- BlackBerry's claim that it has not engaged in buyout talks with Samsung is strengthened by the release of the latter’s first Tizen smartphone in India.
- Samsung still sees potential in Tizen OS phones.
- The Samsung Z1 Tizen phone is cheaper than Google’s Android One handsets.
- Android apps can run on the Samsung Z1 through OpenMobile’s Application Control Layer technology.
Why Acquiring BlackBerry Would Make Sense For Samsung
- By acquiring BlackBerry, Samsung could find new avenues for growth, gaining credibility and deeper relationships with enterprise customers and users in highly regulated verticals.
- BlackBerry could help to give Samsung a leg up over Apple and Android devices, which still trails behind BlackBerry in terms of security.
- BlackBerry’s basic patents, which are likely to cover some foundation mobile communication technologies, could prove useful as a bargaining chip for Samsung in the event of litigation with rival manufacturers.
- Samsung will benefit a lot from owning BlackBerry.
- Samsung can use BlacKBerry's QNX and Elliptic Curve Cryptography assets to build the most secure Machine-to-Machine communication solutions.
- Samsung can outrun Google in the connected car segment if Samsung owns QNX. QNX is the leading OS in connected cars.
- Samsung warned that operating profit for December 2014 quarter-end was off 37%.
- Smartphone sales may still be in free fall amid competition from Apple, Xiaomi and Lenovo.
- Samsung is attempting to diversity its revenue stream, but investors should still avoid the stock.
Why Samsung Is Betting Big On The Internet Of Things
- Samsung intends to play a key role in the IoT market, with the intention to equip 90% of all its devices with IoT capabilities by 2017.
- According to research firm IDC, the global market for Internet of things-capable devices and services could cross $7 trillion by the year 2020.
- Trefis has a $1170 price estimate for Samsung, which is slightly below the current market price.
Samsung Dials Into Vietnam, Repositions Itself For Investors
- Samsung has decided to take on increasingly low-cost products by expanding its operations by $3 billion in Vietnam.
- Samsung enjoys a favorable regulatory environment in Vietnam with the government exempting them from corporate taxes for 4+ years.
- Although Samsung's results have been slightly disappointing, investors might consider the recent dip a buying opportunity.
- Samsung's consistent and increasing dividends could also be attractive for income-oriented investors.
Samsung Could Refocus Growth Strategy As Q3 Earnings Plummet
- Samsung's smartphone business faces its biggest test yet, challenged by the arrival of Apple's large-screen iPhones and increasing competition from budget offerings.
- Semiconductor operations did well, aided by strong DRAM and NAND memory shipments.
- The consumer electronics division was weighed down by seasonally lower sales for appliances and lower pricing for televisions.
Mobile Business Slump Forcing Samsung To Refocus Its Strategy
- Samsung’s pre-earning guidance for Q3 2014 indicated that sales and operating profits are declining due to an underperforming mobile segment.
- The company is losing market share, and is expected to face further declines, as competition in the market for Smartphones intensifies and smaller brands continue to outperform Samsung’s phones.
- Samsung’s chip business seems to be doing well and has reported strong growth in its pre-earnings guidance. In order to capitalize on this, the company has made a $15 billion investment in a new South Korean chip plant.
- Share prices have declined by nearly 20% in the past four months and the company has lost almost $45 billion in capitalization.
- Outlook for the stock seems to be bearish and investment is not recommended primarily because challenges in mobile (the main segment for the business) are going to continue.
With Sales In Freefall, Will Samsung Smartphones Go The Way Of BlackBerry And Nokia?
- Samsung warned that Q3 profit could decline by as much as 60% Y/Y. Its smartphone business is the worst performer.
- Smartphones are being hit on the low end by Chinese competitors and on the high end by Apple.
- Samsung's sharp decline is reminiscent of Nokia and BlackBerry, both of which once held commanding market share.
