Mon, Mar. 23, 1:54 PM
- Looking to bolster Chinese sales that nosedived following the NSA scandal, IBM (IBM +1.2%) will share technology with local firms to help China develop its IT industry, CEO Ginni Rometty stated at a Chinese conference.
- 13 months ago, Rometty met with Chinese officials in an attempt to restore trust. With the help of easier comps, Big Blue's sales to the Middle Kingdom only fell 1% Y/Y in Q4, after seeing double-digit declines earlier in 2014.
- Rometty's remarks come three months after Bloomberg reported the Chinese government is "aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." A February Reuters analysis found the number of approved foreign tech brands on a Chinese government buy list for state entities had fallen by a third.
Thu, Mar. 19, 10:05 AM
- With Apple Watch set to ship next month, leading high-end Swiss watchmaker Tag Heuer plans to launch a watch that runs on Google's (NASDAQ:GOOG) Android Wear platform, and is powered by an Intel (INTC +0.1%) CPU.
- The PR provides few details about the watch, but Reuters reports the product will be a version of Tag's bestselling Carrera line, and launch next autumn. With Carerra watches often priced above $2K, the deal will likely be more valuable to Intel as a reference win - the vast majority of early smartwatch launches have involved ARM-based CPUs - than as a revenue-generator.
- Intel is going after the wearables market by pitching its Atom CPUs for relatively powerful devices, and its tiny Quark CPUs for less resource-hungry products where battery life is a priority. It has also launched Curie, a button-sized module containing a Quark CPU, flash memory, Bluetooth radio, and sensor hub. The company has a partnership with eyewear giant Luxottica, and has reportedly landed a design win for the next version of Google Glass.
- Separately, IBM (IBM +0.2%) has announced the first OpenPower servers - servers running on IBM's Power CPUs (compete against Intel's Xeon line), but which can be made by 3rd-party OEMs and could sell for much less than IBM's Power-based servers historically have - will launch in Q2 and be sold by Taiwanese manufacturer Tyan. IBM plans to offer its own OpenPower servers later this year in partnership with Taiwan's Wistron; they'll be aimed at the high-performance computing (HPC) market.
- Google, Nvidia, Mellanox, and Rackspace are among the companies that have given their support to OpenPower. IBM is both hoping to halt Power's long-term share losses to Intel, and grab a bigger share of an Internet/white-box server market (dominated by Intel systems) that accounts for a large and growing portion of global server spend.
Tue, Mar. 17, 2:13 PM
- Nearly 5 months after announcing an enterprise analytics alliance with Twitter (TWTR +1.4%), IBM (IBM -0.1%) has launched a slew of cloud-based services for enterprises and developers looking to mine Twitter data for insights and/or fuse it with other data sources.
- Among other things, IBM has rolled out a service on its Bluemix cloud app platform that lets developers/businesses "search, quickly explore and then mine enriched Twitter content and aggregated insights," and a service for its Watson Analytics platform that can "give business professionals the ability to immediately pull Twitter data into any project in order to help identify and explain hidden patterns and relationships."
- Also: The cloud-based version of IBM's BigInsights software for the popular Hadoop big data framework can now be obtained with "pre-configured access to Twitter content." IBM claims 4K+ professionals have been trained to work with Twitter data and combine it with other sources.
- Sample use cases include correlating angry Tweets with weather events and customer defections for telecom companies, drawing a link between retail employee turnover and lost customers, and using Tweet sentiment to better gauge fashion demand. IDC's David Schubmehl argues IBM's industry-specific expertise (also a reason why Apple partnered with IBM) gives it an edge in such use cases, as it battles against Oracle, Salesforce, and other software vendors providing social media analytics tools.
- For Twitter, IBM's tools burnish the company's credentials as a source for valuable business data, and could provide a boost to its data licensing sales. Twitter's data licensing/other revenue rose 105% Y/Y in Q4 to $47M (10% of total revenue).
Sat, Mar. 14, 9:21 PM
- BlackBerry's (NASDAQ:BBRY) SecuTablet, launched in partnership with Samsung (OTC:SSNLF) and IBM, is based on Samsung's Galaxy Tab S 10.5 Android tablet, and contains encryption and anti-eavesdropping tech developed by the company's German Secusmart unit (acquired last year). BlackBerry says the device could be available by this summer, and will sell for about $2,380.
- The tablet is aimed at enterprise and government clients with high-end security needs, and relies on app wrapping technology provided by IBM to silo consumer apps such as Facebook, Twitter, and YouTube from secure apps. IBM will also assist in implementing Secusmart's solutions "within the infrastructures of the various clients inside the governmental sector."
