Weekly Tech Business Recap: Microsoft Sets Lukewarm Tablet Expectations, LinkedIn Makeover
Facebook (NASDAQ:FB) shares start off hot Monday than cool off some, but are up more than 20 percent over June, compared with the 3 percent gain for the NASDAQ. A report that FB will introduce a jobs board might have ignited the latest rally. The new board will combine the listings from BranchOut and other third-party platforms; and according to JPMorgan and Topeka Capital the move is not a threat to LinkedIn (NYSE:LNKD), as both analyst groups say that user preferences should maintain separate personal and professional social networking profiles. At the same time, a Wall Street Journal article notes that a minimum of 160 mutual funds purchased Facebook shares in May, including some dividend and value funds.
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Samsung (SSNLF.PK) is said to be readying a release of a Windows RT tablet in October, which features a Qualcomm (NASDAQ:QCOM) Snapdragon CPU. Samsung’s endeavors might well give Qualcomm’s Windows aspirations a boost, while Hewlett-Packard (NYSE:HPQ) recently revealed that it would not release a Windows RT tablet, after earlier implying that it would release a model featuring a Snapdragon.
Disney’s (NYSE:DIS) ESPN will air more political ads this fall on several of its shows and also live sporting broadcasts, as part of a general pattern in which cable networks are more and more bringing in political dollars, as they promise reach of demographics which are easy to target. Meanwhile back in North Korea, several Disney characters that include Mickey Mouse and Winnie the Pooh, turned up in a video concert in Pyongyang that was attended by North Korean leader Kim Jong-un. It’s not the first time that Disney characters have broken through the 38th Parallel into the secret country, as they have been at times imported from China (by The Dear Leader?), but such an in-your-face performance at the highest level comes as a surprise.
Western retailers cut back their orders for products from China for this year’s rapidly approaching ‘holiday season’, which serves as an early sign that giants such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) are forecasting a moderate season. The retailers typically order the large portion of their imported products in summer, in order to have them ready for shelves by late October.
Another part of historic retailer J.C. Penney’s (NYSE:JCP) remake, is targeting the estimated 16 million gay and lesbian consumers who are usually not acknowledged in mainstream advertising campaigns. Penney’s has recruited Ellen DeGeneres as its spokesperson, and has also taken the brave step of featuring same-sex couples in recent mailers. However, this segment of the population is estimated by some to earn almost double the income of the national average, and JCP wants to win them over. Should Abercrombie & Fitch (NYSE:ANF) be worried?
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Samsung (SSNLF.PK) might have won a patent dispute against Apple (NASDAQ:AAPL), but the reason might have been more damaging than losing the case. United Kingdom Judge Colin Birss ruled that the design of Samsung’s Galaxy tablets does not infringe on the iPad’s design, because consumers are not apt to confuse the two, as the Galaxy tablets “do not have the same understated and extreme simplicity which is possessed by the Apple design… They are not as cool.” Is it possible to appeal a successful ruling?
Research In Motion (NASDAQ:RIMM) will divest itself of one of its two business jets, as part of a plan to save $1 billion in operating costs, according to sources. Although the jet’s sale will likely produce only $6 million to 7 million, the fact that RIM will go through this shows the magnitude of pressure on the firm to do something, anything, to force change. Also on Tuesday, all of the company’s board members were re-elected at its shareholders’ meeting.
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David Einhorn commented on two tech giants on CNBC: On Amazon (NASDAQ:AMZN) he said that “It’s very hard to compete against someone who doesn’t feel compelled to make a profit”; and that Apple shares are substantially undervalued and headed for a $1 trillion market cap.
Microsoft (NASDAQ:MSFT) intends to sell a “few million” Surface tablets in 2013, reports Steve Ballmer, who adds that the tablets will be sold online and in the firm’s few retail stores. This strategy might be to avoid competition with original equipment manufacturers, but at the same time could limit sales; Apple sold 11.8 million iPads in the first quarter, as a frame of reference. In addition, it’s being said that Microsoft is experiencing yield problems with Surface’s case.
McDonald’s (NYSE:MCD) is forecast to post improved global same-store sales for June, along with a dramatic improvement in Japan that is likely headline the report.
American Airlines (AAMRQ.PK) is said to be set to increase merger talks in the coming weeks, and will begin the process by dispatching non-disclosure agreements to selected carriers and private equity firms, according to a Wall Street Journal report. Companies that might possibly become involved include Delta Air Lines (NYSE:DAL), United Continental (NYSE:UAL). and US Airways (NYSE:LCC).
It’s believed that tech firms’ overseas cash comprises about half of an estimated $457 billion held in that form by U.S. companies. It should come as no surprise that Apple’s (NASDAQ:AAPL) overseas balance of $74 billion (as of the March quarter) tops that of all tech firms, and Moody’s estimates that the current amount was reached by a 15 percent increase during that quarter alone. The Top Five, other than Apple, are Microsoft (NASDAQ:MSFT) with $50 billion, Cisco (NASDAQ:CSCO) with $42.3 billion, Oracle (NASDAQ:ORCL) $25.1 billion, and Qualcomm (NASDAQ:QCOM) with a relatively paltry $16.5 billion. Attempts to obtain a “tax holiday” on the repatriation of overseas cash have so far not been realized.
Sprint (NYSE:S) is joining with Computer Sciences (NYSE:CSC) to provide a cloud infrastructure solution that will spotlight Sprint’s Complete Collaboration IP communications solution. This new service will depend upon Sprint’s wireline network, and an intro in the second half is planned.
