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Gregory Gambone is Senior Vice President of a small New Jersey financial advisory firm. His expertise is in corporate investment management and employee benefits. He has been writing since 1997 and released his first book, "Financial Planning Basics," in 2007. He earned a Bachelor of... More
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  • Samsung Looks To Boost WiFi Speeds By 5x

    Perhaps one of the most touted and sought-after characteristics of modern electronics is speed. The power of new smartphones, tablets, and computer processors continues to be both a major selling point and the focal point of critical reviews. To that end, Samsung (OTC:SSNLF) announced last month that it has developed new Wi-Fi technology capable of delivering jaw-dropping data transfer speeds.

    According to a post on the company's official global blog, Samsung has successfully achieved Wi-Fi "data transmission speeds of up to 4.6Gbps, or 575MB per second, a five-fold increase from 866Mbps, or 108MB per second, the maximum speed possible with existing consumer electronics devices." By utilizing the currently-unlicensed 60GHz spectrum and "the world's first micro beam-forming control technology," Samsung claims to be able to dramatically boost wireless speeds over the current 2.4GHz and 5GHz standards.

    Who Might Actually Need Such Speeds?

    While lab experiments and controlled-environment testing have proven successful, devices utilizing the 60GHz spectrum are only capable of sustaining these faster speeds over short distances, typically no more than 15 feet. Therefore, this technology is not intended to replace existing traditional wireless internet services, but rather to create an area within a network where data transfer rates are significantly improved. This limitation essentially reduces the capability of Samsung's new Wi-Fi advancement, but it is by no means without application potential.

    Most likely, Samsung's WiGig technology will be aimed more at the enterprise market, not individual consumers. The possible advantages of a 575Mb-per-second data transfer rate are more easily applied to industrial settings and medical facilities. This means that the next iteration of the Samsung Galaxy smartphone might not possess WiGig capabilities, but we can expect to start seeing other electronic devices with the capability offered to the enterprise market at some point in 2015.

    The company hinted at applications involving audio and video devices, medical equipment, and home automation systems, as well as a general reference to the Internet of Things. "[Worldwide] commercialization is expected as early as next year," and Samsung aims to secure its position as a pioneer in the advancement of wireless technology.

    Reading Between the Lines

    What Samsung's announcement did not mention, however, is that use of the 60GHz frequency is not its own original idea. In 2011, the Wi-Fi Alliance revealed that it had been working with "WiGig" data transfers using 60GHz, and described similar use cases and possible applications. So, Samsung did not invent a new kind of Wi-Fi, but rather devised a way to implement experimental new technology in a stable, usable manner.

    What's the Relevance for Investors?

    Samsung's announcement might not move the needle, but the release of an actual product with WiGig capability will definitely shake things up a bit. The future of digital technology is all about speed, and if Samsung releases a line of devices capable of transferring 1Gb of data in less than three seconds, people are going to be excited. There is no doubt about the fruition of WiGig technology, especially considering Samsung's impressive $14 billion R&D budget, and the company's need to stem deteriorating sales figures.

    On the fundamental side, Samsung has a market capitalization of over $167 billion, price-to-sales ratio of 0.79, price-to-earnings ratio of 6.1, and profit margin of 12.89%. Paired with a few simple technical indicators like standard deviation of 2.03, mean deviation of 0.8, and variance of 4.11, Samsung is a strong buy across the board for long-term investors.

    The company's year-over-year change in revenue and earnings is better than the average of its competitors. Additionally, ROI -- both current and over the past five years -- indicates that its relatively high operating returns are sustainable, despite the estimated 60% decline in operating income and 20% decline in sales for the third quarter, compared to the same quarter a year ago.

    Conclusion

    Share prices will not remain at the current lows for very long, as the Korean electronics developer has undoubtedly pulled out all stops with respect to R&D and WiGig innovation. That being said, consider Samsung's currently-depressed share price an ideal long-term buying opportunity.

    Tags: SSNLF, technology
    Nov 03 8:27 PM | Link | Comment!
  • One Surprising Way The Auto Industry Is Threatening Wireless Communications

    Despite a slew of legislative and regulatory changes in recent years, the auto industry is still responsible for a significant portion of carbon dioxide emissions. Over the decades, those emissions have contributed to the buildup of greenhouse gases. We've all read about how this affects climate change. But it also creates problems for wireless carriers -- and their customers.

    The stats
    According to a 2010 study by NASA's Goddard Institute for Space Studies, "on-road transportation is and will be the greatest net contributor to atmospheric warming." Vehicle emissions are expected to remain No. 1 until at least the year 2050, when it is expected that "electric power generation overtakes road transportation as the biggest promoter of warming."

    The Center for Science and Democracy says that "transportation generates nearly 30% of America's global warming emissions." The average car sends six tons of carbon dioxide into the atmosphere, the Union of Concerned Scientists says.

