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Wall Street Beat: Transition to mobile, cloud hits tech earnings

IDG News Service

With Google, IBM, SAP, Intel and other tech titans reporting earnings this week, the focus is again on mobile and cloud technology. The general trend appears to be that the further a tech vendor has moved away from its legacy desktop-oriented products, the better its earnings are.

IBM has launched ambitious cloud and mobile initiatives—but the resulting products are not quite fully baked. IBM officials themselves acknowledge as much, with IBM CEO Ginni Rometty talking about “positioning ourselves for growth over the long term” in the company’s earnings release Thursday.

Earlier this year, IBM announced a global competition to encourage developers to create mobile consumer and business apps powered by its Watson supercomputer platform. Just this week, IBM and Apple said they are teaming up to create business apps for Apple’s mobile phones and tablets.

But such projects have a ways to go before they reach fruition. Meanwhile, IBM revenue growth is flagging. Its second-quarter revenue was US$24.4 billion, down 2 percent year over year. Profit jumped 28 percent year over year, to $4.1 billion, but that was mainly because it compares to a quarter when net earnings were unusually low due to a billion-dollar charge the company took for workforce rebalancing.

Though both revenue and profit beat analyst forecasts, at first blush investors appeared disappointed, driving down IBM’s share price overnight. IBM shares gained back ground Friday but in early afternoon trading were still down by $0.60 at $191.89.

SAP seems to be riding the transition to cloud while incrementally boosting revenue. The company Thursday reported that, though software revenue continued to decline, cloud-based sales rose.

The maker of ERP (enterprise-resource-planning) software reported that revenue rose by 2 percent year over year to €4.2 billion (US$5.7 billion) in the quarter. SAP’s cloud subscription and support revenue was €241 million in the quarter, up 52 percent. Due to provisions for its patent dispute with software maker Versata, however, its net profit dropped year on year by 23 percent to €556 million.

As usual, Google was the earnings star of the week, reporting Thursday that its core advertising business fueled a 22 percent year-over-year increase in sales, to $15.96 billion. Profit was $3.42 billion, up almost 6 percent year over year.

It’s hard to say how much of this is due to mobile, since Google does not break out numbers for mobile and desktop ads. However, Google has been working on a range of projects designed to get its software on mobile devices. Many of those projects are years away from contributing significantly to the company’s bottom line, so for now the company essentially runs on its tremendous ad business.

One issue is that ads on mobile devices cost less than ads for other platforms and as a result, even as the company successfully makes the transition to mobile, the average cost-per-click of its ads went down by about 7 percent last quarter. Google officials say that as mobile computing becomes more imbued with work and recreation, ads on mobile platforms will become more remunerative.

Investors seem to agree, as Google shares rose Friday by $21.09 to hit $601.90 in afternoon trading.

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World Tech Update Video- June 19, 2014

IDG News Service

Coming up on WTU Amazon debuts its Fire Phone, Intel demos the future of webcams and NASA tests out aerodynamics of the World Cup ball.


World Tech Update – 9/12/13

IDG News Service

Coming up on WTU this week we take a closer look at Apple’s new iPhones, find out when Intel Bay Trail tablets will ship and test out a networked coffee maker.

Computex 2013: World Tech Update

IDG News Service

We’re in Taipei this week for Computex where Intel released Haswell, Microsoft previewed Windows 8.1 and Asus, Acer and Sony announced new tablets and hybrids.

Commitment and Metrics Power Intel’s Corporate Blog

IDG Global Solutions

Intel’s Pam Didner said with social media “everyone can be a publisher.” With such competition, Intel invests in its Health IT blog that won a BtoB Social Media Marketing award for 2012. Didner accepted the award in March 2013 on behalf of her colleagues in North America Marketing.

IDG Global Solutions Director Howard Sholkin asked her at the BtoB awards ceremony and Digital Conference, what are the key metrics for the blog? Watch to find the answer in this brief video interview…..

The Story Behind Intel’s Award-Winning Corporate Blog

IDG Global Solutions

BtoB selected Intel’s “Turning Up the Volume: Boosting Intel Health IT Blog Views 1,200 Percent” as the best blog in BtoB’s 2012 Social Media Marketing Awards Program. At the BtoB awards lunch and Digital Conference in March 2013, Pam Didner explained how Intel built out the site and attracted readers. Didner, who accepted the award on behalf of Intel’s North America marketing group, spoke with IDG Global Solutions Director Howard Sholkin, in this brief video interview.

World Tech Update – 5/9/13

IDG News Service

Coming up on WTU this week Sony bounces back, Intel debuts new chip architecture and a solar plane sets off on a historic journey.

