Weekly Tech Biz Wrap: Samsung Sees Bright Future For Galaxy, Facebook Faces New Ratings
Samsung (SSNLF.PK) predicts that sales of its new Galaxy S III smartphone will exceed 10 million units during July, which would place it in the position of Samsung’s fastest-selling device of its kind. Additionally, the firm is forecasting that second quarter earnings from its handset business will beat the first quarter earnings, in the face of market worries that constraints on Galaxy supplies, plus a struggling world market will impact Samsung’s profitability.
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Yahoo (NASDAQ:YHOO) interim CEO Ross Levinsohn could be hoping to drop the word ‘interim’ from his title, as he employs the strategy of reconcentrating his firm on increasing its $5 billion online-ad business, along with plans to link more ads to major events such as the Super Bowl. Yahoo’s more recent tack of generating more e-commerce revenue might be being rethought as Levinsohn pushes the new twist.
Google’s (NASDAQ:GOOG) Nexus tablet, which is expected to be revealed this week at Google I/O, will feature an Nvidia (NASDAQ:NVDA) Tegra 3 processor, plus a 7-inch display, says Gizmodo. Further, an 8 gigabyte version of the tablet, which will be marketed as Nexus 7, will retail for $199, with a 16 gigabyte version for $249. These prices might not be sufficient, however, to ward off competition from the iPad, the Kindle Fire, and the looming Microsoft Surface.
As if Nokia (NYSE:NOK), and now Alcatel-Lucent (NYSE:ALU) needed more troubles, their shares have gone over the cliff Tuesday as investors fear that the debt fiasco in Europe will not allow the two cash hemorrhaging companies to raise more desperately needed capital. Speculation that Nokia, which is visiting levels not seen since 1996, might have its Windows Phone partner acquired by Microsoft (NASDAQ:MSFT), is on-again, off-again, as an executive of the latter comments that his company ‘has no interest in making its own phones’.
Yelp (NYSE:YELP) shares slump then rebound on Tuesday, as materials distributed by Apple (NASDAQ:AAPL) to iOS developers indicate that its new mapping solution will include the ability for users to “check in” to its site at restaurants and other places that pertain. Yelp is already tightly joined with Apple’s Siri, all of which is good news for its stocks today.
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Rivals Cree (NASDAQ:CREE) and SemiLEDs (NASDAQ:LEDS) resolve their patent infringement lawsuits against each other, but the settlement is heavily in Cree’s favor. The latter firm submits to an injunction, effective October 1st, that disallows the U.S. import and sale of its products that are deemed by Cree to be infringing on its patents, and in addition, SemiLED has “made a one-time payment to Cree for past damages”.
Nokia (NYSE:NOK), for once, gets breathtakingly good news, as The Verge’s review of its 808 PureView phone was quite positive, as the publication calls the device’s camera, replete with a 41MP sensor, to be “astounding, breathtaking, stupefying”, adding that, “this phone’s image quality is so far ahead of the competition that it really has no competition.”. Otherwise… the analyst says that the 808 runs Symbian, and has a mediocre display. However the glowing review of the camera could stand it in good stead for upcoming Windows Phone (NASDAQ:MSFT) devices that are likely to contain PureView technology.
It’s also a good news day for Facebook (NASDAQ:FB) as its shares are currently up 30 percent over their June 6th low, and down no worse that 13 percent from their $38 IPO price. IPO underwriters begin coverage on Wednesday, chatter has it, that the Street is readying for a long line of bullish reports.
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Motorola’s (NYSE:MMI) Droid RAZR MAXX outsold the iPhone at Verizon Wireless in June, due to Big Red’s endeavors to promote 4 gigabyte device sales, says Anil Doradia at William Blair, adding that the next iPhone (NASDAQ:AAPL) is also expected to support 4 gigabytes. On the other hand, a T-Mobile (DTEGY.PK) executive is said to told employees that the struggling company won’t receive the iPhone in 2012.
As usual, it’s perfect timing (not!) for Research In Motion (NASDAQ:RIMM), as yet more negative commentary arises just ahead of its fiscal first quarter report on Thursday. Another analyst, this time Wedge Partners, doesn’t believe that RIM will find a buyer in the near term, especially in the present environment, in which enterprises are taking to the iPhone en masse; and also is dubious that BlackBerry10 has any chance at competing with its three major rivals. Sterne Agee is chiming in, slashing its estimates for basically the same reasons, and thinks that the second fiscal quarter BlackBerry shipments could slide below 7 million.
