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Can Licensing Save Blackberry?

June 29, 2016 by Michael  
Filed under Mobile

Blackberry is hoping to pull its nadgers out of the fire by licencing its mobile software to other outfits.

However BlackBerry CEO John Chen had to admit that there has been zero revenue from the endeavour, which he started off last month.

Chen said he’s been in discussions with some phone manufacturers and set-top box operators who have expressed interest and “anything was possible.”

He added he’s not opposed to licensing BlackBerry’s security software either if the right deal comes along. He expects BlackBerry to break even or record a slight profit in its new mobility solutions segment, which includes device and software licensing sales, during the third quarter that in November.

Making the segment profitable this fiscal year is one of the company’s top goals, Chen said.

It’s too soon to project how much revenue the software-licensing venture can garner, Chen said, so to achieve the goal by the end of November, BlackBerry will have to ensure its devices are on track for profitability as well.

The company’s newest phone, the Android-powered Priv, has moved slower than hoped. In fact it moved slower than a student who had been up all night playing counterstrike.

During BlackBerry’s first quarter — the second full quarter to include Priv sales — the smartphone segment generated US$152 million of revenue and had a US$21-million operating loss. Chen promised that loss would be significantly smaller in the next quarter.

The company sold roughly 500,000 devices at an average price of $290 each, he said, which is about 100,000 smartphones fewer than the previous quarter and about 200,000 fewer than two quarters earlier. BlackBerry previously said the company needs to sell about three million phones at an average of $300 each to break even, though Chen indicated that may change as the software licensing business starts to contribute to revenue.

Chen said the Priv has proved unaffordable to most people, except for top-level executives.

The company plans to release two mid-range, Android-powered phones before its current fiscal year ends Feb. 28, 2017, he said. More information on the devices is expected next month, but Chen said one will only have a touch screen rather than BlackBerry’s traditional keyboard.

The company is trying to reach the market in more innovative ways. It’s currently hosting a pop-up shop in New York City, and Chen said he’d consider more of them around the world if the trial is successful.

“I really, really believe that we could make money … out of our device business,” he said during a conference call with analysts Thursday morning.

Chen previously indicated the company will stop making smartphones if the device business remains unprofitable. While he said he doesn’t believe that will be necessary, the software licensing plan could help make the transition smoother if the time comes.

BlackBerry  reported a $670 million net loss in the first quarter of its 2017 financial year, but said its recovery plan for the year remains on track.

Revenue was below analyst estimates at $400 million under generally accepted accounting principles, or US$424 million with certain adjustments.

Courtesy-Fud

 

BlackBerry Says Device Business Is Top Priority

June 24, 2016 by mphillips  
Filed under Mobile

BlackBerry Ltd’s top priority this year is to make its devices business turn a profit, its chief executive said, even as it weighs the future of its hardware operation.

“The device business must be profitable, because we don’t want to run a business that drags onto the bottom line,” Chief Executive John Chen told investors at the company’s annual meeting. “We’ve got to get there this year.”

Chen has previously said a decision would be made by September on the future of the unit, which has suffered a sustained drop in sales in recent quarters.

But at the meeting, attended by around 100 people, he said he sees better opportunity in providing services that enable increasingly commoditized hardware to do more.

“I don’t personally believe handsets will be the future of any company,” he said.

BlackBerry, once the smartphone market leader before being displaced by Apple Inc and competitors run on Alphabet Inc’s Android platform, has worked to reposition itself as a software and service provider focused on device management for large organizations.

In its presentation to investors, the company said it expects the broader market for types of software it is producing to expand to $17.6 billion by 2019, from $525 million in 2012 and below $4 billion in 2015, powered by growth in medical, legal, financial and automotive industries.

But some of those in attendance were skeptical about BlackBerry’s ability to deliver on its strategic pivot.

“The first word that comes to mind is lackluster,” said one shareholder at the meeting who declined to give his name. “Time is running out.”

Chen reiterated that BlackBerry wants to grow its software revenue by 30 percent in this fiscal year, which he estimated would be double overall market growth, and to notch positive free cash flow.

BlackBerry is due to report first quarter results on Thursday.

Chen took up the CEO role in 2013 with a reputation as a turnaround artist. But the company’s stock has only risen modestly since then, with many investors waiting for signs the now-smaller company will be able to carve out new opportunities.

“I appreciate the strategy,” said Ken Tota, an investor in BlackBerry’s biggest shareholder, Fairfax Financial Holdings Ltd. He said he was optimistic a renewed focus on security could help reinvigorate BlackBerry over the next five years.