- If sales continue their freefall over the next several quarters, Samsung's smartphones could go the way of Nokia and BlackBerry.
Samsung's Chip Expansion Antagonistic For Micron? Wall Street, 'The Crowd' At Odds
- Wall Street and certain members of the crowd are at odds over Samsung's intentions for its new $15B chip plant.
- Analysts believe Samsung is gearing up to supply explosive demand in memory, in particular, demand for the 2015 iPhone.
- Certain crowd members believe Samsung could attempt to steal share in semiconductors to offset losses in mobile phones. I am riding with the crowd.
Samsung Warns Of Weak Third Quarter As Rivals Gain Momentum
- Samsung came out with a profit warning for the third quarter after disappointing in Q2.
- Rivals are pinching the company's market share on both the high and the low end.
- Apple's new iPhone is expected to put even more pressure on Samsung's sales.
- Samsung issued a profit warning, indicating that Q3 operating profit could fall 58%-62% y/y.
- Competitive pressure from AAPL and low-cost Android handset makers is the main driver behind the decline.
- OPM pressure is mostly due to ASP pressure rather than volume decline, suggesting much of the headwind comes from the low-end segment.
- Samsung Galaxy Note prices will drop at a higher rate following a launch based on historical trends.
- Samsung is pressured by competitive dynamics, commoditization and falling smartphone subsidies.
- These factors put Apple in a much better position to gain market share and reasserts why Apple will continue to outperform Samsung as an investment.
- Apple has been able to design and market superior products over time by keeping the vast majority of design and development in-house.
- Also, Apple’s upcoming iPhone 6 and 6 Plus will have a higher blended average selling price, which will drive sales growth in future quarters.
- Samsung shares have fallen 17% over the past year and trade at just 8x 2014 estimated earnings (6x excluding cash).
- Investors are so concerned about the mobile phone business, the current share price implies a valuation of zero. Similarly, investors are concerned about the low dividend and lack of buybacks.
- An activist investor could potentially unlock value through a partial spin off of the phone business and using excess cash to repurchase cheap stock.
- Taking these simple actions could dramatically increase Samsung's stock price. Shares look to have 90% upside.
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Oct. 18, 2014, 3:36 PM
- Samsung (OTC:SSNLF) has developed technology that could increase the data capacity of NAND flash memory chips by as much 50%.
- Single-layer chips improve memory capacity and lower costs by narrowing circuit width. But many believe there is a physical limit to how narrow a circuit can be made. Multi-level chips can raise memory capacity without narrowing circuit width. Multi-level NAND chips are made by vertically stacking memory cells.
- The purported 50% increase can be achieved by combining 3-bit cells (vs. conventional 2-bit) with multi-layering.
- Source: Nikkei
Oct. 14, 2014, 12:35 PM
- Samsung Electronics (OTC:SSNLF) CEO Kwon Oh-hyun: "We'll have to wait and see how things will go next year, but there definitely will not be any game of chicken."
- Micron (MU +2.6%), SanDisk (SNDK +2.3%), and SK Hynix (OTC:HXSCL) must be happy to hear that. Micron and Hynix sold off in late July after Samsung hiked its 2014 DRAM production forecast, and all 3 names sold off last week after Samsung announced plans to spend $14.7B on a new chip fab.
- Cowen's Tim Arcuri recently downplayed concerns about the fab's impact on Micron. "We don’t put a ton of stock in this announcement as we question when – or even whether – this fab will ultimately be built, and we also question the market’s assumption that this would be DRAM."
- Bernstein pounded the table yesterday for Micron, highlighting a valuation of ~6x 2015E EPS and arguing fears about its exposure to a chip inventory correction (following Microchip's warning) are overblown. "The memory cycle has been more supply driven rather than demand driven ... if there is any short-term demand weakness memory makers can just decide to hold on to inventory as opposed to selling at a suboptimal price."
- Micron and SanDisk are both faring well on a strong day for tech.
