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Google And Alphabet Better Take EU Android Probe Seriously: Analyst

Alphabet ( GOOGL ) unit Google has lots to fear from the European Union’s investigation into its Android unit, said investment bank Monness, Crespi, Hardt & Co. in an industry note Wednesday. “The EU’s moves should not be taken lightly,” wrote Moness, Crespi analyst James Cakmak, adding, “The latest string of developments from the EU’s antitrust boss, Margrethe Vestager, suggests a formal complaint to Google may be underway.” The EU is investigating Google on charges related to Android, said Cakmak — in particular, about whether the company required smartphone makers and others to bundle or otherwise include Google apps and services in their products. He said that required bundling is a big threat, “especially when considering it is Android which allows Google services to proliferate on the mobile ecosystem. Unbundling hinders the ability (of Google) to collect data and targeting.  The case will likely end up in court with appeals, but it shouldn’t be taken lightly.” The EU is investigating Google’s Android system following complaints, including those from a group representing Microsoft ( MSFT ), Expedia ( EXPE ) and Nokia ( NOK ), according to media reports. The European Commission said in a statement last year that it was investigating whether “by entering into anticompetitive agreements and/or by abusing a possible dominant position, Google has illegally hindered the development and market access of rival mobile operating systems, mobile communication applications and services in the European Economic Area.” The EU’s challenge to the Google Android operating system followed a formal complaint filed last year that focused on Google’s comparison-shopping service. The commission had charged that Google favors its own shopping-comparison service in its search results. Google faces fines that could exceed $6 billion or injunctions that restrict how the company operates in Europe. EU Has Tightened Privacy Laws EU officials reached an agreement in December to replace a patchwork of digital privacy legislation with one standard law covering the entire EU to govern how companies can use individuals’ personal information. After nearly four years, negotiators agreed in December on a final text of an EU-wide provision to replace 28 different national privacy laws and boost financial penalties for companies that violate the new provision. Europe has been more concerned about digital privacy than the U.S. Google stopped adding to its Street View footage in Germany years ago, amid government objections there. A European “right to be forgotten” has forced Google and others, upon citizens’ requests, to drop links to information about them that’s available publicly elsewhere online. Europe, which lacks major consumer Internet companies, has also gone after Internet companies — especially Google — for alleged market abuses. Alphabet stock was flat in midday trading in the stock market today , near 750, but it’s up roughly 30% in the past 12 months.

Verizon, Vodafone, China Mobile Surface in Different 5G Camps

Will Verizon Communications ( VZ ) and Vodafone Group, one-time partners, be on different sides in the 5G wireless standards debate? Next-generation 5G services were a hot topic at last week’s Mobile World Congress in Barcelona, Spain. Vodafone ( VOD ) surfaced as a surprise member of a group of wireless phone companies aiming to meld two variants of LTE (long-term evolution) technology as a path to 5G. Those companies include China Mobile ( CHL ), India’s Bharti Airtel, South Korea’s KT ( KT ), Japan’s SoftBank ( SFTBY ) and Vodafone. SoftBank controls U.S.-based Sprint ( S ). Verizon, on the other hand, said at the MWC that it will cooperate with Japan’s NTT Docomo ( DCM ), KT and SK Telecom on possibly different  5G specifications . Verizon in early 2014 bought out Vodafone’s 45% stake in their U.S. wireless joint venture, Verizon Wireless, for $130 billion. Two variants of LTE have existed in 4G networks worldwide. China Mobile, with the government’s backing, developed the “TD” variant, which stands for “time division” communications. Most of the world, including Verizon and Vodafone, used “FD,” or “frequency division” communications, in their networks, constructed starting in 2008. U.S. chipmaker Qualcomm ( QCOM ) has intellectual property tied to the “FD” LTE variant. China’s government, meanwhile, has been keen on harmonizing the TD and FD variants, aiming to help companies such as Huawei sell network equipment and mobile phones abroad. In India and China, mobile phone makers have sold 4G devices that support multiple transmission modes. India’s biggest wireless firm, Bharti Airtel, and Japan’s SoftBank were earlier adopters of TD-LTE. Vodafone, meanwhile, has been working with Sweden-based telecom gear maker  Ericsson ( ERIC ) and Huawei in some countries to meld the FD and TD technologies. At MWC, the five wireless firms — China Mobile, Vodafone, Bharti, KT and SoftBank — said they would support a five-year strategic plan to build a 5G “ecosystem” and converge the TD and FD technologies. Verizon, NTT and their partners, meanwhile, set technical trials for 2016 through 2018. Verizon’s 5G partners include Alcatel-Lucent ( ALU ), Ericsson, Cisco Systems ( CSCO ), Nokia ( NOK ), Qualcomm and Samsung.

Ruckus Bulls Expect Upside From Cable Wi-Fi, OpenG Initiative

Ruckus Wireless ( RKUS ) could get a boost from increased spending on public Wi-Fi networks by cable TV companies as well as its push into a new market — LTE wireless data services that use high-frequency 3.5 GHz spectrum, say analysts. Ruckus, a maker of Wi-Fi networking gear, competes with Cisco Systems ( CSCO ), Hewlett Packard Enterprise ( HPE ), Aerohive Networks ( HIVE ) and others. Ruckus stock was up a fraction in midday trading on the stock market today , near 9.75, but it’s down 9% this year after falling nearly 11% last year, amid a slowdown in education spending on wireless networks. Ruckus has a IBD Composite Rating of 70, where 99 is highest. Ruckus stock touched an all-time low of 7.25 on Feb. 10. On Friday, BTIG analyst Walt Piecyk initiated coverage on Ruckus with a buy rating. “We expect Ruckus to generate 16% revenue growth in 2016, an acceleration from last year’s 14% growth rate,” wrote Piecyk. “We expect 2017 revenue growth of 16% but note that if a cable operator were to initiate a new investment program, Ruckus would have the opportunity to accelerate the top line.” Ruckus sells Wi-Fi gear to the enterprise market — big corporate, government, education and health system customers. One concern among analysts is its exposure to China’s telecom market. In late 2017, Ruckus could get a lift from a new product cycle, says Jason Ader, an analyst at William Blair. Ruckus is targeting in-building wireless networks that use 3.5 GHz spectrum, using a technology called OpenG. Ruckus is working on OpenG with Qualcomm ( QCOM ), Nokia ( NOK ) and Alphabet ’s ( GOOGL ) Google. “Ruckus management is confident in driving adoption of OpenG over time and expects revenue impact in the second half of 2017,” wrote Ader in a research report. “We view the in-building cellular opportunity as an excellent strategic fit with Ruckus’ existing business and a material growth catalyst longer term, especially as the Wi-Fi market matures.”