- The launch comes a year after BlackBerry discontinued the (QNX OS-based) PlayBook following less-than-stellar sales, and four months after the company formed an alliance with Samsung to create security solutions for Samsung's Android hardware. Google gave its blessing to BES12 (along with other enterprise mobility management platforms) last month.
Sat, Mar. 14, 4:11 PM
- Reuters reports IBM is working on a digital cash/payment system that would rely on the blockchain - the transaction ledger technology that underpins Bitcoin (COIN, OTCQB:BTCS) and other virtual currencies - to enable transactions for major currencies that don't require a bank or payment processor, thus lowering fees.
- Big Blue has reportedly "been in informal discussions about a blockchain-tied cash system with a number of central banks, including the U.S. Federal Reserve." If central banks approve, IBM will "build the secure and scalable infrastructure for the project."
- A source: "When somebody wants to transact in the system, instead of you trying to acquire a Bitcoin, you simply say, here are some U.S. dollars. It's sort of a Bitcoin but without the Bitcoin."
- Bitcoin's support for transaction fees far lower than those charged by credit card processors (Visa, MasterCard, etc.) and traditional online payment platforms (e.g. PayPal) has led many big online merchants to support the virtual currency. However, Bitcoin's tremendous volatility - after peaking above $1,100 in late 2013, Bitcoin now trades below $300 - has scared off many would-be users.
- In theory, IBM's offering would provide the transaction cost benefits of Bitcoin, while allowing consumers to rely on dollars, euros, yen, etc. The reported solution could be linked to a user's bank account via digital wallet software.
- Also: Whereas Bitcoin is completely decentralized, central banks would serve as overseers for the IBM-backed currency system. "These coins will be part of the money supply," says Reuters' source. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."
Fri, Mar. 13, 1:37 PM
- The euro is down 1.6% against the dollar today following a bearish Goldman forecast, bringing the exchange rate to 1.0465. IBM, which received 33% of its Q4 revenue from EMEA, is among the biggest large-cap tech decliners on a day the Nasdaq is down 1% and the S&P 1.1%.
- Big Blue is just two weeks removed from forecasting a strong dollar will respectively have 7%+ and 6%+ impacts on Q1 and full-year sales growth, larger than previously expected. It had a 440 bps impact on Q4 growth, topping initial guidance of 300 bps.
- Shares are a little over $4 above a 52-week low of $149.52 (set on Jan. 29). They trade for 10x 2015E EPS and 12x IBM's 2015 free cash flow forecast.
Sat, Mar. 7, 3:26 PM
- With Intel's (NASDAQ:INTC) Grantley Xeon CPU launch and Web data center investments offsetting weak high-end server demand, IDC estimates global server revenue rose 1.9% Y/Y in Q4 to $14.5B, and Gartner estimates it rose 2.2% to $14B; those figures compares with Q3 growth estimates of 4.8% and 1.7%, respectively.
- Likewise, IDC estimates global enterprise storage revenue rose 7.2% Y/Y in Q4, aided by Web investments and healthy demand for mid-range systems featuring integrated flash. Q3 growth was pegged at 5.1%.
- IBM had a rough time its both the server and storage markets: IDC believes its storage share fell to 9% (tied for #3) from 12.7% a year earlier, and Gartner estimates its server revenue fell 14% if one excludes Big Blue's x86 server unit, which was just sold to Lenovo. After accounting for the x86 sale, IDC estimates IBM's server share was at 13.7% (#3) vs. 26.8% a year ago.
- HP (NYSE:HPQ) fared a little better: IDC has its server share falling fractionally to 26.8% (still #1 overall), and its storage share falling to 13.8% (#2) from 14.1%. The company's x86 server unit has been gaining ground against IBM's former business, but its high-end server sales remain weak.
- Cisco's (NASDAQ:CSCO) UCS server line (recently refreshed) continues to gain ground: Its share rose to 5.3% (#5) from 4.5%, with full-year revenue pegged at $2.9B. With the help of aggressive pricing and x86 growth, Dell's server share rose to 16.7% (#2) from 15.2%, while its storage share slipped to 9% (tied for #3) from 9.2%. Lenovo (OTCPK:LNVGY) claimed a 7.6% server share (#4) thanks to the IBM deal, kicking Oracle (NYSE:ORCL) out of the top-5 along the way.
- EMC, whose high-end storage sales have been pressured (mid-range/flash demand has been better), saw its storage share drop to 22.2% (still #1) from 23.1%. NetApp (NASDAQ:NTAP), which posted an FQ3 miss and light guidance last month amid tough mid-range competition from EMC and others, saw its share drop to 7.2% (#5) from 8%.