Oct. 12, 2014, 8:37 PM
- Amid evaporating profits from its key mobile phones operation, Samsung (OTC:SSNLF, OTC:SSNGY) has fallen out of favor with investors thinking the company could be the next Motorola, Nokia, or BlackBerry, writes Andrew Bary. Another view, however, says Samsung looks more like Apple from a year and a half ago when it's stock plunged below $60 (split-adjusted), and traded at 6.5x earnings (excluding cash). Samsung today sells for 4.8x earnings, net of a $60B pile of cash and investments.
- "[Samsung's] semiconductor division and the cash are worth more than the current market cap," says Bernstein's Mark Newman, meaning investors are getting for free the world's largest maker of handsets, the leading display business, and the largest and most profitable TV maker.
- With $60B in cash against a $150B market cap (Apple has $133B and a $608B market cap), Samsung could find itself the target of an activist investor seeking share repurchases or a boost in the dividend (current yield 1.3%), but then again the Carl Icahns of this world can't as easily pressure family-controlled Korean companies the way they can Apple.
- The last word goes to CLSA's bullish Shaun Cochran: "It is ludicrous to compare Samsung to Nokia, BlackBerry, or Motorola ... Samsung has a history of reinventing itself time and time again. There is an institutional paranoia, a constant sense of crisis that has helped make Samsung so great.”
Oct. 6, 2014, 8:01 PM
- Samsung (OTC:SSNLF, OTC:SSNGY) expects to report a Q3 op. profit of KRW4.1T ($3.8B), down 60% Y/Y and well below a KRW5.6T consensus. Revenue is expected to total KRW47T ($44B), down 20.5% Y/Y and below a KWT50.9T consensus.
- The Korean electronics giant blames weak mobile sales and a declining smartphone ASP. With its efforts to differentiate via proprietary software/services running on top of Google's Android often falling flat, Samsung has been losing share to Chinese OEMs offering aggressively-priced low-end and mid-range devices. More recently, it has also had to deal with the iPhone 6/6 Plus launch.
- The Q3 warning comes on the heels of July's soft Q2 numbers.
Oct. 6, 2014, 1:36 AM
- As it seeks growth beyond smartphones, Samsung Electronics (OTC:SSNLF, OTC:SSNGY) says it will invest 15.6T won ($14.7B) to build a new chip plant in South Korea.
- Construction of the facility will begin next year, with the aim to be completed in 2017.
- Samsung has been on a falling cycle of capital expenditure, which dropped to 10% of sales last fiscal year from 14% in 2010. It plans to devote the bulk of its capex, or W14.4T, to semiconductors this year.
Sep. 26, 2014, 2:41 PM
- Google (GOOG +0.5%) has been increasing the number of Google apps OEMs must pre-install on phones running the company's version of Android to "as many as 20," The Information reports, citing confidential docs.
- Google is also said to be requiring more apps be placed on the home screen or "in a prominent folder," and that Google search be given more prominence. Affected OEMs reportedly include Samsung (OTC:SSNLF), Huawei, and HTC.
- The bundling of Google apps/services (especially Google search) is pivotal to Google's Android monetization strategy. Moreover, Google's ability to mandate bundling, together with Android's ~80% smartphone unit share, helps keep the company's mobile traffic acquisition costs down - the Web giant reportedly makes huge traffic acquisition payments to Apple for Mobile Safari search integration.
- Regulators and OEMs haven't always been thrilled with Google's requirements. The WSJ reported in July EU regulators are likely to launch a formal probe of Google's Android licensing policies.
- In January, Re/code reported Samsung had agreed (in tandem with a new patent cross-license) to tone down support for its own apps/services (often less popular than Google's) on Android phones. More recently, Samsung has been reported to be moving engineers out of its mobile software ops to other units.