Crain’s BtoB Announces Its Social Media Marketing Award Winners

Cisco Systems Wins Two awards; People’s Choice Online Voting Open Now

NEW YORK & FRAMINGHAM, MA – February 26, 2013–BtoB editors have selected 20 companies as winners or runners-up among 118 entries in BtoB’s fourth annual Social Media Marketing Awards program.

First-place honors go to the following 10 companies:

Integrated (technology): Adobe Systems; Integrated (non-technology): Aon;  Facebook: Emerson Climate Technologies; Twitter: GE Intelligent Platforms; LinkedIn: Dell Inc; Best Use of Pinterest: Constant Contact; Viral Video: Dun & Bradstreet; Mobile: Cisco Systems; Corporate Blog: Intel Corp.; and, Closed Community: Cisco Systems.

            Submissions were accepted last November into January 2013.  All the editors’ selections are online at http://bit.ly/13bx6vv, and will be reported on in the March 2013 BtoB print issue.  John Obrecht, editor of BtoB, said: “We’ve entered a new era of social marketing, The sophistication of programs has reached a new level as exemplified by our People’s Choice nominees.”

For the fourth consecutive year, IDG Communications is the Premier sponsor of the BtoB Social Media Marketing Awards.  “Marketers have come a long way since the first awards program where social might have been a small part of a campaign.  Now, marketers must include earned media exposure if they want to reach prospects who rely on social networks for information and purchase decisions,” said Matthew Yorke, president, IDG Global Solutions.  “We congratulate the winners and runners up who excelled in their use of social media marketing.”

 Online Voting for People’s Choice Awards Continues Through March 1
BtoB editors selected three entries from tech and non-tech categories for the People’s Choice awards.  Online voters can choose between tech entries: Adobe Systems:  “Metrics, Not Myths;” Deltek: “Connect More;” or, Dell: “LinkedIn Page.”  On the non-tech side the nominees are Aon: “Global Service Day;” New Cities Foundation: “DeusM Social Media Campaign;” or, Emerson Climate Technologies: “Painted Copeland Scroll Compressor Program.”

Online voting for the People’s Choice nominees is open until Friday, March 1 at 4 pm eastern.  Vote at http://bit.ly/URZPGs.

Awards Lunch at Digital Edge Live Conference
The People’s Choice awards, selected by online voters for tech and non-tech entries, will be announced on Wednesday, March 20 at the Nikko Hotel in San Francisco.  The category award honorees and runners-up will also be recognized at the lunch.

Speakers at the all day conference include executives from IBM, SAP, Intuit, Intel, Cisco Systems, USG, and IDC.

To register for the conference and awards lunch, please go to http://bit.ly/YU0Qe6

About BtoB
BtoB, a Crain Communications publication, is the magazine for marketing strategists. It is the only publication dedicated to all disciplines of business-to-business marketing. In print and electronically, BtoB delivers the latest trends, best practice case studies, research, and analysis that senior marketers need to develop a winning integrated marketing strategy.

About International Data Group
International Data Group (IDG) is the world’s leading technology media, events and research company. Founded in 1964 and headquartered in Boston, Massachusetts, IDG products and services reach an audience of more than 280 million technology buyers in 97 countries.

IDG Communications’ global media brands include ChannelWorld®, CIO®, CSO®, Computerworld®, GamePro®, InfoWorld®, Macworld®, Network World®, PCWorld®, TechHive, and TechWorld®. IDG’s media network features 460 websites, 200 mobile sites and apps and 200 print titles spanning business technology, consumer technology, digital entertainment, and video games worldwide. The IDG TechNetwork represents more than 500 independent websites in an ad network and exchange complementary to IDG’s media brands.

With expertise in branding, lead generation, and social media marketing, IDG marketing services programs are strategically designed and implemented to influence technology vendor prospects worldwide.

A recognized leader in conference and exhibition management, IDG produces more than 700 globally branded technology and entertainment conferences and events in 55 countries.
International Data Corporation (IDC), a subsidiary of IDG, has more than 1,000 analysts who provide global, regional, and local expertise on technology and industry opportunities and trends in more than 110 countries.

Additional information about IDG, a privately held company, is available at http://www.idg.com.


Contacts: For IDG:  Howard Sholkin, 508-766-5610, howard_sholkin@idg.com
For BtoB: John Olbrecht, 312-649-5326, jobrecht@crain.com

Trademarks and registered trademarks are owned by International Data Group, Inc.  All product and company names are trademarks of their respective companies.



