The company announced on Thursday that its quarterly revenue for the three-month period ending in September was flat overall at $20.5 billion. The company’s net profit was down 4 percent year-over-year from $4.9 billion to $4.7 billion.
Those results were driven by quarterly revenue from the company’s Intelligent Cloud segment, which includes Azure and Windows Server, and its Productivity and Business Processes segment, which includes Office 365 and Dynamics. Intelligent Cloud revenue grew 8 percent year-over-year to $6.4 billion, while Productivity and Business Processes segment revenue grew 6 percent to $6.7 billion.
It’s another positive sign for the cloud-focused strategy that the company adopted under the leadership of CEO Satya Nadella.
Azure revenue grew by 116 percent year over year, and Microsoft revealed for the first time that its profit margin from its cloud platform is 49 percent. The company continues to keep the exact revenue and profit numbers from its public cloud platform under wraps, however.
Office 365 commercial revenue grew 51 percent year-over-year. Microsoft reported it now has more than 85 million commercial monthly active users of its cloud-based productivity suite as a service offering.
Surface sales were another bright spot for Microsoft. The company’s line of tablets and laptops brought in $926 million over the past quarter, compared to $672 million during the same period in 2015. Phone revenue continued to drag the company down for another quarter, however — revenue from that division dropped by 72 percent year-over-year.
Microsoft’s non-GAAP results of $22.3 billion in revenue and earnings of $0.76 a share blew past analyst expectations for the quarter. The consensus of analysts polled by Thomson Reuters was an expected $21.7 billion in revenue and earnings of $0.68 a share. Investors rejoiced at the news, sending the company’s stock to an all-time high above $60 per share, beating a previous high set in 1999.
Tesla Motors Inc has plans to introduce a ride share services program and will announce details next year, the luxury electric vehicle maker said on its website, a service first outlined by Chief Executive Elon Musk in his master plan in July.
News of the Tesla Network was in a disclaimer about the self-driving functionality on new Model S vehicles. Musk said last week Tesla is building new vehicles with the necessary hardware to eventually enable full autonomy, although the software is not yet ready.
“Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year,” read the disclaimer.
Tesla did not immediately respond to a request for more detail.
Car makers have rushed to invest in so-called mobility services, hoping to capture the potential trillions of dollars in revenue from selling both vehicles and such on-demand services, while carving out a stake in the industry dominated by Uber.
Barclays analyst Brian Johnson wrote in a note to investors on Thursday that although a Tesla Network could “excite the market” over its potential earnings stream, it was a costly proposition.
“While we think ride-sharing/hailing is the future of mass-market mobility, we have some financial concerns with the idea of an OEM-owned fleet,” Johnson wrote.
Venture capitalists and corporate investors had poured nearly $28 billion into the ride services sector in the past decade as of June, according to a Reuters analysis.
General Motors has made the biggest bet, investing $500 million in Lyft in January. GM’s upcoming electric Chevrolet Bolt was designed expressly with car sharing in mind, executives have told Reuters.
Money-losing Tesla lacks the deep pockets of GM, and ride services companies like Uber and Lyft burn billions of dollars in price wars to secure regional dominance, as occurred with Uber in China before it ceded to local rival Didi Chuxing.
In his “Master Plan, Part Deux” in July, Musk outlined a system in which a Tesla owner could add a car to a shared Tesla fleet using a phone app, allowing it to “generate income for you” and lower the cost of ownership.
Musk said that in cities where car ownership is lower, Tesla would operate its own fleet.
According to Piper Jaffray Companies, a recent survey of 10,000 U.S. teenagers showed that 52% used Facebook at least once a month this fall, compared to 60% who used it monthly in the spring.
“Factoring out shifts in the population surveyed, core Facebook usage likely declined by three basis points, which indicates Facebook is gradually becoming less relevant versus Instagram and Snapchat,” Piper Jaffray analyst Gene Munster wrote in a research note to investors.
The same survey, however, showed that teen use of Facebook-owned Instagram has gone from 70% to 74% in the same time frame — and rose from 75% to 80% for rival Snapchat.
When asked what their favorite social network was this fall, 35% said Snapchat; 24% said Instagram; and 13% said Twitter and Facebook (which tied for third place).
