Tag Archive | "morning"

Nokia Refutes Talk Of Microsoft Sale; Ticonderoga Likes It

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Shares of Microsoft (MSFT) have been under pressure this morning, and one thing appearing to contribute to downturn are rumors the company would step in to purchase Nokia (NOK) for $19 billion, according to remarks by Eldar Murtazin, a blogger widely credited with scooping Microsoft’s deal with Nokia earlier this year.

Murtazin’s blog appears not to have that claim today, but he is cited as stating such by Todd Haselton in a piece this morning on BoyGeniusReport.

A Nokia spokesperson, however, tells The Wall Street Journal’s Christopher Lawton a short while ago that, “These rumors are completely baseless.”

Murtazin has speculated as recently as May 16th that the two companies were talking about a deal.

Microsoft shares are down 54 cents, or 2%, at $24.47.  Nokia shares are down 34 cents, or almost 5%, at $6.68.

Well, at least one believer this morning is Brian White with Ticonderoga Securities, who follows Apple (AAPL) and has a Buy rating and a $612 price target on that stock.

“We believe reports from Boy Genius highlighting the potential for a Microsoft purchase of Nokia for $19 billion should provide Apple investors with even greater confidence that the company can continue to gain market share at the expense of legacy vendors in the mobile phone market,” writes White.

“In our view, Apple investors could not ask for a better deal, and we believe a transaction would only further Apple’s market share gains in the coming quarters.”

Sounds like White is choosing his words carefully, but it also sounds like he believes the rumor.

Article courtesy of Tech Trader Daily

Polycom Buys HP’s Video Conference Biz

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Shares of videoconferencing technology maker Polycom (PLCM) are up $1.34, or 2%, at $58.75, after the company this morning said it would purchase from Hewlett-Packard (HPQ) the company’s “visual computing” assets for $89 million, to add to Polycom’s unified communications business.

The HP products have not been part of the main segments of HP’s business — the personal systems group, services, enterprise, software, and imaging and printing. Instead, they have been contained within the segment of the business dubbed “Corporate Investments,” which also contains the company’s networking equipment products, and its Palm computer assets.

Polycom will also serve as an “exclusive partner” to HP for “telepresence” and “unified communications.” Polycom will also provide video applications for the forthcoming WebOS-based devices HP is developing from its Palm acquisition. Those devices include the TouchPad tablet computer that many expect will go on sale in coming weeks.

Polycom said the deal would be “slightly accretive” to its earnings immediately upon closing the deal.

HP shares are down 42 cents, or 1%, at $36.96.

Article courtesy of Tech Trader Daily

Apple: iCloud To Increase iTunes Value, Says Sterne Agee

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Following word from Apple (AAPL) yesterday morning that the company will discuss its “iCloud” initiative next week at its Worldwide Developer Conference in San Francisco, Sterne Agee’s Shaw Wu this morning writes that the service is “a very big deal,” with the potential to further enhance the utility of the company’s iTunes program.

“We believe reaching cloud music deals would be a great start and further distance AAPL from GOOG, AMZN, MSFT, and others, which in the last 10 years or so have failed to put even a minor dent to iTunes.”

Wu maintains a Buy rating on Apple shares and a $460 price target.

Apple stock this morning is up $3.39, or 1%, at $351.22.

Article courtesy of Tech Trader Daily

RIM: Engadget Sees 4G PlayBook On Track

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Engadget’s Terrence O’Brien this morning speculates that a new version of Research in Motion’s (RIMM) “PlayBook” tablet computer with 4G wireless links could be on the way for the summer, as expected, based on Google search results for the phrase “Sprint PlayBook.”

Such as search comes up with links with provocative titles such as “Sprint | Introducing the BlackBerry 4G Playbook Tablet,” although said links actually lead to nondescript pages.

Article courtesy of Tech Trader Daily

FIRE: Citi Starts At Buy; Cisco, Juniper Distracted

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Citigroup analyst Walter Pritchard this morning initiated coverage with a Buy rating on shares of SourceFire (FIRE), the maker of computer network intrusion prevention software and hardware, writing that the explosion of mobile devices is increasing the need for “countermeasures” in cyber-security.

