Computer Hardware

Texas Instruments makes smart $6.5 bln bet

5 Apr 2011

The chip company is paying an eyebrowraising 78 pct premium for rival National Semiconductor. But the target is solidly profitable even with its factories running at a slow tempo. Speed them up as this deal should and TI should generate a nice return on its investment.

HP’s boss must present repair bill to investors

11 Mar 2011

Leo Apotheker's first presentation to shareholders next week won't be pleasant. His predecessor's dealmaking and costcutting spiked up profits. Spending more on R&D, boosting quality and gluing HP's parts together is a necessary task unlikely to generate quick returns.

Freescale’s mega-LBO does not compute

24 Feb 2011

The chipmaker started to quake under its hulking debt soon after it was bought for $17.6 billion in 2006. A restructuring and a sales rebound have helped. But even if Freescale's IPO fetches the same valuation as rival NXP, the buyout foursome's investment would be halved.

Cisco’s growth quest may be giving it sclerosis

10 Feb 2011

In its last quarter, the networking group had to extend favorable terms to customers just to get a 6 pct sales lift half its longterm target and hammering margins. It's setting up a working group to study what happened. It's not too hard to diagnose: Cisco needs a diet.

Qualcomm makes $3.1 bln push for tablet gold

5 Jan 2011

The wireless technology giant hasn t had much success beyond cellphones. Yet other devices, such as Apple s iPad and its rivals, are starting to take the technological lead from smartphones. Buying Atheros gives Qualcomm the chance to get more mobile.

Companies hold off eating R&D seed corn

16 Dec 2010

Hard times hurt. One danger of a sharp recession is that companies cut back spending on innovation, as they did during the Great Depression. Luckily, only truly hard up industries did so during the last crisis. That's good news for future growth.

Google’s innovation engine sputtering big time

1 Dec 2010

The search giant's willingness to spend $6 bln on a startup in a business with almost no barriers to entry is the most damning evidence yet. In the past, Google would've tried to create a Groupon of its own. But these initiatives rarely panned out. It now has to buy innovation.

EU antitrust pile-on overshadows Google’s Groupon

30 Nov 2010

The European Commission is examining whether Google is using its dominance in search to unfairly extend its reach into related areas the way Microsoft once did. The probe is auspiciously timed: Google is contemplating a near$6 bln bid to enter the ecoupon business.

EMC itself may be vulnerable to storage M&A wave

15 Nov 2010

The tech group is paying $2.25 bln, or more than 11 times estimated 2010 revenue, to keep Isilon out of the hands of rivals. Yet strip out EMC s holding in highflier VMware and the aggressor actually looks undervalued relative to its peers.

Cisco’s sprawl brings it to a crawl

11 Nov 2010

The networking giant shocked Wall Street with its tepid revenue forecast sending shares plunging in late trading. This looks like an abrupt overreaction. But fears that Cisco has become too sprawling for its own good are well founded.

Larry Ellison’s anti-HP rant turns weirdly sloppy

27 Oct 2010

Oracle's boss is known for his acerbic tongue. Yet his latest grammaticallychallenged latenight missive daring HP's new CEO to show up in court looks downright bizarre. Perhaps the prospect of tougher competition with HP is getting under Ellison's skin.

Seagate buyers should beware the iPad

15 Oct 2010

The disk drive maker may look a natural LBO candidate. It has been one before, and its $7.1 billion enterprise value is cheap at less than four times estimated EBITDA. Yet past may not be prologue. Fastgrowing tablet devices could easily swipe more of Seagate s future value.

NXP’s market thud doesn’t bode well for rival IPO

6 Aug 2010

The chip company's private equity backers had reasons to take a haircut in their float of the debtladen chip company. But choppy markets made it worse than expected. The investor reception may put a kink in other potential megafloats especially that of rival Freescale.

Antennagate galvanizes Apple PR machine

16 Jul 2010

Steve Jobs showed the likes of BP and Goldman how spindoctoring works. Of course the comparison is unfair: the iPhone 4 problem is minor and easy to address. Still, the rumor mill was getting out of hand, and the usually aloof Apple has made a decent fist of a response.

iPhone’s flaw is less about antenna, more about PR

13 Jul 2010

Steve Jobs newest handset seems to have a minor glitch with its antenna band. No big deal. The problem is Apple s tendency toward secrecy and denial which has turned a potentially routine product glitch into a fullblown investor concern wiping out $5 bln of value.

IBM machine grinds on with Sterling purchase

24 May 2010

Big Blue has a long tradition of morphing to survive technological shift. Its latest acquisition, Sterling Commerce for $1.4 bln, continues its push into higher margin software and online businesses. It s classic IBM not particularly flashy, but sensibly methodical.

SAP takes on tech giants with $5.8 bln buy

13 May 2010

The software company has a history of being careful with acquisitions. Its agreement to purchase U.S. based Sybase is the equivalent of rolling its tanks onto Oracle's lawn. Moreover, it may irritate ertswhile allies IBM and Microsoft. Tech consolidation is forcing SAP's hand.

Google saves face with half-way retreat

23 Mar 2010

In shutting its China portal, the search engine chose morals over profits. But it will keep a toehold, rerouting searches to Hong Kong and keeping on staff. Retaining an option on China looks sensible if Google can withstand bad press, brain drain, and loss of market share.

Infineon revolt is welcome development for Germany

29 Jan 2010

The German chipmaker beat forecasts in Q1. But that will do nothing to quell a shareholder rebellion over the proposed appointment of an insider as chairman. Such open revolt is rare in Germany. It is a sign that shareholder engagement there is gradually improving.

Apple’s iSlate overflows with expectations

5 Jan 2010

Investors are certainly expecting a lot from the company's new tablet gadget. They have slapped a iSlate premium of some $25 bln on the company. It's hard to doubt Steve Jobs, but there are some big assumptions underlying these hopes.