While older users – say anywhere from 35 to 65 years old – have shown to be loyal Facebook users, the site isn’t pulling in enough users 24 and younger to offset losses as older users die off.
“Well, think about it,” said Zeus Kerravala, an analyst with ZK Research. “If Facebook just lost 8% of all teens, that’s millions of users…. Over time, they need to keep the funnel of users coming in on the younger side. I think it creates a huge issue down the road. It’s not likely they can add users that are of older generations. They probably have all they will get from anyone 30 and older.”
Facebook certainly has been working to draw in younger users.
In August, Facebook unveiled its Lifestage stand-alone app. Designed for iOS devices, the app enables teen users to share videos with other people in their schools.
Lifestage was born as a rival to Snapchat and basically a video version of an early stage Facebook.
Also, in March, the company bought face-swapping app Masquerade or MSQRD. The app enables users to dress up their photos and selfies with an Iron Man helmet or a panda outfit.
Facebook hoped that by being able to add special effects to their pics, teens and young adults would be pulled onto Facebook — or at least one of the apps. But so far, at least, those efforts don’t appear to be panning out.
Just moments after Samsung officially confirmed that it is stopping production of Note 7 and halting all sales, the first realistic Galaxy S8 rumors have emerged.
According to a leak on the Weibo social network there will be two variants of the Galaxy S8 – the 5.1-inch and 5.5 inch. We are quite sure that the 5.5-inch version comes with an edge shaped screen and it is likely to be imaginatively called the Samsung Galaxy S8 Edge.
According to the leak, both versions of the S8 will use Super Amoled screens. The 5.1 version comes with a QHD (2560×1440) while the 5.5 version might have a 4K display.
As we indicated before, there will be two processers powering the Galaxy S8 phones. One is the Qualcomm Snapdragon 830 while the other is the Exynos 8895. The Snapdragon 830 can be safely called the 10nm successor of Snapdragon 820. The Exynos 8895 will likely use the same processor.
It is likely that Samsung will offer Exynos powered phones in the European market and leave us with a less attractive modem. The US and some other markets will end up with the better Qualcomm variant.
The Galaxy S8 comes with two main cameras, that is the current trend for high end phones and it will incorporate the UFS 2.1 flash storage.
One not so surprising announcement is that the Samsung’s S Voice might be replaced by the Viv assistant. Samsung just bought Viv – the digital assistant that was created by one of the people who gave the world Siri.
Most of the leaked information make sense, but again, we will have to wait and see if the information is really accurate. It would make a lot of sense to see Galaxy S8 phones with the specifications mentioned above. Some colleagues are confident that the phone may launch on February 26 2017. We are confident the launch might take place a day or two before the Mobile World Congress 2017, that takes place in Barcelona and starts on 27 February.
Samsung Electronics Co cut its quarterly profit estimate by a third on Wednesday, absorbing a $2.3 billion hit from ditching its flagship smartphone in what could be one of the costliest product safety failures in tech history.
Quantifying the financial pain of Tuesday’s move to scrap the Galaxy Note 7 smartphone after a global recall and weeks of mounting problems, the world’s top smartphone maker said it expects its July-September operating profit was 5.2 trillion won ($4.7 billion), down from the 7.8 trillion won it estimated five days ago.
Samsung said in a statement the 2.6 trillion won ($2.3 billion) guidance cut reflects the sales and earning impact it currently expects from the decision to permanently halt sales of the $882 Note 7 device. Its third-quarter revenue estimate was also cut to 47 trillion won from 49 trillion won previously.
The new earnings guidance is 30 percent below third-quarter 2015’s operating profit, and left investors and analysts pondering the longer impact on Samsung’s brand and earnings. Rival suppliers of smartphones that use the Android operating system, like Samsung’s, stand to benefit if the Note 7 damage drive consumers elsewhere.
“It’s possible there could be additional profit impact in the fourth quarter but it likely won’t be as large as the third quarter,” said Park Jung-hoon, a fund manager at HDC Asset Management, which owns shares in Samsung. “I think it’s possible for fourth-quarter profits to come in as much as the high 7 trillion won range.”
Samsung shares ended down 0.7 percent on Wednesday, with the Seoul market closing before the earnings guidance cut was announced.