“It’s a niche, but it’s a worldwide niche,” he said.

 

 

Dell Close To Deal To Sell Software Business

June 21, 2016 by mphillips  
Filed under Computing

Buyout firm Francisco Partners and the private equity arm of activist hedge fund Elliott Management Corp are in advanced negotiations to purchase Dell Inc’s software division for more than $2 billion, three people familiar with the matter said.

Divesting the software assets will help Dell refocus its technology portfolio and bolster its balance sheet after it agreed in October to buy data storage company EMC Corp for $67 billion. EMC owns a controlling stake in VMware Inc, a cloud-based virtualization software company.

Dell is seeking to sell almost all of its software assets, including Quest Software, which helps with information technology management, as well as SonicWall, an e-mail encryption and data security provider, the people said.

Boomi, a smaller asset focusing on cloud-based software integration, will be retained by Dell, one of the people added.

An agreement between Dell and the consortium of Francisco Partners and Elliott could be reached as early as this week, the people said, cautioning that the negotiations could still end unsuccessfully.

The sources asked not to be identified because the negotiations are confidential. Dell declined to comment, while Francisco Partners and Elliott did not immediately respond to requests for comment.

A sale of Dell’s software division would free it from some of its least profitable assets and cap the program of divestitures that the Round Rock, Texas-based computer maker embarked on following its deal with EMC. EMC shareholders are due to vote on the deal with Dell on July 19.

While Elliott has sought to buy companies in the past as part of its shareholder activist campaigns, the Dell software deal would represent its first major private equity investment since it hired Isaac Kim, previously a principal at private equity firm Golden Gate Capital, last year to help expand its capacity in leveraged buyouts.

Francisco Partners focuses on private equity investments in the technology sector. It has raised about $10 billion in capital and invested in more than 150 technology companies since it was launched more than 15 years ago.

 

 

 

Does Qualcomm Need Apple?

June 21, 2016 by Michael  
Filed under Computing

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

 

Apple’s Next iPhone Will Use Intel Modem Chips

June 13, 2016 by mphillips  
Filed under Mobile

Apple Inc’s next iPhone will use modems chips from Intel Corp, taking the place of those made by Qualcomm Inc in some versions of the new smartphone, Bloomberg reported, citing people familiar with the matter.

Intel’s modem chips will be in iPhones used on AT&T Inc’s U.S. network and some other versions of the smartphone for overseas markets, Bloomberg reported on Friday.

However, iPhones sold in China will use Qualcomm chips, and iPhones on Verizon Communications Inc’s network will also stick with Qualcomm, Bloomberg added.

Qualcomm’s shares fell 1.7 percent on Friday, while Intel’s stock was up 0.3 percent. Apple shares were down 0.5 percent in morning trading.

On an earnings call in April, Qualcomm Chief Executive Officer Steve Mollenkopf said he was assuming that a major customer would switch to multiple suppliers.

An Intel spokeswoman declined to comment on the story. Qualcomm and Apple were not immediately available for comment.

 

Yahoo Hires Advisors To Help Sale Trove Of Patents

June 9, 2016 by mphillips  
Filed under Around The Net

Yahoo Inc  has hired boutique investment bank Black Stone IP LLC to aid in the selling of nearly 3,000 of the internet company’s patents, the Wall Street Journal reported, citing people familiar with the matter.

The company has sent letters to a number of potential buyers for the patents, which date back to when the company was founded in 1996 and also include its original search technology, the report said.

The deadline for bids for the patents has been set for mid-June by Yahoo, according to the Wall Street Journal.

In March, Yahoo said it would explore the sale of $1 billion to $3 billion of patents, property and “non-core assets”.

Yahoo and Black Stone IP were not immediately available for comment.

 

Walmart Aims To Boost Online Sales With Tech Investment

June 7, 2016 by mphillips  
Filed under Around The Net

Wal-Mart Stores Inc executives touted the technology investments the world’s No. 1 retailer is making to boost online sales, during the annual shareholder meeting last week.

Chief Executive Officer Doug McMillon spoke about initiatives like online grocery pick up, the retailer’s two-day shipping program and its mobile wallet, Wal-Mart Pay. His comments capped off a week-long media event where the company displayed drones in warehouses and announced a partnership with Uber to deliver online groceries.

“We get to reimagine retail again, and that’s what we are going to do,” McMillon said. He also said changes to boost e-commerce sales will take some time to show results.

Wal-Mart onlines sales growth has sharply decelerated for five quarters even though its overall performance has been better than most competitors.

