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Does Qualcomm Need Apple?
June 30, 2016 by admin
Filed under Computing, Smartphones
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The fanboys aka the Apple Press has been running down Qualcomm since its favourite company announced it was buying chips from Intel, but there are good reasons why the American chipmaker should not care that much.
As we have been saying for ages, Jobs’ Mob is no longer exclusively going with Qualcomm to provide modem chips for the upcoming iPhone 7. The deal, while large, is tailored for some of Apple’s partnerships. Intel gets AT&T phones and Qualcomm remains the supplier for Verizon network phones and for China.
The press has been claiming that it is terrible news for Qualcomm. But it appears Qualcomm knew it was coming and had already factored in the loss of the business into its results. The reason Qualcomm is not losing any sleep over the deal is because the most Intel is going to get is a third of the iPhone modems. This is what in financial terms is considered a “pisser” but hardly a reason to jump off any buildings over.
Other good things are happening to Qualcomm which more than balance out what has been lost to Intel. Firstly its latest Snapdragons are selling extremely well and secondly the shine is starting to go off its number one rival MediaTek.
For a while, naysayers have been predicting that MediaTek was going to sink Qualcomm. In fact there was even a suggestion that Qualcomm should get out of chipmaking and become a patent troll.
MediaTek had been luring away Qualcomm customers with cheaper chips, which combined with Apple, Samsung and Huawei making their own chips was creating a perfect storm of doom.
Now there is a suggestion that MediaTek’s growth wagon might have stalled. MediaTek’s sales fell 9.4 per cent annually last quarter to $1.7 billion. Its operating margin halved from 16 per cent last year to eight per cent. The reason was due to higher expenses across the board. This meant that its net income fell to $136 million. MediaTek is still more profitable than Qualcomm’s chipmaking division has a wafer thin 5 per cent last quarter.
Analysts expect MediaTek to post double-digit sales growth fuelled by rising demand for 4G smartphone chips in China. But its margins are also expected to keep contracting due to tough competition from Qualcomm and Spreadtrum.
Another risk for MediaTek is its dependence on China. Taiwan just got rid of the pro-unification KMT party, which controlled the presidency for the past eight years, in favour of the pro-independence DPP party.
MediaTek needs direct investments from mainland China to fight off Qualcomm, but it is finding that the Taiwanese government is blocking that sort of investment cash.
All this is giving Qualcomm a fighting chance in the area where it makes a lot of its cash. Sure its margins might be lower, but it still making more money. Enough so that it does not have to worry about losing a small about of dosh to Intel.
Courtesy-Fud
Cisco Files Suit Against Rivals
Network equipment maker Cisco Systems Inc filed several lawsuits on Friday against Arista Networks Inc, alleging the smaller rival of copying its networking technologies.
The lawsuits, filed in a federal court in California, accuse Arista of infringing on 14 patents on networks and also on related copyrights, Cisco General Counsel Mark Chandler said in a blog post.
Arista was formed by former Cisco employees, including Chief Development Officer Andreas Bechtolsheim, Chief Technology Officer Kenneth Duda, and Chief Executive Officer Jayshree Ullal.
“Rather than building its products and services based on new technologies developed by Arista, however, and providing legitimate competition to Cisco, Arista took a shortcut by blatantly and extensively copying the innovative networking technologies designed and developed by Cisco,” one of the complaints said.
Cisco is a leader in the networking world, with revenue of $12.2 billion in the third quarter. Arista, in contrast, reported sales of $155.5 million for the period, although it is growing fast.
Arista said it had not yet been able to evaluate the lawsuits.
“While we have respect for Cisco as a fierce competitor and the dominant player in the market, we are disappointed that they have to resort to litigation rather than simply compete with us in products,” Arista said in an emailed statement.
Cisco filed the lawsuits on the same day the U.S. Supreme Court agreed to review a $64 million patent infringement verdict that Commil USA LLC won against the company.
Is RadioShack Going Bankrupt?
September 23, 2014 by admin
Filed under Around The Net
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Troubled electronics retailer RadioShack Corp says filing for bankruptcy protection is an option if its cash situation worsens, after reporting its tenth straight quarterly loss.
The company said it was also exploring other options, including a sale or an investment, and liquidation as the last resort.