Salesforce.com Inc is still mulling over whether it should make an offer for Twitter Inc in the face of resistance from Salesforce shareholders over the strategic merits and valuation of such a deal, people familiar with the matter said.
Twitter shares have lost as much as a third of their value since Oct. 5 on concerns the company has attracted less interest from potential acquirers than previously envisaged. It now has a market capitalization of $12 billion.
Salesforce is deliberating whether it is worth making a lowball offer for Twitter in the coming days based on Twitter’s stock performance and any news of other bidders, the people said.
Other potential acquirers such as Alphabet Inc’s Google and Walt Disney Co have backed away from making offers for the Internet company, the people said. There may however be other companies contemplating offers for Twitter whose identity has not yet been reported, some of the sources suggested.
The sources asked not to be identified because the deliberations are confidential. Salesforce declined to comment while Twitter, Google and Disney did not immediately respond to a request for comment.
Reuters previously reported that Twitter aimed to conclude deliberations about selling itself by Oct. 27, when it reports its third-quarter earnings.
Salesforce.com, run by CEO Marc Benioff, is focused on cloud-based sales and marketing software. Unlike Twitter, its main product is aimed at business users, not consumers. Under Salesforce.com, Twitter could become a corporate tool used to power sentiment analysis and nurture customer relationships.
A potential acquisition of Twitter has weighed down Salesforce’s stock since news broke on Sept. 23 that it was vying for Twitter. Its shares rose as much as 7 percent on Monday after a weekend report by Bloomberg News suggested Salesforce was unlikely to make an offer.
Some analysts and investors have questioned why Salesforce would need to own Twitter, when it already licenses the Twitter “firehose” for its new artificial intelligence platform, Einstein.
Los Angeles start-up ildockgear has designed and created a Lightning adapter that allows iPhone 7 users to charge their device and listen to music over analog headphones at the same time. The device is about the size of a U.S. quarter.
The company began a crowdfunding campaign on Kickstarter for its ILDOCK, and it has already garnered more than $20,000, four times its original goal.
In addition to the basic ILDOCK adapter, which contains a 3.5mm headphone jack and a Lightning charging port, the company has also produced an ILDOCK Plus, which adds an SD card slot, a microSD slot and USB ports.
Users can connect up to a 128GB flash card with ILDOCK Plus or connect to any size USB drives, the company states in its marketing material.
Early-bird backers can reserve an ILDOCK for a pledge of $5 and currently can get two ILDOCK Plus adapters for $18. (A $15 single ILDOCK Plus offer has already sold out.)
The ILDOCK and ILDOCK plus come in four iPhone 7-mimicking colors: Silver, gold, rose gold and “space” gray.
In addition to compatibility with the headphone jackless iPhone 7, the ILDOCK also works with any iPhone or iPad with a Lightning port.
The ILDOCKs are expected to begin shipping in November.
High-tech computing firm Nutanix has purchased two startups to enhance its data and storage services, as the firm continues to grow its business despite a protracted delay in its initial public offering.
San Jose, California-based Nutanix said on Sunday it bought PernixData, a software company that facilitates data storage, and Calm.io, a development and automation startup, both also located in California.
Adding the new technologies will enable Nutanix to improve the speed of its cloud computing platform and enhance or create new software products, the company said.
The chief executives of both acquired companies said their company culture and technology were complementary with Nutanix’s.
“One thing that keeps both these companies going is innovation,” PernixData CEO and Co-founder Poojan Kumar said on a call with reporters.
The deal is a move to grow Nutanix’s business while remaining in the private market, despite the company filing for an IPO in December. At the time, the company estimated raising $200 million in the deal, but has not yet priced shares.
Investors expected Nutanix – valued at $2 billion after its last financing round – to be among the first companies out in January, but a volatile market battered public technology stocks and put the IPO market into a deep freeze. The market remains challenging, with just 59 deals pricing this year, down 55 percent from the same time last year, according to Renaissance Capital, a manager of IPO-focused funds.
Technology IPOs have been particularly difficult, as buyers are reluctant about valuations. There were no technology IPOs this year until April, and there have been only seven since.
Some experts say the acquisitions will further kick out Nutanix’s IPO, as the companies will need time to integrate their employees and technology.
“Larger transactions … push out IPOs as integration and other aspects of a deal can create one more thing for investors to understand and management teams to articulate,” said Kapil Venkatachalam, principal at Technology Crossover Ventures, who was not part of the Nutanix deal.