In the first quarter, online sales growth was 7 percent, down from 8 percent, 10 percent, 16 percent and 17 percent in the previous periods. In 2015, Wal-Mart’s online sales rose 12.3 percent to $13.7 billion, which was less than the jump of more than the 16 percent for market leader Amazon.com Inc, to $92.4 billion.

The meeting at the Bud Walton Arena in Fayetville, 30 miles from the company’s headquarters in Bentonville, was packed with 14,000 people, including workers from around the world and shareholders. Keeping with its practice of showcasing celebrities at the annual event, the meeting was hosted by talk show host James Cordon. Singers like Katy Perry, Andy Grammar and Nick Jonas also performed on stage.

The enthusiastic atmosphere momentarily turned somber after two shareholder proposals demanded higher wages, better treatment of employees and an independent chairman. The proposals did not get adequate votes.

Wal-Mart in February 2015 said it will lift its base pay to $10 an hour in 2016, a step it has implemented this year. Labor groups feel this is not enough.

 

 

In-Home Tech Support Companies HelloTech, Geekatoo Merging

May 24, 2016 by mphillips  
Filed under Mobile

Los Angeles-based startup HelloTech and rival in-home tech support company Geekatoo announced that they have merged, in a sign of consolidation in the hotly competitive on-demand sector.

HelloTech will combine its network of about 150 college students who provide on-demand tech repair to Southern California consumers with Geekatoo’s U.S. network of about 5,000 technicians, the companies said in a joint statement.

The merger connects HelloTech with Geekatoo’s national market and provides Geekatoo with more access to venture capital funding, HelloTech co-founder Richard Wolpert said in an interview.

HelloTech, which launched about a year ago, has raised $17 million from investors, while 5-year-old Geekatoo has raised close to $3 million.

“You could either use capital to expand really quickly or you could merge with a company like Geekatoo that had already spent money doing this,” said Mark Suster, managing partner at Upfront Ventures, which backed HelloTech.

The new company keeps the HelloTech name and will be led by Wolpert. He said the deal was a stock transaction, rather than a cash payment, but declined to provide further details.

Both companies dispatch in-home tech support within hours of a request to fix a wonky printer, install a new TV or troubleshoot WiFi problems, among other services.

HelloTech hit a few bumps last year after launching, with some negative customer feedback that its workforce of predominantly college students was unprofessional.

Wolpert said the company has worked out the glitches. HelloTech has a five-star rating on customer review site Yelp.

Geekatoo Executive Chairman Christian Shelton saw demand for tech services rising as more people add internet-connected devices – such as the smart thermostat Nest or WiFi camera Dropcam – to their homes.

The U.S. tech support industry makes about $30 billion in annual revenue, according to research by Parks Associates, a consulting firm.

“The opportunity is massive,” Wolpert said.

The company’s main competition is Geek Squad, a tech support service founded in 1994 and owned by big-box retailer Best Buy.

HelloTech targets baby boomers with disposable income to spend on new gadgets and someone to help get them up and running.

“There is enormous wealth in the baby boomer generation,” Suster said, and their “digital lives are becoming increasingly complicated.”

 

 

Nokia Slashes Another 1,000 Jobs

May 23, 2016 by mphillips  
Filed under Mobile

Nokia is eliminating 1,032 jobs in Finland as part of a cost-cutting plan following its acquisition of Alcatel-Lucent, the telecom network equipment maker said in a statement last Friday.

Finland’s biggest company has cut thousands of jobs in its home country over the past decade as its once-dominant phone business was eclipsed by the rise of smartphone rivals.

Nokia started the latest cost cutting program in April and is targeting 900 million euros ($1 billion) of operating cost synergies from the Alcatel deal by 2018.

The company has declined to give an overall figure for global job cuts, but has said it in talks with employee representatives in about 30 countries.

Nokia employs about 104,000 people worldwide, with about 6,850 in Finland, 4,800 in Germany and 4,200 in France.

 

 

Is There A ‘For Sale’ Sign In Pandora Music’s Future?

May 18, 2016 by mphillips  
Filed under Consumer Electronics

Corvex Management LP disclosed that it owns 9.9 percent of Pandora Media Inc and urged the internet music streaming company to consider being sold instead of pursuing a “costly and uncertain business plan.”

Corvex, a hedge fund run by Keith Meister, a protégé of billionaire activist investor Carl Icahn, said it had met with the company’s management and had withdrawn a plan to replace some of its board members. However, it now believes Pandora should hire an investment bank to help the company explore its strategic options including a sale.

“We believe there is likely to be significant strategic interest in the company at a substantial premium to the company’s recent stock price,” Corvex said, adding that large internet companies, handset makers and media companies could be potential buyers.