LinkedIn’s (NYSE:LNKD) usage rate lags that of users of Twitter and Facebook, even though it claims more than 160 million registered users. But looming is the former’s first major remake in many years, LNKD hopes that the sign re-design will help to eliminate the deficit. New features will prompt users to check news content, message contacts and post their status updates.
Shares of Youku.com (NYSE:YOKU) and Tudou (NASDAQ:TUDO) drop in tandem following word that Tudou COO Evelyn Wang has stepped down, purportedly to “pursue personal development opportunities elsewhere.” However, Tudou declares that the resignation will not impact its planned merger with Youku, through which a Chinese online video giant might be created.
Again we have new rumors concerning an Amazon (NASDAQ:AMZN) smartphone, now with the Wall Street Journal saying that the firm is testing a device with a 4-5 inch screen with Asian component providers. It’s also rumored that mass production could commence by late 2012.
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Up until now Pandora’s (NYSE:P) service has only been available to U.S. users, but the company has initiated trial services in Australia and New Zealand. For the time being, the trials are available to PC users only, and feature no ads. This move coincides with Facebook (NASDAQ:FB) boosting own its endeavors to act as a music hub by launching revamped artists’ pages that feature deeper Spotify integration, as well as other things going on.
Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) reach an agreement to stay 3 patent lawsuits until the matter of Google’s ‘Fair, Reasonable and Non-Discrimatory’, or FRAND, licensing obligations for standards-essential patents is settled; such a trial won’t start until mid-November, and appeals could take up months. This stay doesn’t pertain to Microsoft and Google’s ITC squabbles, which have resulted in Android and Xbox bans abounding. For its part, Congress has just begun to evaluate FRAND obligations.
Nokia’s (NYSE:NOK) patent infringement suit against Research In Motion (NASDAQ:RIMM), which was initiated in May, got three patents larger Thursday, as the former sticks it to the latter. Just as several of the patents used in Apple and Microsoft’s infringement lawsuits, Nokia’s IP covers basic software “inventions” such as updating software via a mobile connection and storing/transferring multimedia tags. Nokia says that it’s open to divesting some of its patents, but at the same time it has become more assertive in attempts to monetize its IP.
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Small-cap Neonode (NEON) reaches a licensing deal, throgh which Alpine Electronics may embed Neononde’s MultiSensing touch and gesture-control tech into Alpine’s infotainment systems for vehicles.
Amazon (NASDAQ:AMZN) has recruited Windows Phone (NASDAQ:MSFT) business development executive Robert Williams to be the newest director of its Appstore for Android. Five months ago Amazon hired another Windows Phone executive, and this move occurs at a time when rumors are flying concerning a smartphone intro. The Windows Phone business, along with Microsoft’s online ad division, has been the place for several executive departures.
Yahoo (NASDAQ:YHOO) Voices, which runs on the Internet portal’s instant messaging service and is powered by Telefonica (NYSE:TEF) division JaJah, is now the most recent hacking victim, as the until now unknown D33DS Company published the details of 450,000 user accounts and passwords from the former. But not to worry – the hackers say that the breach was only intended as a “wake-up call and not as a threat”, so all must be well. Somewhat separately, the well-connected Kara Swisher says that Ross Levinsohn might not be named Yahoo’s permanent CEO for several more weeks, because the newer board members are reportedly “committed to a more thorough vetting process” on account of past mistakes (college transcripts come to mind). However, a postponement could be a serious error, as Levinsohn is said to have been offered jobs at top media companies, including Comcast.
VirnetX (AMEX:VHC) shares jump, following word that it resolves its patent infringement dispute with Mitel (NASDAQ:MITL). Under the terms, VirnetX receives a one-time licensing fee, plus future royalties on sales of Mitel’s enterprise IP communications hardware. This arrangement is similar to a licensing deal with Aastra in May, but VirnetX remains locked in disputes with Apple, Cisco, and NEC.
Valence Technology (NASDAQ:VLNC) seeks for Chapter 11 protection, as the developer of lithium-ion batteries for vehicles and other high-power equipment, had already revealed board resignations and a delisting notice on Wednesday afternoon.
Nokia (NYSE:NOK) will shut down two of its distribution centers in China as part of its overall restructuring plan, and will subsequently unify operations at its two remaining centers in China. Meanwhile, Pierre Ferragu at Bernstein sharply cuts his price target for the firm from $2.63 to $1.56, while predicting a 38 cents per share loss for the year. He also believes that feature phone demand is drying up as Android phones become less expensive.
The Justice Department is delaying Verizon Wireless’ (VZ, VOD) reseller arrangements with cable providers on broadband pricing, due to worries concerning the impact. The Federal Communications Commission is ready to okay the deals, but Justice antitrust officials are concerned that the reseller arrangements amount to non competition agreements which will restrict consumer broadband options, especially in areas where Verizon’s FiOS service isn’t offered.
Technology major Cisco (NASDAQ:CSCO) gets an estimate cut from Shaw WU at Sterne Agee, as the analyst claims that checks indicate that sales cycles are lengthening and deal sizes are shrinking. It’s no surprise that Europe remains the most problematic region. However, Wu remarks that the problems are industry-wide, and Cisco is in reality gaining share.
Google (NASDAQ:GOOG) CEO Larry Page is recovering from the health event which caused him to lose his voice, reports chairman Eric Schmidt. The still unidentified illness, which caused Page to miss Google I/O and his company’s second call earnings call, has many observers and others quite worried; the firm’s reluctance to give specific details has not exactly helped.
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