- Not surprisingly, the white-label hardware beloved by Google, Facebook, Amazon, etc. continued to take share. IDC estimates such hardware, referred to as ODM Direct, claimed server and storage shares of 8.2% and 12.8% vs. 6.4% and 9.9% a year ago.
- Sales of x86 servers, the lion's share of which run on Intel CPUs, rose 7.1% to $11.5B. Sales of non-x86 servers fell 14% to $3B, thanks to declining demand for both mainframes and UNIX servers running proprietary RISC CPUs. "Early-stage revenue" was seen for ARM (NASDAQ:ARMH) servers, largely via HP's Moonshot line.
- Other companies with strong server and/or storage exposure: STX, WDC, SMCI, MLNX, AVGO, QLGC, RHT
Wed, Mar. 4, 6:02 PM
- Bloomberg reports production of a 12.9" iPad (NASDAQ:AAPL) is "now scheduled to start around September because of delays involving the supply of display panels." Sources state Apple previously planned to start production in calendar Q1.
- The larger iPad is expected to be aimed at enterprises and creative pros - there have been rumors of a stylus accessory for it - and bolster a business sales push that already includes partnerships with IBM and various indie developers to create enterprise-focused iOS apps. On Monday, IBM launched new iOS apps aimed at banking/financial services, retail, and travel/transportation clients.
- While iPhone and Mac sales have been growing, the iPad has been a weak spot for Apple lately: iPad sales have been down Y/Y during the last four quarters, and fell 22% in FQ1 (the December quarter).
- Update: The WSJ backs up Bloomberg's report, stating production will begin in 2H15. It also reports Apple is thinking of including USB 3.0 ports on the 12.9" iPad.
Wed, Mar. 4, 9:29 AM
- IBM has acquired AlchemyAPI, a provider of software APIs for companies looking to add A.I./deep learning capabilities to their apps. Terms are undisclosed.
- AIchemy offers both cloud-based and on-premise versions of its API offerings, which cover image and text analysis tools. The company asserts its platform "makes it easy to create smart apps that deeply understand the world's conversations, reports and photos."
- IBM plans to integrate Alchemy's deep learning tech with its Watson A.I. hardware/software platform, declaring it will strengthen "Watson's ability to quickly identify hierarchies and understand relationships within large volume data sets." Big Blue also states the deal will "greatly expand the number and types of scalable cognitive computing APIs" available to clients, developers, and partners.
- The IT giant stated last year it wants Watson to produce $10B in revenue within 10 years - all signs suggest it has a ways to go. IBM rolled out the cloud-based Watson Analytics service last year to good reviews, as well as a cloud app development platform (Bluemix) that supports Watson services and APIs. It also bought a virtual assistant startup (Cognea) to help Watson deliver "conversational services."
Mon, Mar. 2, 7:48 AM
- "When Charlie's letter came in and it referenced Greg and Ajit, it was news to me that he was writing that," Warren Buffett tells CNBC after this weekend's annual investor letters ratcheted up speculation Greg Abel and Ajit Jain were first in line to be the next chiefs at Berkshire Hathaway (BRK.A, BRK.B). There's "no jockeying" at all going on between the two, he says.
- Minimum wage: We could afford to pay $20 nationwide, but there'd be a lot of people without jobs. It "distorts the market."
- IBM: "People have this misconception that - when we buy a stock - we want it to go up. That's the last thing we want it to do ... There's been no surprises at IBM since we started buying it a few years ago ... We expected revenue to come down."
- AXP - The company has a strong position in its antitrust lawsuit (which it just lost, but plans to appeal). The partnership with Costco ended when the two couldn't come to terms.
- Previously: Buffett, Munger talk succession and more in annual letters (Feb. 28)
Thu, Feb. 26, 11:13 AM
- IBM (IBM -0.6%) uses its 2015 analyst day (webcast) to declare it's looking to generate $40B in 2018 revenue from cloud, analytics, mobile, social, and security solutions, up from $25B (27% of total revenue) in 2014.
- To help achieve the goal, Big Blue plans to shift another $4B in spending in 2015 towards the businesses in question; the company is just a week removed from committing $1B over the next 5 years to storage software investments. Nonetheless, the size of the 2018 target suggests major new acquisitions are a possibility.
- Of note: IBM often has very broad definitions of what it considers to be revenue attached to a growth business. For example, "cloud" revenue might not just cover cloud software and infrastructure services, but also sales of servers, databases, IT services, etc. that went towards a cloud deployment. Thus, while IBM's 2014 "cloud revenue" totaled $7B, its "cloud delivered as a service revenue" was only $3B.