Vodafone (NASDAQ:VOD) is said to have avoided paying around £1 billion in U.K. taxes over the past decade, while its revenues have soared, reports a Reuters investigation. The inquiry finds that inter-company loans, of which the interest payments are tax deductible, were among the ways in which the firm reduced its profits in Britain.
Nokia (NYSE:NOK) CEO Stephen Elop says that rumors that Microsoft (NASDAQ:MSFT) intends to produce its own smartphone, are unfounded, commenting to the Finish newspaper Kaleva that the other firm has “made a clear decision with Nokia”. Microsoft executive Greg Sullivan also denied the speculation, in an interview with Information Week.
Shares of Unisys (NYSE:UIS) soar following word that the firm has received a services contract from the Department of Homeland Security, with a potential value of $3 billion, over as many as 5 years. The contract includes a 2-year base period plus three one-year options exercisable by the Department.
News revealed at the Google (NASDAQ:GOOG) I/O later in the day includes the intro of Project Glass – the first glasses will be priced at $1,500, to be shipped in 2013; word that the Nexus Q can be controlled by Android devices, employs a Texas Instruments (NYSE:TXN) OMAP processor, but doesn’t so far support Netflix or Hulu; and that Google+ currently boasts 150 million monthly users and 75 million daily users.
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Samsung (SSNLF.PK) was enjoined on Tuesday from producing or selling its Galaxy Tab 10.1, as a California judge issued a temporary ruling to that effect, saying that Apple (NASDAQ:AAPL) had made the stronger case Tab’s design violates its patents. Analysts are so far underplaying the ruling, commenting that it’s not likely to have a significant affect on Samsung; the trial is scheduled for July 30th. Meanwhile, the USPTO has granted Apple 28 new patents, which includes one that covers a solution for a wireless charging dock for handheld devices, and another that escribes a means for reducing interference when a device is docked.
Wednesday is payback time for Facebook, (NASDAQ:FB), as the investment banks that participated in its infamous IPO have now survived the mandated 40-day waiting period before they could publish an opinion. Accordingly they are not being bashful, as they present the company with their ratings, which at the first blush actually ran more towards Outperform, than lower alternatives. But there is a ‘however’ on the way, and it’s that investors were disappointed that FB didn’t get all straight As, and shares have now fallen on the day. For example, Morgan Stanley gave the stock an Outperform, but its price target of $38 was of course the IPO price. The worst comment – so far – was from BMO who reported that its checks with agencies showed “mixed opinions” about Facebook ads, and remarked further that ad pricing power is required to justify FBs valuation, since user growth is declining, which could be difficult as industry-wide growth shrinks.
Alcatel-Lucent (NYSE:ALU), a pioneer in the small cell market, stands to gain from the travails of the Telefonica-owned (NYSE:TEF) United Kingdom carrier O2, which reports that parts of its network will run out of capacity by 2014 or 2015, due to rapidly increasing mobile data traffic, and will thus need to adopt “small cell” base stations in response. ALU just happens to have a supply agreement with Telefonica.
Amazon (NASDAQ:AMZN) is said to be readying the intro of tools that will facilitate developers, as they add social features to games for the Kindle Fire. Inside sources believe that the e-commerce major is attempting to shrink other firms’ tablet leads.
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Vodafone (NASDAQ:VOD) is currently reshaping its European operations into two groups: Northern and Central Europe, and Southern Europe. The CEO of the north central division will be Philipp Humm (ex-T-Mobile USA), and heading the southern group will be Paolo Bertoluzzo, who will also remain CEO of Vodafone Italy.
AOL (NYSE:AOL) shares spike then fall back, following word of its anticipated stock repurchase, which will be payed for with proceeds its $1.056 billion Microsoft patent windfall. The transactions will be in the form of a $400 million Dutch auction tender offer, that operates in a price range between $27 and $30, which will be valid through August 2. AOL sya that the move is only the first step in the process of returning all of the patent gains to its shareholders.
Apple (NASDAQ:AAPL) is said to be poised for a major reconfiguration of its iTunes music/video store. Nuances will likely include tighter iCloud, Facebook, and Twitter integration, better management of file, and the ability to listen to songs shared by friends for free, through new studio agreements. Also reported is that music studios are pressuring the company to offer a Spotify-like subscription service, but that is going nowhere so far.