    Biofuels, electricity, and hydrogen present possible alternatives to traditional gasoline, and major auto manufacturers like Ford (NYSE:F) have supported these efforts with development of electric cars and "flexible-fuel" vehicles that can run on various blends of gasoline and biofuel. John Viera, Ford's global director of sustainability, told me that Ford has "invested billions in research and product innovation toward advanced fuel technologies" and wants "climate science to be our foundation to determine our CO2 targets for fuel economy and fuel sources from now into the next century."

    The push for more fuel-efficient autos and the increasing popularity of hybrids and all-electric cars, like the Tesla (NASDAQ:TSLA) Model S, demonstrate a growing awareness of the need to reduce carbon emissions. Tesla is aiming to produce 35,000 vehicles this year and 100,000 in 2015, and it looks to be on track to meet or exceed those goals.

    Effects of climate change on wireless signal transmission
    With respect to electronics, attenuation -- referred to in the telecommunications industry as path loss -- is the deterioration in strength, or amplitude, of a signal resulting from its passage through or around various media -- terrain contours, walls, floors, the human body, and even moisture in the air.

    Conversely, satellite signals mostly deal with weather-related impediments. DirecTV (NASDAQ:DTV) currently owns a fleet of 11 satellites that beam more than 150 HD channels to 39 million subscribers, according to the company's second-quarter report, and those satellites broadcast across a range of powerful frequencies to overcome adverse weather conditions.

    In May 2013, the Journal of Geophysical Research published a report describing "an intriguing connection" between temperatures and the intensity of wireless signals in the atmosphere. Shortly thereafter, additional research concluded that global warming reduces the strength of long-wave communication signals. Simply put, greenhouse gases warm the lower atmosphere, but have an opposite effect higher up, which "contracts and descends into the atmosphere to where air is denser -- leading to a higher absorption of radio waves."

    Since satellite TV and Internet signals are microwave radio frequencies beamed through these layers, excessive moisture in the air -- particularly heavy rain and storms -- can interrupt and even completely block signals. According to the International Journal of Image, Graphics and Signal Processing, or IJIGSP, "optical wireless links are highly weather dependent" and "are also influenced by atmospheric temperature." IJIGSP also states that "optical turbulence" and variations in temperature cause power fades that reduce the strength and effective distance of these wireless signals.

    Use of optical wireless communication technology is widely accepted as the best method for high-bandwith data transfer, but "has been hampered by the potential downtime of these lasercom systems in heavy, visibility-limiting weather," IJIGSP noted. Essentially, as global climate change results in more precipitation, more frequent and severe thunderstorms, and increasing average temperatures, the effectiveness of wireless signals will continue to be negatively affected.

    Who will pay the price?
    Increased costs to produce or provide products and services will eventually be passed on to consumers. As automakers are forced to comply with regulatory changes and legislation, the cost of research and development necessary to build environmentally friendly vehicles will ultimately result in higher prices. General Motors (NYSE:GM) has reportedly invested in excess of $1 billion over the past few years to further development and manufacturing of lighter, more powerful, fuel-efficient engines. Ford reportedly invested $1.1 billion to retool an assembly plant in Kansas City, and $500 million to move a plant from Mexico to Ohio after adding a new flexible-engine assembly system.

    Similarly, if more powerful satellites and cellular antennae must be developed, or new technology devised for penetrating increasing atmospheric anomalies, expenses incurred will result in higher prices for services. In DirecTV's case, the company boasts "99% worry-free signal reliability," but also admits that severe weather occasionally interrupts signals. If the frequency of severe weather increases, DirecTV and its subscribers might suffer. According to the company's 2013 10-K, the value of its satellite fleet is $1.166 billion. Construction of several new satellites has been ongoing, with completion and launch dates ranging from the end of 2014 through 2016. DirecTV has already prepaid hundreds of millions of dollars in installments for these satellites, with nearly $1.3 billion still outstanding.

    Final thoughts
    As the planet gets hotter, more powerful hardware must be developed, purchased, and installed to maintain optimum network performance. So, in addition to the environmental consequences of climate change, global warming also negatively impacts telecommunications by interfering with wireless signal transmission.

    According to the scientific evidence, global warming will likely negatively impact telecommunications and Internet services for many years into the future. Since the automobile industry is the largest contributor to climate-changing pollutants, it's fair to say that pollution from transportation indirectly contributes to a decrease in the effectiveness of wireless and satellite signals, and possibly to future increases in the cost of services to both providers and end consumers.

    For investors, this issue won't cause any immediate or short-term impact on share prices. However, as the climate change problems get worse in the coming years, telecommunications companies will have to develop stronger satellites and signal transmission equipment to continue providing uninterrupted service. Also, new regulations are sure to follow as well; regulations may force automakers to change both manufacturing processes and vehicle engine equipment. Major players in both sectors could experience share price declines resulting from increased expenditures and unhappy customers.

    Tags: DTV, F, GM, TSLA, long-ideas
    Aug 22 1:38 PM | Link | Comment!
  • Should Advertisers Abandon Tiger Woods?