RadioShack, whose sales have been in free-fall since 2010 as it struggles to compete with internet retailers, said in a regulatory filing it was working with its lenders and landlords to restructure its debt and cut costs.
“It would surprise me if we got to Nov. 1 without a bankruptcy,” Wedbush Securities Inc analyst Michael Pachter told Reuters.
RadioShack shares, which are in danger of being delisted from the New York Stock Exchange, were up 2 percent at 95 cents in volatile early trading.
The company said same-store sales declined 20 percent in the latest quarter, while total sales plunged to their lowest in more than 20 years.
The company is being advised by a restructuring attorney at law firm Jones Day as it tries to strike a deal with creditors to close stores, two people close to the matter told Reuters on Wednesday.
RadioShack tried to close 1,100 stores this year, but reduced that number to 200 a year when lenders did not agree to the plans.
RadioShack’s landlords, however, may be open to mass store closures if they believe it will allow them to find new tenants more quickly than in a bankruptcy, a source close to the matter told Reuters.
David Tawil, president of hedge fund Maglan Capital that focuses on companies approaching bankruptcy, said he saw “major execution risks” to RadioShack’s recapitalization and turnaround efforts.
“I don’t think that the chances are great that RadioShack survives,” Tawil said, adding that the company’s credit default swaps were trading higher, pointing to market expectations of a near-term debt default.
The company ended the second quarter with $30.5 million in cash and $658.0 million in debt, which matures between 2018 and 2019.
Will Microsoft Buy A Slice of Dell?
Microsoft Corp is in talks to invest between $1 billion and $3 billion of financing in a buyout of Dell Inc, CNBC cited unidentified sources as saying on Tuesday.
Private equity outfit Silver Lake Partners is working to finalize a bidding group to take the world’s No. 3 PC maker private, and has started discussions with potential equity partners, sources familiar with the matter have said.
Dell also has formed a special committee to take a close look at any potential deal on the table, multiple sources with knowledge of the matter told Reuters. If successful, it would be one of the largest corporate buyouts since before the global financial crisis.
Microsoft, which accelerated its foray into computer hardware in 2012 with the launch of the Surface tablet, will provide the capital in the form of mezzanine financing according to CNBC, which is a hybrid of debt and equity.
Yahoo Going Up
November 29, 2012 by admin
Filed under Around The Net
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Yahoo Inc shares climbed to their highest level in a year and a half, as investor confidence seems to be increasing that new Chief Executive Marissa Mayer can orchestrate a comeback that eluded three of her predecessors.
The Internet pioneer has yet to actually provide Wall Street with any hard evidence that its business is turning a corner – and she has warned that it will be a lengthy job – but investor faith in the ex-Google executive is running high.
Hedge funds Tiger Global Management and Greenlight Capital Management recently disclosed large stakes in Yahoo, accumulated during the third quarter.
“Money managers are staring to want to own this name again,” said Colin Gillis, an analyst with BGC Partners.
“For the amount of traffic they have, and the assets they have, they should be able to squeeze some value out of that,” Gillis said, referring to Yahoo. With Mayer at the helm, he said, Yahoo has “finally got somebody who the market believes can do that.”
Gravity Capital Management’s Adam Seessel said that Mayer’s recruitment of various Google Inc employees, including recently hired Yahoo Chief Operating Officer Henrique de Castro, has also helped burnish Yahoo’s image.
“What the market is seeing is not (financial) numbers so much as they’re seeing people voting with their feet, people moving from Google to Yahoo,” said Seessel, whose firm owns Yahoo shares.
“All these people from Google wouldn’t be following her if they didn’t think that she didn’t have some good cards to play,” he said.
Facebook Growth Very Good
May 3, 2011 by Mike
Filed under Around The Net
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Facebook Inc’s business is growing faster than forecast several months ago and the social media company is on track to surpass $2 billion in earnings before interest, taxes, depreciation and amortization in 2011, according to a story in The Wall Street Journal.
Facebook’s growth is above the growth projections that circulated when Goldman Sachs and Digital Sky Technologies invested in the closely held Internet company, the newspaper said in its online edition.
The newspaper did not indicate by how much Facebook may exceed those original expectations.