Tech wrap: Netflix sees subscriber slowdown

July 25, 2011

Netflix says it’s expecting its subscriber growth in the United States to slow in the coming quarter. The warning to investors came as the popular video rental company also reported second-quarter revenue that missed Wall Street expectations. The double-shot of bad news sent the company’s shares down about 9 percent in late trading.

BlackBerry maker Research in Motion delivered on a promise it made last month to pare back its global workforce  . . . and then some. The Canadian company announced it is laying off 2,000 staffers – or 11 percent of its workforce – in an effort to cut costs and offset sales declines in the mobile market, which is increasingly dominated by Apple and Google. Analysts are split on whether the cost cuts will do much to help the firm regain a competitive position. “The problem is you can’t cut your way into growth or market leadership, and while I’m sure there was fat at RIM, the core problem sits squarely with management,” Ed Snyder from Charter Equity Research told Reuters. Another analyst, however, argued that the cuts were a necessary step for RIM as it adjusts to a “new growth, or sales, reality.”

In addition, RIM announced a number of changes to the roles and responsibilities of some of its senior managers. Most notably, the company said one of its three chief operating officers, Don Morrison, is retiring and that his responsibilities would fall to the remaining two, Thorsten Heins and Jim Rowan. As AllThingsD points out, though, the changes fail to address shareholder concerns that the real shakeup needed is at the very top with Mike Lazardis and Jim Balsille, who share CEO and chairmen duties.

Management changes are underway at AOL as well. Jeff Levick, the company’s top advertising executive, will be leaving the Internet firm after a six-week transition period as part of AOL’s effort to turn around its advertising sales. Ned Brody, who is in charge of the company’s advertising network, was promoted to chief revenue officer. During the first quarter, AOL’s Internet display advertising — big splashy ads on web pages — rose for the first time in three years, although its overall advertising revenue fell.

Texas Instruments, warning of economic uncertainties, forecast only modest sequential growth in the current quarter. For the second quarter TI earned $672 million, or 56 cents per share, compared with $769 million, or 62 cents per share, in the year-ago quarter. Revenue fell to $3.46 billion from almost $3.5 billion and was slightly ahead of analysts’ consensus forecast.

Apple’s booming Asian business seems set to grow even bigger as the country’s No.1 and No.3 telecom operators jostle to stitch up deals to sell iPhones in the world’s largest mobile phone market, argue Reuters correspondents Lee Chyen Yee and Huang Yuntao in a new piece. Apple’s Chief Operating Officer Tim Cook said last week that the maker of the iPhone and iPad was merely “scratching the surface” in China. Smartphones still account for a fraction of China’s total market, which is home to more than 900 million subscribers.

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