- IBM is also reiterating guidance (provided with its Jan. 20 Q4 report) for 2015 EPS of $15.75-$16.50, and for free cash flow to be "consistent" with a 2014 level of $12.37B. However, it now expects forex to respectively have a 7%+ and 6%+ impact on Q1 and full-year sales growth, more than previously forecast.
Tue, Feb. 17, 5:11 PM
- Warren Buffett added to his IBM bet amid the IT giant's Q4 selloff: Berkshire Hathaway (BRK.A, BRK.B) owned 77M IBM shares at the end of Q4, up from 70.5M at the end of Q3. (13F filing)
- Berkshire also upped its stake in Suncor (NYSE:SU) by nearly 4M shares to 22.4M as oil prices plunged. However, the firm dumped the 41M-share stake in Exxon Mobil (NYSE:XOM) it held at the end of Q3, and its 5M-share stake in ConocoPhillips (NYSE:COP). Its 449K-share stake in Express Scripts (NASDAQ:ESRX) was also liquidated.
- A new 8.4M-share stake was taken in Restaurant Brands (QSR - rose 8.7% today following earnings), and a 4.7M-share stake in 21st Century Fox (NASDAQ:FOXA). Existing stakes in GM, DirecTV, MasterCard, and Visa were moderately upped (among others), and stakes in Bank of New York and National Oilwell moderately lowered.
- Berkshire owned 17.1M Deere (NYSE:DE) shares at the end of Q4, up from 7.6M at the end of Q3 (the Q3 stake was kept confidential). Deere is up 1.6% AH.
- Overall, Buffett's firm created or expanded positions in 15 companies, and cut or liquidated positions in 5.
Tue, Feb. 10, 3:20 AM
- IBM (NYSE:IBM) is suing Priceline (NASDAQ:PCLN), accusing it of infringing on four patents and claiming billions of dollars in royalties.
- "Priceline has refused to engage in any meaningful discussion on the merits, resorting instead to delay and non-responsive answers," IBM said in its complaint.
- The patents cover methods of tracking prior conversations with a user, Internet transmissions and advertising, and one that improves on a single sign-on.
- PCLN -0.8% AH
Sat, Jan. 31, 2:56 PM
- IBM has approved a 2015 compensation package for CEO Ginni Rometty that includes a $1.6M base salary (up from 2014's $1.5M), $13.3M in restricted stock units (up from 2014's $12.75M), and a potential $5M bonus (up from 2014's $4M, of which $3.6M was earned). The stock units, whose granting is tied to hitting EPS and cash flow targets, will be distributed in 2018. (8-K)
- The pay hike follows a 2014 in which IBM's dividend-adjusted stock price fell 12%, and its EPS and free cash flow respectively declined 1% and 18% amid top-line pressures that cut across hardware, software, and services. The year also saw Big Blue pull its $20 2015 EPS target.
- After factoring dividends, IBM's shares are down 11% since Rometty became CEO at the beginning of 2012.
Tue, Jan. 27, 12:10 PM| Comment!
Mon, Jan. 26, 10:44 AM
- "IBM (IBM +1.5%) does not comment on rumors, even ridiculous or baseless ones," says Big Blue in response to a report it's laying off over 110K workers. "If anyone had checked information readily available from our public earnings statements ... they would know that IBM has already announced the company has just taken a $600 million charge for workforce rebalancing."
- IBM adds it currently has ~15K job openings worldwide, and that it "continues to remix its skills to match where we see the best opportunities in the marketplace."
- Workers' union Alliance@IBM suggests taking a cautious view of the report. "Various members of the media are picking up on Robert Cringley's assertion that 100,000 IBMers will lose their jobs next week in a massive reorg at IBM. The Alliance has no information that this is true ... But as you all know, anything can happen at IBM anymore and this is the time of year that IBM cuts jobs."
- Though IBM has carried out plenty of layoffs in recent years, 110K+ workers would be a far larger restructuring move than anything previously launched. As Hong Kong's The Standard notes, a $600M charge likely covers the layoff of several thousand workers.
- The Register reported earlier this month IBM is planning a big reorg that will see the company "try to shed [its] dusty hardware, software and services silo structure."
- Update: CNBC's Jon Fortt reports IBM is laying off less than 10K workers.
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International Business Machines Corp is an Information Technology (IT) company. It creates business value for clients and solves business problems through integrated solutions that leverage information technology & knowledge of business processes.
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