The competition, Cisco Systems (CSCO), Juniper Networks (JNPR), and McAfee, which Intel (INTC) just bought, is distracted, he writes: “Leader Cisco continues to have challenges and Juniper appears incrementally more network-focused. McAfee was an aggressive competitor in end-point and network security, but we already see early signs of execution woes. We expect these trends will benefit smaller, more focused players such as FIRE.”

SourceFire has upside as a take-out target, he writes, and he set a $32 price target. Pritchard started coverage of competitors Websense (WBSN) and Fortinet (FTNT) with a Hold rating, and price targets of $25 and $52, respectively.

Websense is having trouble executing lately, which means there may be little upside to Street numbers, he thinks. And Fortinet’s stock is rich, and expectations for the company are already high.

This morning, SourceFire shares are up $1.34, or 5%, at $26.42, Websense is up 23 cents, or 1%, at $24.49, and Fortinet is up 49 cents, or 1%, at $48.35.

Article courtesy of Tech Trader Daily

NOK Drops 15%: ‘Burning Platform’ Sinking

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Straight shot down for Nokia this morning; where’s the bottom?

Shares of Nokia (NOK) are down 90 cents, or 11%, at $7.30 $1, or 12.2%, at $7.20 $1.28, or almost 16%, at $6.91 this morning after the company this morning warned the current quarter is tracking much worse than it had expected, andsaid it could no longer off a full-year forecast, citing “multiple factors” that are “negatively impacting” its business.

The “burning platform” to which CEO Stephen Elop famously referred several months ago, is in effect sinking, at least for the moment.

Nokia sees adverse “competitive dynamics and markets trends across multiple price categories, particularly in China and Europe,” the company said. Then, too, it is selling more devices at lower prices and at lower gross profit margin. The company said it is also being subjected to “pricing tactics by Nokia and certain competitors.”

Subjected to its own pricing tactics? Hoisted on its own petard, I guess.

Nokia said it expects Q2 “devices & services” revenue will be “substantially below” the prior range of €6.1 billion to €6.6 billion. Operating margin will also miss the 6% to 9% Nokia had offered. In fact, the operating margin “could be around break-even.”

Nokia removed a target for Q3 devices and services sales to be even with Q2, and to rise in Q4, saying those targets were “no longer valid.”

Nokia said it would accelerate its attempt to trim €1 billion in annual operating expenses, and said that its development of its first phone using Microsoft’s (MSFT) operating system is going well, and that the device should ship in Q4 of this year. That may be somewhat earlier than some had expected.

Update: MKM Partners analyst Tero Kuittinen this morning send a missive to re-emphasize what he’d said a little over a week ago, which is that Nokia is seeing less and less support from some carriers, and that this is leading to “rock-bottom pricing.”

N8 sales are eroding rapidly and that some of the steeply discounted deals offered by leading carriers imply that this flagship model, launched last October, is now being phased out.”

Basically, it’s the Android invasion:

European rollouts of the Samsung Galaxy S2, Sony Ericsson Arc and HTC Desire HD seem to be proceeding notably strongly over the past two weeks. In our view, even second-tier Android launches like Sony Ericsson Play and Samsung Galaxy Fit are having better launch traction than carriers had anticipated. The Samsung Galaxy S2 seems to be matching iPhone sales at Orange and Vodafone.

Update 2: Jennifer Fritszche with Wells Fargo reports from the conference call with management this morning. She finds it interesting that the real problem Nokia is up against is Android, not Apple’s (AAPL) iPhone.

“Impact seen in both feature and smartphones – but given the fact it called out specific regions of Europe and China, NOK’s CFO indicated that more of smartphone contribution from these 2 regions,” writes Fritszche.

CEO Stephen Elop indicated that Android players, particularly in CDMA, have been disruptive and are taking market share. While NOK did not mention any specific manufacturers, we note [Motorola Mobility (MMI)] has historically been quite strong in CDMA and has been building its presence in China.”

Update 3: Analysts are starting to adjust numbers — see the note today from Gleacher & Co. Some are warning that things will have to get worse, and that estimates are bound to go lower, before Windows-based devices help improve the outlook.

Article courtesy of Tech Trader Daily

Intel: Piper Sees Broad Bid For Foundry Work

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Piper Jaffray semiconductor analyst Gus Richard returns this morning with a contention he’s made over the last several weeks, namely that Intel (INTC) is scouting for foundry business to fill its fabs.