Sep. 19, 2014, 4:49 AM
- Despite cancelling the launch of its homegrown Tizen operating system already twice this year, a company exec now says Samsung (OTC:SSNLF, OTC:SSNGY) will attempt the release again in November.
- With the new OS, Samsung is looking to lessen its reliance on Google' Android, which currently powers the vast majority of the mobile devices sold by the South Korean giant.
Sep. 9, 2014, 9:23 AM
- A large patch of the retail sector will have their ears perked up this afternoon to see what Apple (NASDAQ:AAPL) delivers up with its iWatch announcement or teaser.
- Though the company's entry into wearable technology is considered nearly a certainty, the unknown variable is if the product will end up falling under the "gadget" category or be another Apple device revolution.
- Computerworld's Mike Egan is in the latter camp: "The iWatch should be most comparable to the Mac and the iPhone, Apple's two most stunning revolution."
- Forrester Research isn't waiting for details, forecasting 10M iWatch sales by 2016 - a mark which could dent demand for high-end watches.
- Showtime is 1:00 pm ET. (webcast)
- Luxury watchmakers: Movado (NYSE:MOV), Fossil (NASDAQ:FOSL), Swatch (OTCPK:SWGAY), Tiffany (NYSE:TIF), Richemont (OTCPK:CFRUY), LVMH Moet Hennessy (OTCPK:LVMHF), Hermes (OTCPK:HESAF)
- Wearable technology players: Sony (NYSE:SNE), Nike (NYSE:NKE), Samsung (OTC:SSNLF, OTC:SSNGY), Garmin (NASDAQ:GRMN), Basis (NASDAQ:INTC), Fitbit, Jawbone, Adidas (OTCQX:ADDYY), Under Armour (NYSE:UA).
Sep. 3, 2014, 11:52 AM
- The Gear VR, long rumored to be in the pipeline, relies on Samsung's (OTC:SSNLF, OTC:SSNGY) just-announced Galaxy Note 4 to run Oculus VR's (FB -1.1%) software, and provide the device's display and sensors. For now, no other phones work with the device.
- Unlike the gaming-focused Oculus Rift (still in beta), the Gear VR doesn't need a wired connection to a PC. Users interact with the headset through a trackpad and head movements. No price details have been given yet.
- Initial testers are intrigued by the Gear VR's potential, but are also quick to point out content/game support and software/UI development are still very much works in progress. Samsung/Oculus promise a content store will soon be available, and note initial content partners include DreamWorks, Warner Bros., Fox, and Marvel.
- Facebook was recently reported to be working with Hollywood on Oculus deals. Meanwhile, Oculus CEO Brendan Iribe has made it clear he considers OEM deals crucial to his firm's efforts to drive mass adoption of its platform, which has a solid head-start on rivals from a software standpoint. Competition will be provided by Sony's Morpheus headset and Google's Cardboard Android VR platform.
Sep. 3, 2014, 10:13 AM
- As rumored, Samsung's (OTC:SSNLF, OTC:SSNGY) Galaxy Note 4 sports a 5.7" quad-HD (2560x1440) display; the Note 3 has a 1080p display. Other improvements include a revamped S Pen (twice the pressure sensitivity, among other things), a metal rim, and the addition of optical image stabilization, a fingerprint scanner, and a heart rate sensor.
- The U.S. version will run on Qualcomm's (QCOM +0.8%) high-end Snapdragon 805 processor (2.7GHz., quad-core) and support Cat-6 LTE; the Note 3 uses the Snapdragon 800. Some international models will use Samsung's Exynos 5433 processor (1.9GHz., 8-core) and only support Cat-4 LTE. The 5433 beat the 805 in some early benchmarks.
- Samsung has also launched the Note Edge, a phone with combines most of the Note 4's specs with a display that curves downwards at the sides. Samsung argues the edges of the display can be used to quickly glance at information while the phone is lying on a table.