“The acquisitions of Calm.io and PernixData are completely independent of any IPO process and have no impact on any plans,” a Nutanix spokesman said.
“Our board, with the assistance of independent advisors, determined that this transaction, upon closing, will deliver immediate, significant and certain cash value to our stockholders,” said Graham Weston, co-founder and chairman of Rackspace, in a statement. “We are also excited that this transaction will provide Rackspace with more flexibility to manage the business for long-term growth and enhance our product offerings.”
The acquisition is expected to close in the fourth quarter.
Rackspace, based in Texas, has been known as a significant player in the cloud market, competing in the same company as Alphabet’s Google, Microsoft and AWS. It is also known as a web hosting provider.
However, Rackspace has focused on virtual private data centers, which are an extension of a private data center, while the cloud market is leaning heavily toward the pay-as-you-go, consumption-based pricing of the public cloud.
That change has been tough on Rackspace. In May 2015, the company’s stock was over $50 per share. Today it’s just over $30.
By being acquired, Rackspace will transition from a public to a private company that no longer will have stockholders, who likely would be unhappy with the costs and tumult that transitioning the company to a public cloud provider would entail.
“Rackspace has had a big brand and now they need to go through a transition,” said Zeus Kerravala, an analyst with ZK Research. “Going private can help companies make necessary transitions without worrying about quarterly numbers.”
Taylor Rhodes, president and CEO of Rackspace, said in a blog post that the acquisition will help the company grow.
IBM launched its Power8 lineup of superscalar symmetric multiprocessors back in August 2013 at the Hot Chips conference, and the first systems became available in August 2014. The announcement was significant because it signaled the beginning of a continuing partnership between IBM and Nvidia to develop GPU-accelerated IBM server systems, beginning with the Tesla K40 GPU.
The result was an HPC “tag-team” where IBM’s Power8 architecture, a 12-core chip with 96MB of embedded memory, would eventually go on to power Nvidia’s next-generation Pascal architecture which debuted in April 2016 at the company’s GPU Technology Conference.
NVLINK, first announced in March 2014, uses a proprietary High-Speed Signaling interconnect (NVHS) developed by Nvidia. The company says NVHS transmits data over a differential pair running at up to 20Gbps, so eight of these differential 20Gbps connections will form a 160Gbps “Sub-Link” that sends data in one direction. Two sub-links—one for each direction—will form a 320Gbps, or 40GB/s bi-directional “Link” that connects processors together in a mesh framework (GPU-to-GPU or GPU-to-CPU).
NVLINK lanes upgrade from 20Gbps to 25Gbps
IBM is projecting its Power9 servers to be available beginning in the middle of 2017, with PCWorld reporting that the new processor lineup will include support for NVLINK 2.0 technology. Each NVLINK lane will communicate at 25Gbps, up from 20Gbps in the first iteration. With eight differential lanes, this translates to a 400Gbps (50GB/s) bi-directional link between CPUs and GPUs, or about 25 percent more performance if the information is correct.
NVLINK 2.0 capable servers arriving next year
Meanwhile, Nvidia has yet to release any NVLINK 2.0-capable GPUs, but a company presentation slide in Korean language suggests that the technology will first appear in Volta GPUs which are also scheduled for release sometime next year. We were originally under the impression that the new GPU architecture would release in 2018, as per Nvidia’s roadmap. But a source hinted last month that Volta would be getting 16nm FinFET treatment and may show up in roughly the same timeframe as AMD’s HBM 2.0-powered Vega sometime in 2017. After all, it is easier for Nvidia to launch sooner if the new architecture is built on the same node as the Pascal lineup.
Still ahead of PCI-Express 4.0
Nvidia claims that PCI-Express 3.0 (32GB/s with x16 bandwidth) significantly limits a GPU’s ability to access a CPU’s memory system and is about “four to five times slower” than its proprietary standard. Even PCI-Express 4.0, releasing later in 2017, is limited to 64GB/s on a slot with x16 bandwidth.
To put this in perspective, Nvidia’s Tesla P100 Accelerator uses four 40GB/s NVLINK ports to connect clusters of GPUs and CPUs, for a total of 160GB/s of bandwidth.