Over the last few months we have been hearing comments from industry contacts that Intel is talking to OEMs about a foundry relationship. We have heard Intel is looking for ASIC designers and other support staff for this effort. More recently, we understand Intel has approached Motorola. Currently, we believe Motorola has been working with Toshiba as an ASIC/foundry vendor for cell phone components. We believe the direct-to-OEM foundry model makes sense. Likely target customers would include EMC (EMC), Cisco [Systems (CSCO)], Juniper [Networks (JNPR)], Sony (SNE), Motorola [Mobility (MMI)], Apple (AAPL), Nokia (NOK), and other large customers of leading edge logic. Intel has clearly articulated they are interested in working with companies that want to use x86 architecture. The company is not interested in enabling its fabless competitors or ARM [Holdings (ARMH)].

Interestingly, there’s something of a standoff forming: Intel doesn’t have a history designing ultra-low-power chips, which is what’s needed for mobile. Its design methodology for system-on-a-chip (SOC) is “archaic,” Richard observes.

But Taiwan Semiconductor Manufacturing (TSM), and other foundries, don’t have the expertise of Intel in getting to the next level in process technology. Richard asks, “will Intel learn how to design its way out of a PC or will the foundries overcome the process complexity?”

Intel shares this morning are up 29 cent, or 1.3%, at $22.50.

Article courtesy of Tech Trader Daily

Apple: Foxconn Allays Explosion Concerns, Says China Times

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There’s no official word from Apple (AAPL) regarding the reported explosion Friday at one of the facilities of its main manufacturing partner, Foxconn Technology Group, where some iPad production reportedly takes place.

An article late yesterday in the Chinese language China Times paper cites the company saying that there will be no delay in its iPad 2 production from the incident, apparently saying that the assembly line itself was not affected, just the “warehouse” and “painting production line.”  (Google translation here.)

An article in DigiTimes this morning by Yenting Chen and Jessie Shen notes that Foxconn had only just begun production of the iPad 2 at the Chengdu facility. The Chengdu produced 25% to 30% of all iPads in April, the authors write, citing “sources at upstream component suppliers.”

This morning, Brian White with Ticonderoga Securities writes that because Foxconn’s parent, Hon Hai, can shift production to its Shenzen facility, where the bulk of iPad 2 production happens, there is unlikely to be any material impact to iPad 2 production.

“Keep in mind, Hon Hai has been expanding its manufacturing presence in Western China to cities such as Chengdu,” writes White. “However, Hon Hai’s main production location remains in Shenzhen, where we believe the company produced the iPad 1 and iPad 2 before shifting some iPad 2 production to Chengdu.”

Apple shares today are actually faring a bit better than the market, down $3.84, or 1%, at $331.38.

Article courtesy of Tech Trader Daily

Sony Slips: Revises FY Results For Japan Impact

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Shares of Sony (SNE) are down $1.07, or almost 4%, at $25.98, after the company this morning slightly cut its full-year results, originally reported in preliminary fashion back on February 3rd, to 7.181 trillion yen, from an original forecast of 7.2 trillion yen, citing the earthquake and tsunami in Japan in March.

The company also said it would report a 260 billion yen loss for the quarter, versus an initial expectation for profit, to reflect a “valuation allowance” against deferred tax assets in Japan.

Sony said it will report slightly less operating income, at 253 billion yen, versus an original 260-billion estimate, to reflect restructuring charges.

Article courtesy of Tech Trader Daily

Short LNKD? FT Adds To Negative Barron’s Piece

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Shares of LinkedIn (LNKD) are down $6.47, or almost 7%, at $86.62 this morning, after steep gains on Thursday and Friday of last week, the stock’s first two days of trading.

Over the weekend, my colleague Andrew Bary wrote that the company would have a hard time growing into its stock valuation, fetching around 20 times possible 2011 revenue of $400 million.

A skeptical article appears as well this morning by Financial Times’s Michael Mackenzie and Telis Demos, who write that the stock is “expected to come under downward pressure this week, as they attract the attention of aggressive traders who are prepared to bet on a fall in the business network’s stock price.”

The authors cite remarks by, among others, Nicole Sherrod with TD Ameritrade who cites the “trending” interest in selling short LNKD. One hitch: the 9 million-share float, out of 94 million shares outstanding, could make borrowing difficult for shorts. Restrictions on shorting LNKD will be lifted tomorrow.

Article courtesy of Tech Trader Daily