Pandora’s shares are down more than 25 percent in 2016 and more than 45 percent year-over-year. Corvex owns about 22.7 million shares in the company, making the hedge fund Pandora’s largest shareholder.

Pandora said in response that it is in constant dialogue with shareholders and committed to achieving long-term value for them.

“Pandora has a profitable core business, combined with a strong balance sheet. We are confidently investing to fully capture the massive opportunity ahead of us,” the company said in a statement.

Oakland, California-based Pandora has faced tough competition from music-streaming rivals such as Spotify, Apple Inc , Alphabet Inc’s Google and Amazon.com and has failed to turn an annual profit as a public company.

Analysts have said Pandora, which had a market capitalization of $2.29 billion on Monday, could be an acquisition target for larger media or internet companies looking to beef up their online music offerings.

Pandora co-founder Tim Westergren, a former musician who spearheaded Pandora’s music algorithm technology, returned to the company March 28 to become CEO, squashing some investors’ hopes the company could be sold.

Westergren told Reuters on April 15, “If you want to sell a company, you don’t do that by spending half a billion on acquisitions and hiring a new CEO.”

 

 

Lawsuit Against Facebook’s Storage Of Biometric Data To Proceed

May 9, 2016 by mphillips  
Filed under Around The Net

Facebook Inc lost the first round in a battle against some of its users who filed suit against the social networking company, alleging it “unlawfully” collected and stored users’ biometric data derived from their faces in photographs.

The judge presiding over the case in a California federal court turned down Facebook’s motion seeking dismissal of the suit.

Facebook filed the motion arguing that the users could not file a complaint under Illinois Biometric Information Privacy Act (BIPA) as they had agreed in their user agreement that California law would govern their disputes with the company, and that BIPA does not apply to “tag suggestions.”

The court found that Illinois law applies and that the plaintiffs have stated a claim under BIPA.

The complainants had alleged that Facebook’s face recognition feature that suggests “tags” on photos unlawfully collected and stored biometric data, in violation of the Illinois BIPA.

The case was filed by some Illinois residents under Illinois law, but the parties agreed to transfer the case to the California court, the court order showed.

Facebook was also hit with a lawsuit over its plan to issue new stock last month.

The company said in April it will create a new class of non-voting shares in a move aimed at letting Chief Executive Mark Zuckerberg give away his wealth without relinquishing control of the social media juggernaut he founded.

Facebook was not immediately available for comment.

 

 

Dell Technologies To Become New Name Of Combined Dell, EMC

May 4, 2016 by mphillips  
Filed under Computing

Dell’s planned $67 billion purchase of EMC will create a broad collection of businesses called Dell Technologies.

Under that banner, the pure Dell name will live on in the company’s client business, including its PCs, while its enterprise infrastructure division will be called Dell EMC, chairman and CEO Michael Dell announced on Monday at EMC World in Las Vegas.

Dell Technologies will be the only company selling everything from edge devices to core data centers and cloud infrastructure, a mission that rival HP backed away from when it split into Hewlett Packard Enterprise and HP Inc., Dell said.

He pitched the end-to-end strategy as a boon to customers who want a single partner that can do everything, letting them focus on business growth.

“You want technology made easier,” Dell said.

Dell Technologies will include all of what’s called Dell today, plus EMC’s core Information Infrastructure storage division, Pivotal, Virtustream, the partly public VMware and two security businesses: Dell’s SecureWorks and EMC’s RSA unit.

For EMC, owning a collection of semi-autonomous businesses and making them add up to something more is called federation, and it has come under attack from some investors and skeptics. On Monday, Dell called it a family and said Dell Technologies will be able to align its businesses and invest in new technologies at its own pace as a privately held company.

The acquisition is on track under its original terms and timeline, Michael Dell said. The deal still needs regulatory and shareholder approvals.

 

 

Apple’s Mac Slump Continues, Sales Tumble 12%

April 29, 2016 by mphillips  
Filed under Computing

Apple revealed that it sold 4 million Macs in the March quarter, a 12% decline from the same period the year before, and a larger contraction than for the personal computer business as a whole.

The year-over-year downturn in Mac sales was the second straight down quarter, and excepting a brutal 22% drop at the end of 2012, the largest since Apple introduced the iPhone in 2007.

Analysts at IDC and Gartner earlier this month pegged the continued contraction of the PC industry at 11.5% and 9.6%, respectively. Both also missed the actual Mac number for the quarter in their forecasts for Apple, overestimating by 11% to 13%: IDC had tapped shipments at 4.5 million, while Gartner said it was 4.6 million.