    Tiger Woods is the most successful active golfer. At only 38 years old, he's won more titles and broken more records than any other professional in the sport. But, Tiger's success has steadily declined over the past few years, and this season his performance has been downright abysmal. This has led some critics to question whether he's still worth the money he's receiving from endorsement deals.

    Tiger's share of a billion dollar industry

    The professional athlete endorsement industry spends approximately $1.1 billion annually on contracts with the biggest names in sports. Last year, Tiger Woods was the top-ranked endorser, raking in $65 million from a host of sponsors. This year, his endorsement deals are slightly less at $55 million, according to Forbes.

    However, with Tiger's checkered past and poor performance on the golf course, it's no shock that his value to sponsors comes under fire. Despite breaking countless records -- like holding the No. 1 pro golfer title for the most consecutive weeks, being awarded PGA Player of the Year 11 times, and having more major wins than any other golfer -- Tiger's game has taken a rather significant turn for the worse.

    Last weekend, Tiger failed to make the cut at Valhalla, finishing his last round with a score of 74. That marked "his fourth early exit in 66 major starts as a pro." He blamed his poor performance on lower back pain stemming from his fall into a sand trap during the Bridgestone Invitational tournament the week prior. The injury came just four-and-a-half months after he underwent surgery to relieve a pinched nerve in his back. On the advice of his physicians, Tiger announced earlier this month his withdrawal from the Ryder Cup, and that he would not be returning to the golf course until December.

    Some advertisers have lost faith in Tiger

    Source: ESPN

    Over the past seven years, Tiger has had a number of relatively serious injuries including a ruptured ACL, torn Achilles tendon, fractured tibia, inflamed neck joint, and a strained Achilles tendon (not the same one that was torn). Because of his injuries, and his highly publicized extramarital activities and subsequent divorce proceedings, Tiger's career has been nothing short of a roller coaster ride.

    The question, though, is whether Tiger Woods is still worth the money advertisers are paying him. Apparently, some companies don't think so. When Tiger's infidelity scandal became front page news in 2009, his endorsement deals with AT&T (NYSE:T), Accenture (NYSE:ACN), Gatorade, and Tag Heuer were cancelled, losing him an estimated $20 million per year.

    Electronic Arts (NASDAQ:EA) ended its relationship with Tiger at the end of last year, and it's been speculated that the loss of that endorsement deal is primarily responsible for the $10 million decrease in his earnings. After over a dozen video games bearing the pro golfer's name, which generated something in the range of $800 million for EA, the video game developer announced the termination of the arrangement, stating that it was a mutual decision.

    Endorsing Tiger's future

    Since the dust has settled on Tiger Woods' extracurricular activities and his covert bedroom hijinks are old news, several companies now endorse the athlete. Tiger's website lists his official sponsors, which include big names like Rolex, NetJets, and Nike (NYSE:NKE), among others.

    Source: Rolex

    Rolex inked a deal with Tiger just months after he was dropped by competitor Tag Heuer. The company branded the deal "a partnership for a new challenge" and apparently had little concern about the media firestorm surrounding the golfer's indiscretions. In its official statement following the announcement of the endorsement deal, Rolex stated,"This association pays tribute to the exceptional stature of Tiger Woods and the leading role he plays in forging the sport's global appeal. It also constitutes a joint commitment to the future." Clearly, Rolex has confidence in Tiger's ability to continue successfully representing the brand and generating revenue.

    NetJets, which offers fractional ownership arrangements of private jets to the affluent, is a subsidiary of Berkshire Hathaway (NYSE:BRK.A) and has sponsored Tiger Woods since before his divorce scandal. In his annual letter to shareholders, Warren Buffett stated that NetJets revenue and profit increased 7.5%, or $288 million, in 2013. Like Rolex, NetJets focuses on an affluent demographic and highlights the finer points of a wealthy lifestyle. The brand remains unaffected by scandals, and Buffett seems to have faith in the future of Tiger's career.

    Perhaps the most notable company to continue endorsing Tiger Woods is Nike. Since the start of his pro career in 1996, Nike has maintained a mutually successful, unbroken relationship with Tiger. Last year, Tiger's agent stated that, "He expected the next contract to keep the 14-time major tournament winner with the company for the rest of his career and leave him as Nike's highest-paid golf endorser." Forbes reported that Nike's golf division, which was built entirely around Tiger Woods, brought in $791 million in sales during the company's fiscal year 2013.

    Final thoughts

    Clearly, Tiger Woods -- as a spokesperson -- still holds tremendous value. His golfing career, despite currently being at its lowest point, is not over. Furthermore, Tiger's future performance on the golf course, no matter how many tournaments he wins or loses, will not change what he has accomplished or otherwise diminish the numerous records he has broken. The public has a short memory when it comes to scandals, and in this case Tiger's whirlwind rise to young golf legend carries more weight with the public -- and more importantly, with advertisers -- than the trending tabloid headlines.

    Aug 20 2:52 PM | Link | Comment!
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