Apple should report another spectacular quarter, but tempered by growing caution over how supply constraints will squeeze margins and restrain iPhone and iPad sales.
Tops on the agenda will be the impact of Japan’s unfolding crisis on component prices and availability, while the spectre of Steve Jobs health and the uncertain timing of the next iPhone continues to hover in the background. Join us for a live chat at 5pm ET / 2pm PT after Apple reports its quarterly financials.
Intel forecast quarterly revenues well above Wall Street’s estimates despite a hiccup in sales of its Sandy Bridge processors after the discovery of a chipset design flaw and defying fears the world’s top chip maker is struggling to find its footing as personal computer sales growth wanes.
IBM raised its profit forecast as the tech giant released quarterly earnings ahead of Wall Street projections, citing strong sales of its mainframe computers and brisk business in emerging markets.
Yahoo posted quarterly earnings that topped Wall Street targets amid threats to the No. 1 provider of online display ads in the U.S. from Facebook and continuing pressure from search leader Google.
Research In Motion’s much vaunted PlayBook tablet got off to a quiet start in North America on Tuesday.
After leaving an empty Staples midtown Manhattan store at about 7:15 AM, we hit the nearby Office Depot. It had no customers looking for the device. In fact, it was hard to tell Office Depot was even selling PlayBook at all until a store employee directed us to the basement.
It took a while to find the PlayBook display among the other office supplies.
Once we found it, the display itself wasn’t very impressive, just a basic promotional sign. In fact, the store said that RIM had yet to send it a demo unit.
Apple sued rival Samsung Electronics claiming that Samsung’s Galaxy line of mobile phones and tablet “slavishly” copies the iPhone and iPad, according to court papers. The lawsuit, filed on Friday, alleges Samsung copied the look, product design and product user interface of Apple’s products. Samsung violated Apple’s patents and trademarks, the suit alleges.
Twitter is in talks to buy TweetDeck for around $50 million, The Wall Street Journal reported. TweetDeck is an add-on program that helps Twitter users view and manage their tweets and messages on other services such as those offered by Facebook and Foursquare. Twitter has allowed advertisers’ “promoted tweets”, that show up when users perform searches on Twitter, to appear on TweetDeck as part of a revenue-sharing agreement, The WSJ wrote.
Texas Instruments’s quarterly earnings missed Wall Street expectations by a penny as expenses rose after two of its Japanese factories were damaged in the country’s largest-ever earthquake. The company, which plans to buy analog chip maker National Semiconductor Corp for $6.5 billion, said one of its factories will “soon” resume full production, and added that it expects a strong second half.
Google’s stunning 54 percent spending surge spooked investors already worried its new CEO Larry Page may take his eye off the bottom line to chase revenue growth, driving its shares more than 5 percent lower. Investors zeroed in on the stunning surge in expenses to $2.84 billion, which dwarfed a 29 percent jump in net revenue and reflected a record hiring spree, company-wide salary raises, and splurging on everything from marketing to technology. “If the expenses are targeted and result in future revenue streams, then good for Larry. If not, that results in an undisciplined spending approach”, said Colin Gillis, analyst at BGC Partners.
RIM’s PlayBook tablet bombed with influential technology reviewers calling the new iPad competitor a rushed job that won’t even provide RIM’s vaunted email service unless it’s hooked up to a BlackBerry. “RIM has just shipped a BlackBerry product that cannot do email. It must be skating season in hell,” New York Times’s David Pogue wrote. Even though the odd system on the PlayBook, aimed at pleasing security-concerned corporate customers, “is a neat technical feat, it makes the PlayBook a companion to a BlackBerry phone rather than a fully independent device,” wrote The Wall Street Journal’s Walter Mossberg.
Suppliers to Apple began production of white iPhones after a delay of almost 10 months, pointing to a launch date of within a month, two people familiar with the situation said.
HTC launched the HTC Sensation, offering an entire library of movie and TV shows via a wide screen, with a fast 1.2GHz processor. While Nokia, which dumped its once-dominant Symbian software earlier this year after falling behind Apple in the high-end handset market, launched two new models improved with better text input, faster Internet browsing and a refreshed Ovi Maps application, in a bid to stem customer defections while it works on a new offering.
“The new HTC Sensation phone reflects the mountain Nokia needs to climb to close the hardware and software gap with its rivals,” said Ben Wood, research director at CCS Insight. “On the day Nokia unveils the 600Mhz X7 ‘entertainment phone’ it has been trumped by HTC’s Sensation which has a dual-core 1.2Ghz processor”.
