Under The Radar News - Thursday

NAND market in trouble after Apple slashes order estimate. iSuppli cut its global NAND flash outlook to single-digits, down from 27% revenue growth, due to waning consumer confidence amid a U.S. subprime mortgage crisis. "Unless the economy recovers vigorously later this year, last year's DRAM market disaster could be repeated in NAND this year," it says. iSuppli notes Apple (AAPL), the world's number-three NAND buyer for its flash-based iPods, slashed its NAND order forecast significantly.

Adobe/Apple relationship deteriorating. "No one aside from Steve Jobs has any idea if or when it's coming," says an Adobe (ADBE) spokesman about iPhone support for its Flash player, a comment that highlights the companies' strained relations. It's possible Apple (AAPL) will roll out Flash compatibility with a software tools update at the end of the month. Then again, it's also rumored Apple is developing a competing technology that aims to break Adobe's stronghold on the cellphone industry.

Cars with iPod decks. Apple (AAPL) may be licensing its iPod click-wheel and OS to automakers in future models. "Imagine a steering wheel with an iPod click wheel in the center to scroll through thousands of songs in seconds - or play movies and podcasts through the rear headrests." A source says Apple is marketing the concept to 'several' auto makers... CDs, DVDs and tape decks could soon be replaced with built-in iPods.

Yahoo/Microsoft: Matter of time. M&A bankers say Microsoft (MSFT) will give Yahoo (YHOO) a couple of weeks to pursue its going-nowhere talks with other suitors, after which it will likely offer an 11th-hour price concession that may not boost the price due to the fact its $31/share offer is now only worth $28.80. Even at $32-33/share, a deal will expose Yahoo to lawsuits after CEO Jerry Yang said $31 "substantially undervalues" the company.

Asustek moving to AMD chips? Industry sources speculate Asustek is planning to support both Intel (INTC) and AMD (AMD) platforms after rumors emerged of a big order for AMD Sempron CPUs. Some say the firm ordered as many as 1 million units. There is, however, a possibility that the whole rumor is a ruse by Asustek to remind Intel there are other fish in the CPU sea.

Intel likes AMD better than Nvidia. Sources say Intel (INTC) is refusing to give Nvidia (NVDA) a vital piece of CSI (common system interface) code, and may be favoring rival AMD (AMD), which now owns Nvidia rival ATI.

Mastercard hits auction-rate security wall. From MasterCard's (MA) 10-k: "Starting on February 11, 2008, the company experienced difficulty in selling additional securities due to the failure of the auction mechanism which provides liquidity to these securities... There may be no effective mechanism for selling these securities, and the company may own long-term securities. As of February 15, 2008, the company had approximately $252,000,000 of auction rate securities and... it does not believe such securities are impaired or that the failure of the auction mechanism will have a material impact on the company's liquidity."

Google buying Ukrainian portal? Sources say Google (GOOG) is acquiring Ukrainian net portal Bigmir)net for $100 million. Bigmir)net is the Ukrainian version of Mail.ru, a $1 billion site in which it is rumored Google was interested but missed out. Bigmir)net reported revenues of $15 million in 2006.

Hovnanian: We can make it through this. Hovnanian (HOV) CEO Ara Hovnanian said the company has the ability to survive a housing market turndown, even if it extends into 2009. In an interview with Bloomberg TV, Hovnanian said the company would be a net borrower, barely, in the first half of the year. However, 2008 will clearly be a tough year for the company, he said, and noted taking itself private is "a consideration." Hovnanian said he's seeing higher traffic, which may result in more sales, possibly a result of Fed rate cuts and liquidity increases.

Shareholder overlap - advantage BHP. The fact that 50-60% of BHP Billiton's (BHP) and Rio Tinto's (RTP) shareholders own stakes in both companies may give an advantage to BHP as it tries to convince investors to accept its $143B takeover bid, as overlapping investors are unlikely to care how much money goes from one pocket to the other. Rio executives are traversing the globe trying to convince stakeholders the company is better off on its own, though many wonder why it refuses to at least talk with BHP.