- Samsung, which pioneered the phablet market 3 years ago, is counting on the Note 4/Edge to both counter hungry Chinese OEMs that have been grabbing share, and deal with the pending launch (per numerous reports) of a 5.5" iPhone 6. The company still maintains a high phablet share in the U.S.
- Universal Display (OLED +1.4%) benefits from Samsung's use of a quad-HD display, since the panel requires more OLED materials than a 1080p display.
Sep. 2, 2014, 6:55 AM
- In yet another round of Samsung restructuring, Samsung Electronics (OTC:SSNLF, OTC:SSNGY) says it will consider acquiring the shares of unlisted medical equipment maker Samsung Medison that it does not currently own.
- Samsung Electronics currently holds a 68.5% stake in Samsung Medison, which has a book value of about 478B won ($472M).
- Samsung's restructuring has accelerated since the May hospitalization of the group's chairman Lee Kun-hee, and has sparked investor speculation to the group's succession.
Aug. 28, 2014, 4:45 AM
- Samsung (OTC:SSNLF, OTC:SSNGY) and LG (OTC:LGEIY) will face off at a trade show in Berlin next week, showing off their new smartwatch models.
- Unlike its previous versions, Samsung's new "standalone" watch will support 3G wireless networks and be able to make and receive calls without having to be tethered to a smartphone. The watch, called the "Gear S," will run on the company's Tizen operating system.
- LG’s new smartwatch, called the "G Watch R," will be powered by Android and have a rounded 1.3-inch plastic OLED screen.
Aug. 28, 2014, 2:26 AM
- In the latest round of the remaining Apple (NASDAQ:AAPL) and Samsung (OTC:SSNLF, OTC:SSNGY) patent wars, U.S. District Judge Lucy Koh has denied Apple's bid for a permanent injunction prohibiting Samsung from selling infringing features on its smartphones that relate to three earlier patents.
- Earlier this year, Apple won a $120M jury verdict against Samsung related to the patents and was hoping to extend the ruling.
- Until recently, the two have been been embroiled in untold numbers of global patent lawsuits, but both dropped all claims on battles outside the U.S. earlier this month.
Aug. 19, 2014, 5:59 AM
- Drifting again toward the "Internet of Things", Samsung (OTC:SSNLF, OTC:SSNGY) has purchased U.S. air conditioner distributor Quietside.
- The acquisition is aimed at strengthening the company's "smart home" business, which enables users to control multiple household appliances from a mobile device.
- Last week, Samsung snapped up SmartThings, a developer of home automation hardware/software platforms.
Aug. 18, 2014, 4:34 AM
- Samsung (OTC:SSNLF, OTC:SSNGY) is planning to set up a factory to produce mobile phones primarily for Indonesia, one of the world's fastest growing markets for the devices.
- Production capacity at the facility in West Java will be initially set at 100K units per month, but will eventually climb to 900K.
- Seeing sales of its flagship Galaxy models weaken in more established markets, Samsung is turning to markets with low smartphone penetration rates and higher disposable incomes like Indonesia.
Aug. 14, 2014, 7:16 PM
- Samsung (OTC:SSNLF, OTC:SSNGY) has acquired SmartThings, developer of a home automation hardware/software platform. Re/code reports the purchase price is $200M.
- SmartThings' platform relies on kits featuring a router and small sensors that attach to various home items. Once installed, users can monitor, control, and customize connected devices using mobile apps.
- The acquisition follows Google's purchases of smart thermostat/smoke detector vendor Nest and Wi-Fi monitoring camera maker Dropcam, and the launch of Apple's HomeKit platform, which aims to let 3rd-party home devices be controlled with iOS hardware.
- SmartThings is looking to differentiate itself by creating an open platform for 3rd-party apps/services - founder/CEO Alex Hawkinson claims SmartThings supports 1K+ devices and 8K+ apps. Control4 (NASDAQ:CTRL), whose shares took off after the Google/Nest deal was announced, is among SmartThings' rivals.
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