Facebook (NASDAQ:FB) shares took a beating Thursday, the day after its IPO underwriters were allowed to weigh in (which they did!). However, Henry Blodget is under the impression that FB has “completely sandbagged” its second quarter estimates, and is thus set up for a beat. Before Wednesday’s praising and scoldings, the company’s Facebook’s consensus second quarter earnings estimate stood at 15 cents, but dropped to 12 cents after the underwriters’ average projections of 10 cents were made known. However, some say that Facebook did this to itself, by reportedly leaking guidance to certain select analysts.
Nokia (NYSE:NOK) shares slide towards a 16-year low, as the firm’s newly appointed chair Risto Siilasmaa says that the embattled CEO Stephen Elop has the board’s full confidence, according to the Finnish paper Helsingin Sanomat. Elop was defended in May by ex-chairman Jorma Ollila.
Analysts get their crack at Google’s (NASDAQ:GOOG) Nexus 7 tablet, and are not exactly heaping praise on the product. Credit Suisse believes that the Nexus 7′s window of sales is limited if an iPad Mini is looming. Needham opines that slumping demand for Kindle Fire is not a good omen for the Nexus, and Sterne Agee argues that Microsoft is more at risk than is Apple. The Verge comments that the 7′s international availability could be the crux, as Kindle Fire is available only domestically. AnandTech, however gave a positive review of the 7′s hardware
Microsoft (NASDAQ:MSFT) has huge plans for its recently-announced Xbox Music service, says a Bloomberg report. Steve Ballmer & Co. intends to offer both a Spotify-like subscription streaming service, and iTunes-type downloads and cloud storage, while providing access through the Xbox, PCs, and Windows Phone devices. Talks with music studios, however, are said to be only in preliminary stages.
Struggling Research In Motion (NASDAQ:RIMM) was approached by Microsoft (NASDAQ:MSFT) CEO Steve Ballmer within the past few months, over the possibility that the Windows Phone might adopt the operating system used by the BlackBerry, according to Reuters, adding that Microsoft might make an investment in RIM. Problem is, RIM doesn’t want to lose its independence, even though analysts now believe that its very survival is at stake, after its fiscal first quarter losses. For example, Mike Walkley at Canaccord suspects that the firm now has a negative gross margin, and he forecasts that a sale will eventually occur. Bank of America is considerably more negative, downgrading RIM to Underperform, as it says that “the risk of total value destruction” is possible.
Facebook (NASDAQ:FB) shares move down a bit Friday, as Ben Schachter at Macquarie’s begins coverage with a Neutral and price target of $34. The analyst is not alone in observing the ominous gap between Facebook’s large share of web usage and its notably smaller share of online ad expenditure. Further, Schachter remarks that FB’s “pace of innovation and execution are unclear,” and is also dubious regarding the firm’s ability to meet near-term Street estimates. On the other hand, Facebook’s legendary IPO didn’t seem to stunt demand for enterprise software offerings: ServiceNow (NYSE:NOW) priced its own initial public offering of 11.65 million shares at $18, which exceeded the prior range between $15 and $17, opened at $23.75, and traded late afternoon Friday higher than that. Factors driving the jump could be that the firm’s cloud solutions have been gaining share in the systems management software market, and also the bidding war for its peer Quest Software.
Mobile industry veteran Scott T. Ford has been added to AT&T’s (NYSE:T) board. Ford currently serves as partner at money manager Westrock Capital, and was previously CEO of the rural carrier Alltel until its 2009 buyout by Verizon .
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Nokia (NYSE:NOK) shares are getting left out on a day when many European tech stocks are taking off. The most likely reason is unlucky NOK’s link with the even more unfortunate Research In Motion (NASDAQ:RIMM) and its – how can we put it? – fiasco. Investors are uneasy regarding demand for low-end to mid-range phones, and also the future of any mobile original equipment manufacturer that is not tied to iOS or Android. However, all is not grim: Flickr is joining Microsoft in the adoption of Nokia Maps.
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Digitimes tablet chatter includes word that Google (NASDAQ:GOOG) will follow up on the intro of the Nexus 7 tablet, by presenting a 10″ model that uses touch panels from AU Optronics and Wintek. Also speculated is that a Chinese-language site claims that Apple (NASDAQ:AAPL) will launch a new 9.7″ iPad this summer that will be thinner and boast better battery life than the latest iPad.
Amazon (NASDAQ:AMZN) is said to be developing a 10″ model of Kindle Fire that will accompany the likely summer refresh of its 7″ model, according to a BGR report. In addition, it’s being forecast that the build quality for the new models should be “vastly improved” from the current version, with metal casing being used instead of plastic.
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