With a generational NVLINK upgrade from 40GB/s to 50GB/s bi-directional links, the company could release a future Volta-based GPU with four 50GB/s NVLINK ports totaling of 200GB/s of bandwidth, well above and beyond the specifications of the new PCI-Express standard.
Better-than-expected demand for Samsung Electronics Co Ltd’s new Galaxy Note 7 is creating supply problems worldwide, the South Korean tech giant said, suggesting strong initial sales for the new premium smartphone.
While robust demand could help deliver another solid quarter of earnings, Samsung also risks missing out on potential sales if it cannot boost supply quickly. Rivals such as Apple Inc are poised to launch new phones which could pull customers away from Samsung if a shortage persists.
“As pre-order results for the Galaxy Note 7 have far exceeded our estimates, its release date in some markets has been adjusted,” Samsung told Reuters in a statement without commenting on where launch delays could occur.
Production problems for the curved displays for the Galaxy S6 edge phone resulted in disappointing sales last year, and some investors fear a repeat if the world’s top smartphone maker does not move quickly to meet Note 7 demand.
Samsung said it was trying to boost production at the secret locations where the Notes are made, and aimed to meet demand “as early as possible”. It gave no further details.
A person familiar with the matter told Reuters there was no production issue for the curved screens used on the Galaxy Note 7 and that the shortage would not be a long-term problem.
“The party got more visitors than Samsung expected, so they just need to put more food out,” said Nomura analyst C.W. Chung, who said the supply situation was not a major risk given that Samsung made key parts such as displays and chips in-house.
Samsung could sell as many as 15 million Galaxy Note 7 phones this year, Chung said, compared with an estimated 9 million Galaxy Note 5 phones sold last year.
The phone went on sale on Aug. 19 in countries including the United States and South Korea, where it retails for 988,900 won ($882).
The acquisition would make Xylem a major player in the market for smart meters, at a time when regulatory requirements and a drive for savings are pushing both companies and consumers to control their water and energy consumption more tightly.
Xylem will finance the deal with about $400 million of its non-U.S. cash, new and existing credit facilities, and a combination of short- and long-term debt, the company said in a statement.
Xylem, which manufactures equipment used in water and wastewater applications, reaffirmed its 2016 earnings forecast and said it expects the deal to add to its adjusted earnings in 2017.
Reuters exclusively reported earlier on Monday that the companies were nearing a deal.
Sensus, based in Raleigh, North Carolina, is a supplier of smart metering and related communications systems to the water, gas, heat and electric utility sectors. Its revenue was $837 in the year ended March 2016.
Xylem said the purchase price was 10.7 times Sensus’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in fiscal 2016. Rye Brook, New York-based Xylem had revenue of $3.7 billion last year.
Sensus is one of the longest held investments in the history of private equity. Buyout firm Jordan Company, in partnership with Goldman Sachs Group Inc’s private equity arm, acquired the company for $650 million in 2003.
Goldman’s private equity business still owns 34 percent of Sensus, with Jordan Company owning the remainder.
Sensus’s financial metrics have steadily improved since bottoming three years ago, driven by stronger end-market demand and comprehensive cost-cutting initiatives, ratings agency Moody’s Investors Service Inc said earlier this year.
New product launches, combined with Sensus’s restructuring efforts, should benefit operating results over the medium term, Moody’s added.
Troubled mobile phone maker BlackBerry has decided to make a bit more money by suing those it thinks stole its ideas.
A patent lawsuit has been launched against internet telephony outfit Avaya. However in making its case that Avaya should pay royalties, BlackBerry appears to be looking at what it has done rather than what it is doing. The firm argues that it should be paid for its history of innovation going back nearly 20 years.
The court papers say:
“BlackBerry revolutionised the mobile industry. BlackBerry… has invented a broad array of new technologies that cover everything from enhanced security and cryptographic techniques, to mobile device user interfaces, to communication servers, and many other areas.”
BlackBerry claims Avaya infringes eight US Patents:
Nos. 9,143,801 and 8,964,849, relating to “significance maps” for coding video data;
No. 8,116,739, describing methods of displaying messages;
No. 8,886,212, describing tracking location of mobile devices;
No. 8,688,439, relating to speech decoding and compression;
No. 7,440,561, describing integrating wireless phones into a PBX network;
No. 8,554,218, describing call routing methods; and
No. 7,372,961, a method of generating a cryptographic public key.