Cisco Systems will dump its Flip video camera division, retiring the popular brand rather than selling it in a first step toward reviving a company CEO John Chambers admits has lost its way. The decision to nix Flip, along with a planned folding of its Umi home videoconference business into the more successful TelePresence arm, underscores Chambers’ need to whittle down a money-losing consumer division that also includes Scientific Atlanta set-top boxes and Linksys home routers. Among the steps announced, Cisco plans to combine its lackluster Umi service with its TelePresence system for corporate clients. The company will also change the way it manufactures its Linksys line of networking equipment.
Apple’s iPhone 5 isn’t expected to hit the market until Christmas or early next year, according to Business Insider’s Jay Yarow. Avian Securities said in a note, based on conversations with a “key component supplier” to Apple, that the the iPhone 5 should go into production in September and that Apple could also be developing a lower price/lower spec iPhone model, Yarrow writes.
The $214 billion cellphone industry is bracing for a hit to its supply of components as top phone makers get set to report quarterly earnings next week. “We believe the shortages will start to bite in the third quarter, when we’ll get a clearer picture of who is most affected,” said Ben Wood, head of research at CCS Insight.
On average analysts expect global cellphone sales volumes to have grown 10.8 percent in January-March, according to 18 analysts in a Reuters poll. The phone market has recovered from a slump in 2009, but growth is expected to have peaked in the first half of 2010, with a slowdown to 9 percent forecast for 2011, the Reuters poll showed.
Apple co-founder Steve Wozniak told Reuters he would consider returning to take an active role at the consumer electronics giant. Wozniak, a lifelong hands-on engineer, said he liked technology to be relatively open so that he could add his own touches. “My thinking is that Apple could be more open and not lose sales,” said Wozniak, but added: “I’m sure they’re making the right decisions for the right reasons for Apple.”
The Justice Department approved Google’s purchase of ticketing software company ITA Software as long as Google licensed the software to rivals, continued to upgrade it and created firewalls to hide ITA clients’ proprietary information. Google said it would soon bring out a new travel search tool.
Google CEO Larry Page moved to streamline decision-making at the company’s key social network, mobile, Internet software and YouTube product groups. Social networking chief Vic Gundotra, Android head Andy Rubin, Chrome senior vice president Sundar Pichai and YouTube head honcho Salar Kamangar were given a direct reporting line to Page and greater autonomy, according to a source familiar with the matter.
Growing demand for phones running on Google’s Android platform will help the smartphone market grow in 2011, boosting companies like HTC and Samsung who are betting on the platform, analysts said.
The smartphone market will grow 58 percent this year and 35 percent the next, research firm Gartner said. Android, a distant No. 2 to Nokia’s Symbian platform just last year, will increase its market share to 39 percent in 2011, while Symbian’s share will roughly halve to 19 percent following Nokia’s decision to dump the platform. Apple’s iPhone platform will be slightly bigger than Symbian this year, while Research In Motion will control 13 percent of the market and Microsoft Windows Phone 6 percent.
Sales of cameraphones will grow to more than 1 billion handsets this year, helped by fast growth at the high end of the market, Strategy Analytics said.
YouTube is working on a major site overhaul to organize its content around “channels” as it positions itself for the rise of Internet-connected TVs that allow people to watch online video in their living rooms, writes the WSJ’s Jessica Vascellaro and Amir Efrati. Changes to the homepage will highlight sets of channels around topics such as arts and sports and approximately 20 “premium channels” will feature 5 to 10 hours of professionally-produced original programming a week, according to a Vascellaro/Efrati source.
Dish Network won Blockbuster in a bankruptcy auction for $320 million, further broadening its business beyond satellite TV and setting up a possible showdown with Netflix. The deal covers “substantially all” of the rental chain’s business, and likely gives Dish the rights Blockbuster had to stream movies over the Internet, the Blockbuster brand name and customer lists.
A Deutsche Bank estimate that 100,000 Motorola XOOM units were sold over its first two months means the tablet was a flop, writes Business Insider’s Jay Yarow. For comparison, Apple sold 300,000 iPads on the first week weekend it was available. BetaNews’s Joe Wilcox calls the XOOM a surprising success, noting that the tablet came to market with “huge handicaps, all of which make comparisons to iPad 2 unrealistic”. Wilcox says higher pricing has been the main deterrent to buying a XOOM.
