Week in Review: Key Tech Stock Insights
Wall Street finished its best performing week of the year. The Nasdaq Composite, a solid gauge of the health of tech companies, rose 4% over the course of the trading week (June 4th to 8th). Here’s a breakdown of insightful news to catch up on now:
Shares of Sony (NYSE:SNE) fell below ¥1,000 for the first time since 1980 in Tokyo trading Monday, dropping as much as 2.3 percent to ¥990 before coming back a bit. The firm has reported four consecutive yearly losses, dramatically affirming shareholders’ worries about weak earnings, says Takashi Watanabe at Goldman.
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Awww… Facebook (NASDAQ:FB) and Yahoo (NASDAQ:YHOO) are said by AllThingsD to be in discussions to get back together, that is, resolve their patent disputes, so their once close relationship might be rekindled. Significant cross-licensing of intellectual properties and deeper integration between the companies might be in the offing, if such a deal has any chance. However, reality is that FB is not anxious to cough up a large amount of cash, following its you-know-what, and its shares fell below $27 for a while on Monday. Indeed, the shares are initiated at Underperform, with a price target of $25, at Bernstein, which implies that it might be some time before investors regain their confidence over FB’s ability to cahs in on its present assets and those coming from future opportunities.
Sales checks made by James Faucette of Pac Crest confirm that Nokia’s (NYSE:NOK) Lumia phones continue to sell well, and it’s thought that both the Lumia 900 and 600 are doing well domestically, with Euro sales increasing month-to-month in May. However, more bad news for Research In Motion (NASDAQ:RIMM), as that firm is believed to have seen yet another month of slumping sales, which caused its channel inventory to rise for 6 to 8 weeks. Monday’s selloff of the latter’s shares to the single digits, might have to do with that news.
The release of iOS 6, will mark the inclusion of Apple’s (NASDAQ:AAPL) Siri in the iPad, says 9to5 Mac. Also reported, is that Apple is beta-testing Siri on both the latest iPad and the iPad 2, although it will probably be available only on the former. It’s believed that both Nuance (NASDAQ:NUAN) and Yelp (NYSE:YELP) would benefit from the debut of Siri on iPad.
Google (NASDAQ:GOOG) is prepping the intro of a new small business marketing solution that leverages Google+, Offers, Wallet, and other products. This move represents the company’s intentions to expand its share of the more that $21 billion market for local digital ad spending, plus improved revenues from the 20% percent of searches that are for local information. Groupon (NASDAQ:GRPN), Facebook, and Yelp stand to lose market shares from the Google move, as well as social media marketing firms such as Bazaarvoice (BV) and Constant Contact (NASDAQ:CTCT).
Microsoft’s (NASDAQ:MSFT) live blog presentation at the E3 convention contains much Xbox-related news, as the company attempts to reinforce the device’s position as a home entertainment center. A few highlights include an Xbox-optimized version of Internet Explorer; the Smart Glass tablet app, which enables users to see material related to the Xbox video and gaming; and the Xbox Music service, which will also run on Windows 8 and Windows Phone.
Microsoft (NASDAQ:MSFT) launches a pilot program, in which it will offer subscriptions to Xbox at Best Buy (NYSE:BBY) stores and selected GameStop (NYSE:GME) outlets, at the same $99 pricing plan available in its own stores. From this, it can be gathered that MSFT is increasing its stake in adapting the subscription-based model, where it will make up subsidized up-front hardware costs in the long term.
Groupon (NASDAQ:GRPN) shares are rebounding Tuesday following an upbeat appraisal by Benchmark, in which it was contended that the firm’s recent successes in cutting the growth of its spending on marketing, can continue at least for now. Also mentioned was Groupon’s too-low valuation on an earnings before taxes, interest and depreciation basis, and also that worries of worsening deal terms and margins are unfounded due to its scale and brand.
Can Harry Potter save Sony (NYSE:SNE)? The firm hopes that a partnering with J.K. Rowling, in which an interactive title called “Book of Spells” for Sony’s new “Wonderbook” accessory will be created, will do the magic. Sony’s PlayStation 3 Move motion controller will enable readers to ‘cast spells’ similar to those used by the Rowling super character.
Apple’s (NASDAQ:AAPL) renewed request for a ban on U.S. sales of Samsung’s (SSNLF.PK) Galaxy Tab 10.1 has been denied by a United States district judge, as the case remains before a Federal court of appeals. The company’s initial request in December was denied as well.
Intel (NASDAQ:INTC) reports agreements with touch panel vendors Cando, HannsTouch, TPK, and Wintek, while PC original equipment manufacturers unveil huge amounts of Windows 8 (NASDAQ:MSFT) hardware at Taiwan’s Computex. These deals should guarantee adequate supplies of ultrabook touch panels over the next 12 months, and as with Intel’s other ultrabook stakes, the firm’s goals are reducing its dependence on the MacBook Air, and also meeting the challenge posed by ARM-based (NASDAQ:ARMH) systems.
Cisco (NASDAQ:CSCO) introduces its ASR 5500 edge router, which of all ASR models is solely built specifically with mobile networks in mind. The company claims that the router features several mobile-specific policy and protocol components, and has already been adopted by both Verizon and India’s Bharti Airtel. In addition, the new product should profit from soaring mobile data traffic, while rival Juniper (NYSE:JNPR) is also targeting the mobile infrastructure market through Project Falcon.
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Panasonic (NYSE:PC) is working on the details of a move that would dramatically enlarge its position in shares of Olympus (OCPNY.PK), says the Kyodo news agency. A cash injection of ¥50 billion ($635 million) is planned, which would make Panasonic Olympus’ top shareholder.