The oldest is 1998 and the most recent is 2011..
Products targeted by Blackberry include Avaya’s video conferencing systems, Avaya Communicator for iPad, a product that connects mobile users to IP Office systems, and various IP desk phones. .
The BlackBerry complaint states that the company notified Avaya of its alleged infringement of those specific patents in a letter dated December 17, 2015, which must have come as a bit of a surprise. It has been filed in the Northern District of Texas, which is less because the region is more patent friendly (like East Texas) but because it is where Avaya does business and maintains a two-story office.
BlackBerry has hired top patent lawyer Quinn Emanuel. The firm defended Samsung in the high-profile Apple v. Samsung case and has taken on various cases for Google.
Last year Cisco paid a “license fee” to Blackberry. Details were few and far between but it seems to have been to make Blackberry lawyers go away. In May, BlackBerry CEO John Chen told investors on an earnings call that he was in “patent licensing mode,” eager to monetize his company’s 38,000 patents.
The microblogging service operator’s shares fell 11 percent in extended trading to $16.40. While Twitter struggles to find a way to boost user growth and win over advertisers, social media services such as Instagram and Snapchat are expanding their footprints.
Co-founder Jack Dorsey returned to the company as chief executive a year ago, but his plan for reviving Twitter is at best seen as unfinished.
The company’s second quarter revenue missed Wall Street estimates and the revenue forecast for the current quarter of $590 million to $610 million was well below the average analyst estimate of $678.18 million.
Twitter’s user base increased about 1 percent to 313 million average monthly active users in the second quarter from 310 million in the first quarter.
“Clearly, the turnaround is still a work in progress and the question of whether being a platform for a mass audience versus a niche audience needs to be answered,” said James Cakmak, analyst at Monness, Crespi, Hardt & Co.
Earlier this year, Twitter laid out a long-term strategy to turn around its business, focusing on five areas: its core service, live-streaming video, the site’s “creators and influencers,” safety and developers.
In live video, the company has signed deals with Major League Baseball and the National Basketball Association to revive user growth and attract more advertising dollars. Executives also said Twitter was investing more in user safety as the company continues to grapple with high-profile instances of abuse and harassment.
Struggling with flat user growth and lower spending by advertisers, Twitter has doubled down on attracting more people and encouraging existing advertisers to spend more as it tries to shape its stagnating business.
“We are a year into Dorsey coming back and there is really no end in sight of when it is going to start picking up to where investors are going to be happy,” said Patrick Moorhead, analyst at Moor Insights & Strategy.
Twitter is also working to better define its role in the social media landscape. This week it rolled out a video ad that showed it as the place to go for live news, updates and discussion about current events, which executives also emphasized on a call with analysts.
If you look at adverts for Samsung’s new Galaxy you would be forgiven for thinking that the smartphone is waterproof. Unfortunately according to US consumer reports, it isn’t.
The Samsung advert shown in Italy ends with the dramatic placing of a Galaxy into a glass of water. Which looks impressive.
Consumer Reports performs an immersion test when a manufacturer claims that its product is water-resistant and the Galaxy S7 Active failed.
While the phone performed extremely well in other tests. Consumer Reports is refusing to recommend it because the water resistant claim is incorrect.
Samsung says its phone follows an engineering standard called IP68 that covers both dust- and water-resistance, and that the phone is designed to survive immersion in five feet of water for 30 minutes.
Consumer Reports placed a Galaxy S7 Active in a water tank pressurised to 2.12 pounds-per-square-inch, the equivalent of just under five feet of water, and set a timer for 30 minutes. When it removed the phone, the screen was obscured by green lines, and tiny bubbles were visible in the lenses of the front- and rear-facing cameras. The touchscreen was borked.
A second Galaxy S7 Active also failed the same test and neither phone worked properly again.
Samsung says it has received “very few complaints” about this problem, and that in all cases, the phones were covered under warranty. A spokes Samsung sang:
“The Samsung Galaxy S7 active device is one of the most rugged phones to date and is highly resistant to scratches and IP68 certified. There may be an off-chance that a defective device is not as watertight as it should be.”
The company says it is investigating the matter.