Tuesday, December 10, 2013
9:15 PMNokia reportedly prepping low-end Android phone. Will Microsoft sell it?
- Multiple sources tell The Verge Nokia's (NOK) phone unit has been working on a low-end Android phone even as the business gets set to be sold to Microsoft (MSFT). A 2014 launch is said to be planned.
- The phone, codenamed Normandy, reportedly features (like Amazon's Kindle Fire line) a non-Google-approved version of Android. That means it can't feature Google Play, or commonly pre-installed Google apps/services such as YouTube, Maps, Gmail, and Now. Sources compare the product to Nokia's Asha feature phones.
- The NYT previously reported Nokia worked on Android phones before the Microsoft deal was announced. However, the deal prohibits Nokia from selling phones under the Nokia brand until 2016. Moreover, maintaining a phone business, and the patent cross-licenses needed for it, could undercut Nokia's efforts to better monetize its IP.
- Thus, Microsoft will probably have the final call on whether to sell the phone. Thanks in large part to the Lumia 520 and variants, Windows Phone has made decent gains in the low-end smartphone market. But it hasn't yet reached the unsubsidized price points (well below $100) delivered by the cheapest Android phones. In the meantime, those Android phones are eating into Nokia's feature phone business.
- NOK +1.6% AH
7:08 PMTwitter updates apps to emphasize messaging, support private photo-sharing
- Twitter's (TWTR) iOS and Android apps have been updated to place much greater emphasis on the service's direct messaging (DM) feature - a DM tab has been added to the apps' main navigation bar - and to enable photo-sharing via DMs.
- The update is aimed squarely at contending with the popularity of mobile messaging apps such as WhatsApp, Kik, Line, and Viber. Though centered around basic messaging services, the apps have added support for photo/video-sharing, 3rd-party games, and even payments, and in doing so represent a challenge to Facebook (FB) and Twitter's engagement rates.
- WhatsApp alone had 350M+ monthly active users (MAUs) as of October, and Line has 300M+ registered users. Twitter had 231.7M MAUs at the end of Q3.
- Instagram is reportedly thinking of adding a private photo-sharing/messaging feature of its own. Twitter recently began allowing image previews to appear in timelines.
6:50 PMWidePoint +7.1% AH on bullish SA thesis
- Shares of WidePoint (WYY) jump 7.1% AH after SA contributor The Behavioral Economist makes the case for why shares are significantly undervalued, even in the context of their recent outperformance (shares are up 241% since the beginning of the year).
- The author argues that Q3 results are stronger than they appear on first glance and that WidePoint's recent agreement with Compass Group, as well as "175 million dollars in current capitalization opportunities under contract," imply a valuation of $3/share (an upside of 138% from today's close).
6:39 PMIcahn ups Nuance stake again, shares +1.2% AH
- Carl Icahn continues to bet Nuance's (NUAN) big YTD decline represents a buying opportunity. Just six days after disclosing his firm has raised its stake in Nuance to 18.7%, the media-friendly activist investor discloses he bought another 1.38M shares from Dec. 6-10.
- The latest purchases leave Icahn with a 19.2% stake in the voice recognition software leader.
6:26 PMSamsung sells 10M+ Note 3 units, reportedly dials back smartphone target
- Samsung (SSNLF, SSNGY) says it has sold 10M+ Galaxy Note 3 units (measured in terms of of channel sell-in, rather than end-user sales) since the 5.7" phablet went on sale on Sep. 25.
- The figure highlights the burgeoning size of the phablet market, whose growth has been fueled in part by strong Asian demand. It comes in a year that has seen sales of Samsung's flagship Galaxy S4 fall short of initial expectations, and a host of rival OEMs launch phablets of their own. Samsung tries to differentiate its Note line via its proprietary S Pen and related apps.
- Universal Display (OLED) and Synaptics (SYNA) are among the companies that benefit from strong Note 3 sales.
- Meanwhile, South Korea's ET News reports (translation) Samsung has lowered its 2014 smartphone shipment target to 330M units from a prior 360M. The new figure represents expected growth of just 14%, or less than the 20% growth forecast by IDC.
6:05 PMSprint promises unmatched 4G speeds; $2.5B raised in debt offering
- By leveraging spectrum found in three different bands (including city-friendly 2.5GHz. spectrum acquired from Clearwire), Sprint's (S -0.1%) Spark 4G LTE service will offer download speeds of 50-60Mbps in the near-term and (with the help of carrier aggregation) possibly 150-180Mbps in two years, says CEO Dan Hesse at a UBS conference.
- Sprint is in the midst of rolling out Spark in a handful of major cities (service was just launched in Chicago), but Hesse promises much wider availability next year. He also admits Sprint's breakneck LTE buildout has caused some near-term service quality issues; Consumer Reports recently ranked Sprint dead last among U.S. mobile carriers in a customer service survey.
- Verizon, which continues to have a 4G coverage edge over rivals, is in the midst of tripling its 4G capacity in major markets.
- Separately, Sprint has priced its debt offering. The company is selling $2.5B worth of 2024 notes carrying a relatively steep interest rate of 7.125%.
5:26 PMVimicro +22.2% AH on $41M surveillance tech order
- Vimicro International (VIMC) shares rocket up 22.2% AH after the company's Chinese subsidiary receives an ~$41M order (of which Vimicro will receive ~$16M) for Surveillance Video and Audio Coding tech from the Baoding Public Security Bureau.
- The installed network will consist of several thousand video surveillance stations; the project represents the first phase of a multi-year deployment commencing in Q4.