Apple had been on an extended streak of besting the PC average, with sometimes-impressive gains during the four-years-and-counting slump of the overall market. But the March quarter’s results put an end to the years-long run, which the Cupertino, Calif. company often touted.

Neither CEO Tim Cook or CFO Luca Maestri mentioned the end of the streak in Tuesday’s earnings call with Wall Street.

“It was a challenging quarter for personal computer sales across the industry,” said Maestri, stating the obvious.

Cook said that Mac sales “met our sell-in expectations” and added that he remained optimistic about Apple’s computer business, a sentiment a CEO is duty-bound to share. “We’re confident in our Mac business and our ability to continue to innovate and gain share in that area,” Cook said.

But Mac-generated revenue for the quarter was $5.1 billion, 9% lower than the same period in 2015, and the smallest amount recorded for the line in almost three years.

Macs accounted for 10.1% of Apple’s total revenue of $50.1 billion, but the computer group slipped to No. 3 on the company’s list, behind — by a country mile — the iPhone (accounting for 65% of all revenue) and, for the first time, the relatively new Services category, which contributed 11.8% of all incoming dollars.

 

 

 

Twitter Troubles Continue, Misses Revenue Estimates

April 28, 2016 by mphillips  
Filed under Uncategorized

Twitter Inc  disappointed investors once again with first-quarter results that revealed stagnant revenue growth as the microblogging service struggles to grab new users amid efforts to improve its complicated interface with several new features.

Twitter’s user base grew modestly to 310 million monthly active users in the quarter ended March 31 from 305 million in the fourth quarter, above analysts’ expectations. But investors were let down by the revenue miss since outlining a turnaround plan.

“It’s obvious Twitter is having trouble,” said Arvind Bhatia, analyst with CRT Capital. “It’s not growing anywhere close to where people expected a while back.”

On a call with analysts, executives said advertisers, especially in Europe, held back spending ahead of major events, including the Olympics and the European Champions League. They also said users were spending more time watching and sharing video, but that advertisers’ budgets had not yet shifted from legacy advertising products such as promoted tweets.

Chief Financial Officer Anthony Noto said Twitter’s long-term goal was to have “millions of advertisers like our competitors.” Facebook Inc has more than 3 million advertisers.

Twitter has struggled with stagnant user growth as its complex interface makes it less attractive to new users.

As part of its turnaround plan, the company has emphasized its live offerings, including live commentary and video streaming through its Periscope app, to attract new users. But it faces fierce competition from Facebook Inc  which has recently ramped up its live video product, Facebook Live.

Chief Executive Jack Dorsey said that talent recruitment was a top priority for the year, especially on the engineering and product teams. Twitter lost several top executives earlier this year and has since added two new board members and a new chief marketing officer.

The company forecast revenue of $590 million to $610 million for the second quarter. Analysts on average were expecting $677.57 million, according to Thomson Reuters I/B/E/S.

First-quarter revenue rose 36 percent from a year earlier to $594.5 million, but widely missed the average analyst estimate of $607.8 million.

 

 

Intel To Cut 12,000 Jobs As PC Market Slowdown Continues

April 21, 2016 by mphillips  
Filed under Computing

Intel Corp announced that it will eliminate up to 12,000 jobs globally, or 11 percent of its workforce, as it refocuses its business towards making microchips that power data centers and Internet connected devices and away from the declining personal computer industry it helped found.

Tech companies including the former Hewlett Packard Co and Microsoft Corp have reorganized in the face of the PC industry decline. Many new tech users around the world turn to mobile phones for their computing needs, and corporations increasingly rely on big machines rather than desktop models to run their businesses. Global personal computer shipments fell 11.5 percent in the first quarter, tech research company IDC said on Monday.

Intel, the world’s largest chipmaker, lowered its revenue forecast for the year. It now expects revenue to rise in mid-single digits, down from its previous forecast of mid- to high-single digits.

Most of Intel’s factories are in the United States, although it did not identify where cuts would be focused geographically. It said it would record a pretax restructuring charge of $1.2 billion in the second quarter and expected annual savings of $1.4 billion per year starting mid-2017.

The company also said Chief Financial Officer Stacy Smith will move to a new role leading sales, manufacturing and operations. Intel said it would begin a formal search process for a new CFO.

Smith said that Intel now expects the PC market to decline by a percentage in the high single digits in 2016 versus a prior forecast of a mid single-digit decline. Declines in China and other emerging markets are also leading to greater than anticipated reductions in worldwide PC supply chain inventory, Intel Chief Executive Brian Krzanich said on a conference call.