Tag Archives: aapl

Apple Chip Supplier Broadcom Nixes Further M&A After Avago Merger

Broadcom ( AVGO ) CEO Hock Tan satisfied querying minds Thursday, claiming that further M&A following the $37 billion merger with fellow Apple ( AAPL ) supplier Avago Technologies is “furthest from our minds at this point.” Top-line growth will slow to 5% in the long term as Broadcom digests Avago , MKM analyst Ian Ing wrote today in a research report. But the merged company’s diversification — which puts wired sales on top — will help offset a wireless trough in Q2, he said. Ing retained his buy rating and boosted his price target to 162 from 160 on Broadcom stock, which was up 7%, around 147, in afternoon trading on the stock market today , touching a 2016 high. For its fiscal Q1 ended Jan. 1 — before the completed Feb. 1 merger — Broadcom late Thursday reported non-GAAP figures of $2.41 earnings per share on $1.78 billion in sales, up 15% and 8%, respectively, vs. the year-earlier quarter. The consensus estimates of 30 analysts polled by Thomson Reuters were $2.30 and $1.75 billion. Current-quarter sales ex items guidance for $3.55 billion at the midpoint was slightly off the consensus model for $3.75 billion. Unlike Q1 figures, Q2 sales reflect the combined Avago-Broadcom company, Tan said on the company’s earnings conference call. Pacific Crest analyst John Vinh credited Broadcom’s 11-cent Q1 EPS beat to $30 million to $40 million in acquisition-related synergies. In total, Broadcom expects $750 million in synergies over 18 months. FBR analyst Christopher Rolland sees Broadcom exceeding that $750 million target. As Broadcom looks to shed smaller business units, the chipmaker expects to reduce quarterly operating expenses by $80 million. For the April quarter, Broadcom guided to $832 million in op-ex, below the consensus for $944 million, Ing wrote. Wired sales are expected to comprise 55% of Q2 revenue, leading wireless, enterprise storage and industrial sales at 23%, 17% and 5% of sales, respectively. The expectations flip Q1 results, where enterprise storage sales led with 38% of total revenue. Wireless, wired and industrial contributed 32%, 22% and 8%, respectively. During Q1, strong enterprise storage sales helped offset a 15% sequential decline in the wireless segment, Tan said. Wireless sales fell on wavering Apple iPhone demand, despite Samsung’s Galaxy 7S ramp-up, but Tan expects to increase Broadcom’s iPhone 7 content by 20%-plus after Q2. “Despite weaker-than-expected Q1 iPhone builds that have weighed on the entire Apple supply chain, Broadcom not only maintained its full-year RF (radio frequency) growth forecast, but raised it,” Rolland wrote. Rolland maintained his outperform rating and 185 price target on Broadcom stock. Vinh rates Broadcom stock as overweight and has a 170 price target. Shares of fellow Apple suppliers Skyworks Solutions ( SWKS ), NXP Semiconductors ( NXPI ), Qorvo ( QRVO ) and Cirrus Logic ( CRUS ) were up a respective 6%, 5%, 3% and 2% in afternoon trading Friday, after Broadcom’s Q1 earnings.

Amazon Will Revive Fire Tablet Encryption In Quick Reversal

Is Amazon.com ( AMZN ) as good at yoga as Donald Trump? The mighty e-commerce firm quickly reversed its decision to remove the encryption option from its latest release of its Fire OS distributed to tablets less than 48 hours after the news became public. Amazon is buckling under intense scrutiny following the discovery that the new Fire OS 5, delivered onto its slate computers, eliminated the option to encrypt data on said devices. News of the change comes at an auspicious moment, as a debate in the U.S. rages about whether  Apple ( AAPL ) should create a tool that would give government access to a terrorist’s iPhone. Apple says that giving the feds such access would make all other iPhones more vulnerable.  The lack of encryption on Amazon devices is both a privacy and security risk, so experts say. Amazon spokeswoman Robin Handaly emailed an updated, prepared statement to IBD late Friday evening about the company’s position: “We will return the option for full disk encryption with a Fire OS update coming this spring.” The company could not be reached for further comment by publication time. Early Friday, Amazon.com said that it removed data encryption because customers didn’t use it. Typically, device encryption is used by device owners to protect their data in case the the device is lost or stolen. “In the fall when we released Fire OS 5, we removed some enterprise features that we found customers weren’t using,” the statement reads. “All Fire tablets’ communication with Amazon’s cloud meet our high standards for privacy and security, including appropriate use of encryption.” Amazon’s own chief technology officer just last month gave a speech strongly supporting encryption  in general. Amazon Joins With Alphabet, Facebook Amazon has already signaled it will join 14 other tech giants in filing court papers that support Apple and its fight against the FBI in its case against the government which attempting to gain access to an iPhone used by one of the dead terrorists in the San Bernardino, Calif., shootings. Other companies involved include Alphabet ( GOOGL )-owned Google, Facebook ( FB ) and  Microsoft ( MSFT ). Yet industry observers have been critical of Amazon’s decision to eliminate the security measure from own its devices — at least prior to the company reversing its position. “Removing device encryption due to lack of customer use is an incredibly poor excuse for weakening the security of those customers that did use the feature,” Jeremy Gillula of digital-rights nonprofit Electronic Frontier Foundation told IBD via email. “Given that the information stored on a tablet can be just as sensitive as that stored on a phone or on a computer, Amazon should instead be pushing to make device encryption the default — not removing it.” The reports of the company terminating encryption have sparked debate on Amazon Web forums. Amazon is relentlessly focused on the customer experience. CEO Jeff Bezos has repeatedly frustrated investors with his mantra of customers first, profits second. It’s a strategy that has evidently paid off — at least according to double digit revenue growth, surging cloud computing sales and a company that may look impenetrable because of its market dominance.

Verizon: Baby Boomers Top Millennials In iPhone, Mobile Device Care

Baby boomers take the best care of Apple ( AAPL ) iPhones and other mobile devices, while millennials are the generation most likely to have ever broken or lost their phones. So says a new study by Verizon Communications ( VZ ) and KRC Research. Some 49% of U.S. mobile phone owners have broken or lost a mobile phone, says the study. Verizon, of course, has reason to make the point. Verizon customers have the option of signing up for a $10 monthly “Total Mobile Protection Plan ,” which offers coverage for loss, theft, physical or water damage to devices. Most consumers now buy phones in monthly installment plans. Sprint ( S ) and T-Mobile US ( TMUS ) offer leasing plans, while AT&T ( T ) and Verizon do not. Apple last year rolled out its first iPhone financing plan . Apple’s upgrade program includes a warranty that covers incidental damage as well as technical support. But Apple’s upgrade plan does not cover device losses and theft, while carrier options do. According to the Verizon study, two-thirds of millennials have broken or lost a mobile phone at least once, compared with 58% of Gen Xers and only 27% of baby boomers. Millennials drop their phones an average of four times per week, while Gen Xers and boomers both do so only twice weekly. Parents, meanwhile, are more likely to have broken or lost a mobile phone (67%) than non-parents (38%).