Rio Tinto, BHP want more than 65% increase for iron ore. Rio Tinto (RTP) has indicated it is not satisfied with the 65% iron ore price increase negotiated by Vale (RIO) and Posco (PKX). If it doesn't back down, this may be the beginning of the end for iron ore's benchmark system, under which global iron ore prices follow prices set by Vale, Rio Tinto and BHP Billiton (BHP), who together produce almost 3/4 of the world's iron ore. Rio contends Asian steel mills are saving money due to its proximity to them, and wants a piece of their savings. There are rumors BHP will also hold out for more.

Chinese sports brands nip at Nike's heels. Global sportswear makers Nike (NKE) and Adidas are facing stiff competition in China from homegrown manufacturers who many say have a better understanding of the domestic market. Bolstered by strong sales in China, Chinese sports brands are now aggressively targeting sales growth in the U.S., Middle East, and South America. Analysts say sportswear is a good way for investors to benefit from China's surging consumer boom.

Iona courted by Software AG. German business-software developer Software AG has indicated to Iona Technologies (IONA) that it is willing to make a formal offer to buy the company ($3.35) for more than $4/share.

Flat panel TV demand: Anything but flat. Demand for flat panel TVs will more than double to 180 million units by 2012, according to the Japan Electronics and Information Technology Association. Demand for plasma TVs will grow to 25M in 2012 from 11.4M in 2007. The flat panel market is lead by Samsung and Sony (SNE); Matsushita (MC) controls 33% of the plasma market.

Insiders cash out of Amazon. Amazon (AMZN) CEO Jeff Bezos sold $135 million (1.85M shares) of the company's shares last week, his first sale since 2004. Six other insiders sold a combined 130,005 shares. All told, the sales are worth almost 15% of the $1B repurchase AMZN recently announced. Bezos still holds 99.3 million shares.

Social networks: Falling from a high place. Facebook saw its first monthly drop in UK users, 5% less of whom visited the site in January. "Most of the leading social networks are less popular in the UK than they were a year ago. It was inevitable that early growth rates couldn't be sustained and the larger networks have been plateauing over the last few months," Nielsen analyst Alex Burmaster says. Mind you, Facebook's UK audience is still 712% bigger than a year ago.

ConAgra's U.S. brands flop abroad. Food giant ConAgra (CAG) is scaling back its Asia and Europe operations amid disappointing sales. ConAgra products like Orville Redenbacher's popcorn, Slim Jims and Chef Boyardee have translated poorly to international markets; operating profit in the company's international foods division fell 21% in its recent quarter.

Glaxo due for bounce - Barron's. Barron's says GlaxoSmithKline (GSK) could rebound given its solid pipeline and a recent stake by Berkshire Hathaway (BRK.A). Glaxo has 34 products in late-stage development and is cutting costs. At 11.5x 12-month profit targets, shares trade at a 27% discount to the broad market and most Big Pharma companies.

Comments

[daffy:]

Well, Jim seems to have his grundies in a bunch.

I think an approriate thing to say is that I would have something to say about AAPL carousing it's way to depths of bankruptcy because you see, I despise AAPL and there is nothing that would make me happier. I hate the lack of ingenuity, and the over marketing of simpleton ideas, and the eternal wisp of desperation that echoes from their every move. Come on, let's put an ipod on the steering wheel so people have a scroll list to look at while they drive, make sure you have a connect so you can plug in your iPhone too while you scroll through your playlist. That ought to save at least 5-10,000 lives a year from living in this hell where AAPL makes pandering around in the darkness look like child's play.

You asked for it Jim.

And you deserve it.

Over priced and way over valued, just like their stock. I should say grossly over valued.

2008 Feb 21 06:25 PM

[JIM:]

Anti-Apple basher's site.

2008 Feb 22 07:10 AM

[SA Editor E...:]

"Anti-Apple basher's site." Not at all. We only ask that you keep comments civil and avoid racial slurs.

2008 Feb 22 07:18 AM

[JIM:]

You specialize in half-truths.

2008 Feb 22 07:23 AM

[JIM:]

Learn the difference between race and religion, Eli.

2008 Feb 22 07:47 AM