- Management expects Q4 revenue of $3.5M-$4.5M from its PC and notebook image processor ops and at least $9M-$11M in revenue from its surveillance products business.
5:24 PMHomeAway announces 6.02M-share stock offering; shares -4.7% AH
- HomeAway (AWAY) is issuing 5.5M new shares through its offering, and selling 519K on behalf of existing stockholders. Underwriters will have a 903K-share overallotment option. (PR)
- At current levels, the offering would yield HomeAway gross proceeds of $201M. Those funds will help pay for the company's $198M all-cash purchase of Australian vacation rental site owner Stayz Group.
- HomeAway ended Q3 with $352.6M in cash/investments on its balance sheet, and no debt.
5:10 PMYandex announces $600M convertible debt offering, adds to buyback plan
- Yandex (YNDX) is offering $600M worth of convertible senior notes due 2018. Underwriters will have a $90M overallotment option. The Russian search leader says it will use the proceeds for buybacks and "general corporate purposes." (PR)
- In tandem with the offering, Yandex is increasing the size of its buyback authorization by 3M. That leaves the company free to repurchase 7.1M shares; at current levels, this would cost $283M.
- Yandex had $351.9M in cash equivalents and $550.3M in term deposits at the end of Q3, and no debt.
4:59 PMFAB Universal audit committee: Q2, Q3 reports "should no longer be relied upon"
- As was previously announced, FAB Universal's (FU) audit committee has "concluded that the Company's unaudited interim consolidated financial statements" for Q2 and Q3 "should no longer be relied upon." (8-K)
- Preliminary estimates indicate the undisclosed $16.3M VIE-issued bond underreported interest expense and inflated net income by $344K in Q2 and $476K in Q3, a $0.04/share overstatement from previously-reported EPS results.
4:37 PMCiti upgrades Qualcomm, downgrades BlackBerry, starts Cisco at Sell
- Following the close, Citi has upgraded Qualcomm (QCOM) to Buy, downgraded BlackBerry (BBRY) to Sell, and (as part of a sector launch for networking equipment names) started coverage on Cisco (CSCO) and Brocade (BRCD) at Sell.
- QCOM +0.4% AH. BBRY -1.3% after rallying 3.8% in volatile regular-session trading. CSCO -0.6%. BRCD -0.8%.
4:19 PMTrulia announces $150M convertible debt offering, shares -2.3% AH
- Trulia (TRLA) plans to sell $150M worth of convertible senior notes due 2020. Underwriters will have a $22.5M overallotment option. Trulia can't redeem the notes before Dec. 2018. (PR)
- The online/mobile real estate platform says it will use $30M of the net proceeds to buy back shares, and another $7.2M to fully pay down a credit facility. The remainder will be used for "working capital and general corporate purposes," and possibly to make acquisitions/investments.
- With Trulia having recently spent $68M in cash to help pay for its $355M acquisition of real estate sales/marketing software vendor Market Leader, the company had only $43.4M in cash/equivalents at the end of Q3, along with $8M in debt.
3:39 PMVuzix spikes on Waveguide optics tech announcement
- Vuzix (VUZI +4.2%) shares spike after the company announces "a major optical breakthrough that will dramatically improve glasses-based wearable technology."
- Developed jointly with Nokia, Waveguide optics use a 1.4mm "window" similar to a fiber optic with a tiny input pupil which is expanded using a hologram. The company states that the tech provides significant improvements in weight, volume, simplicity, and optical performance compared to light-bending materials.
- Vuzix's M2000AR single-eye device will use the Waveguide tech, with the company planning a number of other products in 2014.
2:55 PMAT&T promises fiber expansion, says mobile data traffic still soaring
- During a UBS conference talk, AT&T (T -0.5%) CEO Randall Stephenson promises his company will bring last-mile fiber services to markets other than Austin. AT&T has already responded to Google's Austin Fiber announcement by promising to offer 1Gbps services to residents, but has been light on details.
- Stephenson doesn't say where AT&T will offer similar services, but does assert "there are lots of other opportunities around the country," and that "the economics of fiber deployment are really starting to look good in communities like Austin."
- Any large-scale residential fiber rollout could require AT&T to ramp its capex, which the company has generally been loathe to do in recent years.
- Separately, Stephenson notes AT&T is seeing tough competition in the low-end mobile market; the carrier has lost prepaid share this year, though its Q3 numbers suggest it's turning a corner following the launch of its Aio and GoPhone plans.
- Also: In a comment that suggests AT&T (like Verizon) may need to step up its 4G infrastructure spending, Stephenson declares his company is still seeing 50% Y/Y growth in data consumption per smartphone user, thanks to heavy video use.
- With AT&T and Verizon ahead of many foreign carriers in seeing large-scale 4G uptake, their data traffic issues could be a sign of things to come. A pickup in mobile capex to address the issue would benefit infrastructure vendors Nokia (NOK), Alcatel-Lucent (ALU), and Ericsson (ERIC), as well as carrier Wi-Fi vendor Ruckus (RKUS).
2:27 PMSplunk buys network data capture startup
- Splunk (SPLK -1.2%) has acquired Cloudmeter, a developer of products that allow large volumes of data about corporate/data center network activity to be captured. Terms are undisclosed. (PR)
- Splunk plans to integrate Cloudmeter's technology with its machine data analysis software, and notes the former should strengthen the latter's value in IT operational intelligence/troubleshooting deployments (one of its core use cases).
- The purchase comes three months after Splunk bought BugSense, a startup that offered tools for analyzing the machine data produced by mobile apps.