efforts on the ground, neighborhoods improve and price stability returns.

Equally important, recycling these distressed properties into quality retail homes (and clean rentals) aids those owners who are currently underwater on their mortgages. Experienced local investors who have a stake in the long-term economic viability of a community are completely aligned with the interests of homeowners.

That’s a recipe for success.

Charles E. “Chas” Carrier is a principal of We Buy Ugly Houses Dallas, a HomeVestors of America Inc. franchisee.

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