IDC Trims Chip Forecasts

Daily Finance

Research firm IDC recently released new projections for chip growth in both 2012 and 2013 that came in lower than previous expectations. As recently as July, the firm expected industry growth to come in at 4.6% with total revenue of $315 million, but the recent report dropped the growth number to 1% with revenue at $304 million. IDC cites global economic weakness and weak PC demand, among other factors, as some of the reasons for the slowdown. While reduced from its original projection of 6.2%, IDC now estimates 2013 growth at 4.9%. As you prepare for 2013 and consider your allocation to semiconductors, the role of reduced growth expectations should be central.

As the industry stands, even with the lowered expectations, both Qualcomm andIntel remain top picks heading into 2013. On the other hand, NVIDIA and ARM Holdings , while solid, may need to be tempered under the new targets. When we consider the numbers, however, there is the potential for each of these options to perform.

A growing consensus
The IDC report comes on the tail of a recent release from Gartner that also lowered that firm’s expectations for 2012 and 2013. Gartner is actually predicting a 3% decrease in semiconductor revenue for 2012, down to $298 million, but is much closer to IDC for 2013 with a projection of 4.5% growth. Both firms cite softness in the memory market — specifically in DRAM — as a major source of weakness for the year. The IDC report also looked to weakness in China, the ongoing eurozone debt crisis, weak PC demand, and other factors as catalysts for its lowered expectations.


Principal analyst Peter Middleton of Gartner stated: “The looming fiscal cliff, ongoing European debt crisis, slower emerging market growth and regional tensions have all played a part in reduced growth projections for semiconductor revenue in both 2012 and 2013. Inventory levels were already high at the start of the second half of 2012, and as PC demand rolled off, supply simply overshot demand.” The takeaway from each of these reports is that the general weakness in the economy is likely to create a drag on growth, even in an industry that is experiencing dramatic advances.

By the numbers
While it is easy to see the reduced expectations for the industry as a negative — OK, it is a negative — it is still important to keep the numbers in perspective. Even at the lower projections, IDC expects the industry to add $15 billion in revenues for 2013. Against the revenues of each of the companies mentioned above, this is still a significant increase:

Company Revenue (TTM) Revenue Increase for 10% Growth
Qualcomm $19.1 billion $1.91 billion
Intel $53.8 billion $5.38 billion
ARM Holdings $885 million $88.5 million
NVIDIA $4.13 billion $413 million

Source: Yahoo! Finance. TTM = trailing 12 months.

While the numbers required for 10% growth for each of these companies are not insignificant, and there is no reason to believe that the growth would be evenly distributed, the takeaway is that each of these companies could grow at 10% and still fall comfortably within the IDC numbers.

To further put this into perspective, each of the above companies have year-over-year revenue growth above 10% except for Intel, which shrunk revenue by 5.5%. Qualcomm grew revenue by 18.3%, ARM grew revenue by 20.3%, and NVIDIA grew revenue by 12.9%. This means that 10% revenue growth would be a slowdown for the three that grew, but with the strength of these companies, it is not inconceivable that they could continue to post solid growth figures while stealing sales from competitors.

Chip leaders
Qualcomm is the “New Chip King,” and is not likely to slow down as it charges into 2013. Central to this position is the company’s solid lead in 4G LTE. A recent report by Strategy Analytics locates Qualcomm’s market share in application processors at 48.1%. The industry as a whole grew at 69% on year-over-year basis, making the figure even more impressive. Overall, Qualcomm is strongly positioned, and is a buy despite the reduced IDC expectations.

Intel, which is generally considered a deep value within the industry, benefits from its diversified exposure to multiple market segments: the PC, mobile, and server markets.DIGITIMES recently reported that Intel plans to roll out a completely redesigned smartphone platform at the Mobile World Congress at the end of February. Furthermore, the company is expected to maintain its strong position within the $10 billion server market and the $31 billion PC market (for reference, PC market revenue remains five times larger than that for mobile processors).

While ARM continues to benefit from what Mr. Middleton at Gartner refers to as theApple effect,” it is simply not as strongly positioned as Qualcomm. Even with that in mind, the company’s relatively small size means it can hit significant growth figures without dramatically swinging aggregate market numbers. NVIDIA continues to be a solid player of the tablet side of the market, but also lags Qualcomm in overall appeal.

Overall, while the report from IDC should not be overlooked, there is still plenty of upside in the industry. The real impact is that with slower growth, you will have to be somewhat selective as to which names to own rather than just buying at will. Qualcomm and Intel remain my top two picks.

When it comes to dominating markets, it doesn’t get much better than Intel’s position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn’t find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you’ll continue to receive updates for an entire year. Click here now to learn more.

World Tech Update – 11/29/12

IDG News Service

Coming up on WTU this week Apple’s iPhone 5 cleared for sale in China, with ride along with a Nokia mapping car and play catch and juggle with a robot.