Pandora’s (NYSE:P) impressive May audience metrics cause its shares to move up. The total of listener hours reached 1.1 billion, which represents a 4 percent rise month-to-month, and 87 percent year-to-year (the same as for April). The U.S. radio listening share was 5.80 percent, which was up over 2011’s 3.08 percent, but down slightly from April’s 5.95 percent. Also, the number of active listeners was 53.3 million at the end of May, which is up 3 percent month-to-month, and also up 52 percent year-to-year. Separately, Pandora has reached a distribution arrangement with Mazda.
Facebook (NASDAQ:FB) shares get a break, perhaps due to JMP’s Mark Harding beginning coverage with Outperform and setting his target price at $37. Pointing out FB’s potential for monetization, Harding is valuing the company at 54 times his 2013 estimate for earnings per share. In addition, he projects that FB’s market share of display ads will rise by 22 percent in 2015 from the 11 percent it garnered last year, and growth for the market itself, as increasing amounts of spending for offline ads moves online.
Could the fabled Apple (NASDAQ:AAPL) TV be announced next week at the developer conference? Maybe, says Jefferies’ Peter Misek, as his checks, including a Chinese report, reveal that Foxconn has begun the production of an iTV, which should be available in the second half. Misek also thinks that the iTV is being evaluated by pay-TV providers, such as AT&T (NYSE:T), Bell (BCE, Deutsche Telekom (DTEGY.PK), France Telecom (NYSE:FTE), Rogers (NYSE:RCI), and Verizon (NYSE:VZ).
Google (NASDAQ:GOOG) announces a substantial refurbishment to Google Maps and Google Earth. Updates features include an intensified 3D imagery, offline caching for mobile versions of Maps, and off-road Street View support. The improvements might have to so with Apple reportedly getting ready to replace Google Maps on iOS with an inside solution that provides 3D imagery and other tech derived from startups. Observers noted that an iPad was used in Google’s demonstration.
Shares of LinkedIn (NYSE:LNKD) slip a tiny bit on the news that passwords for 6.5 million of its 161 million plus accounts had been stolen. The theft was somewhat confirmed by a United Kingdom company firm, users are recommended to change their passwords, as LinkedIn looks into the matter.
You’ve got it all wrong! Panasonic (NYSE:PC) assertively states that it has no intentions of investing in Olympus (OCPNY.PK), despite a media report Wednesday which suggested that Panasonic was getting ready to make a stake of up to $635 million.
EU Competition Commissioner Joaquin Almunia reports that Google (NASDAQ:GOOG) has thus far made no concessions for the purpose of assuaging worries that it has abused its dominance of that market. No comment was made on rumors that Almunia gave Google a July 2nd deadline, but if the firm doesn’t satisfy the EU it could receive formal charges, and that could constrain its negotiating position.
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While Research In Motion (NASDAQ:RIMM) might be pinning its hopes on its new Blackberry, the device will be made up of a hodgepodge of technologies which have been purchased or licensed including the camera, touchscreen, and the operating system. The strategy is altogether new for RIM and one analyst comments that, “It’s almost too many things to integrate at the same time”. Meanwhile, the firm has ceased production of its smallest-capacity 16 gigabytes PlayBook tablet, so as to concentrate on the 32 gigabyte and 64 gigabyte models, while it experiences overall unimpressive sales and a $485 million inventory charge for the line in December. However, it’s expected that RIM will “remain committed to the tablet space”.
Juniper Networks’ (NYSE:JNPR) current product lines and those in its pipeline will be insufficient to assuage profit erosion and a slowing growth path, says Alex Henderson at Needham. Accordingly, the analyst awards the firm a stiff downgrade, which causes shares to go tumbling.
Three weeks after its now legendary IPO, Facebook (NASDAQ:FB) introduces App Center, which is an online directory of downloadable apps, said to be not unlike those of Apple and Google. Through this move, FB is seeking to attract additional software developers, and also enabling its users a better way to find apps on the site.
Microsoft’s (NASDAQ:MSFT) Azure unit is in the news Friday, as chatter has it that the firm will award its business to computer hardware manufacturer OCZ Tech (NASDAQ:OCZ), which shares duly popped at the idea. Sources suggest that OCZ solid state drives are among the features added to Azure’s new storage hardware. Meanwhile, MSFT’s Azure cloud storage team says that it’s cutting prices by 90 percent, down to one cent per 100,000 transactions, plus adding new features. Chris Mellor characterizes the move as “Taking the fight right to Amazon (NASDAQ:AMZN)”.
Logitech (NASDAQ:LOGI) announces that it’s laying off 450 employees, which comprises 13 percent of its “non-direct-labor workforce”. The move comes as a part of its restructuring program that was announced earlier, and which is expected to save the firm 80 million yearly in operating costs.
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Apple (NASDAQ:AAPL) and Motorola Mobility’s (NASDAQ:GOOG) patent litigation trial that was scheduled to start on Monday won’t happen, as Federal judge Richard Posner tentatively dismissed the case, saying that neither party was able to “establish a right of relief” for the alleged violations. The judge might yet change his mind when he issues a longer opinion, within a week. In another Apple patent dispute, the firm’s attorney reports that it might seek a legal order as early as Friday, to prevent Samsung (SSNLF.PK) from launching its Galaxy S III smartphone in the United States later in June, says Reuters. For its part, Samsung maintains that the launch and sales of the new device is still on ‘go’.
Shares of Enterprise software developer QAD Inc. (NASDAQ:QADA) cratered and quickly rebounded Friday, following word that it purchased DynaSys S.A. (based in Strasbourg), for approximately $7.5 million. The acquiree is a developer of supply chain planning software solutions.
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