Consumer Electronics

Cisco’s latest deal is an optical illusion

9 Jul 2019

The networking giant is paying $2.8 bln for Acacia, one of its suppliers. Booming bandwidth use is driving demand for its high-speed optical components, but a lofty 46% premium virtually guarantees subpar returns. It’s an odd choice when software is driving Cisco’s margin growth.

Japan’s testy trade row strikes at Samsung

5 Jul 2019

Tokyo is curbing exports of tech materials to South Korea over a wartime spat. Hardest hit may be the $260 bln handset maker, which expects second-quarter operating profit to fall by 56% amid U.S.-China tensions. If supply chains keep getting disrupted, so too should valuations.

Nexon suitors must clear three tough levels to win

3 Jul 2019

Plans to sell control of the $13 bln maker of “MapleStory” and other video games have stalled, but may yet be revived. Bidders like KKR will have to get past a messy corporate structure. Then there’s South Korean nationalism to slay. And the last big challenge is China's Tencent.

Japan Display could use a solid AppleCare plan

1 Jul 2019

The iPhone-screen maker is getting a $100 mln lifeline from its most important customer as part of a messy bailout. It’s a rare sort of investment for Apple, but it has few alternative suppliers for the item. The imprimatur also should help Japan Display shore up other backers.

Japan Display gives rescuers more bargaining chips

15 May 2019

The troubled Apple supplier announced worse-than-expected results and is also planning layoffs. Last-minute financial hiccups helped Foxconn get a better deal for Sharp. The Chinese-Taiwanese group readying a $730 mln capital injection has been handed an excuse to haggle harder.

Samsung may stay true to its bleak words

30 Apr 2019

The South Korean chipmaker’s quarterly operating profit fell a whopping 60 pct, weighed down by lower prices. Shares are up a fifth this year, however, on an anticipated rebound. Samsung’s abundant use of “weak” and “slow” suggest it could take longer than expected.

Sony missteps arm activists with breakup bombs

26 Apr 2019

The $60 bln electronics giant forecasts a big drop in annual operating profit as PlayStation sales slow. Smartphone losses are mounting, too. After the return of Dan Loeb’s Third Point, the weak outlook is one more spur for boss Kenichiro Yoshida to separate disparate businesses.

Apple supplier’s rescue leaves Japan red-faced

15 Apr 2019

An investor group is buying two thirds of Japan Display for $714 mln, an embarrassingly low price for a former national champion. The company will fall into foreign hands, some of them Chinese, which could raise red flags. Managers have little choice but to pray the deal closes.

Loeb’s Sony sequel has makings of a blockbuster

8 Apr 2019

The activist behind Third Point is building a stake in Sony and getting the Japanese group to sell its movie studio could be part of the plan, Reuters reported. The media landscape has changed since Dan Loeb last tried to break Sony up. The idea looks ready for prime time.

Two big clouds eclipse Samsung’s silver lining

3 Apr 2019

South Korea's $270 bln chipmaker already flagged a dismal first quarter because of a glut. Fewer competitors mean supply cuts could more readily lift prices. But Samsung investors may be underestimating the risks of both stockpiled inventory and weaker demand from new industries.

Gadgets light up Xiaomi’s future

20 Mar 2019

The Chinese giant defied a global phone slump with a 53 pct jump in 2018 sales to $26 bln, even after a sluggish fourth quarter. Bets on cheap-and-cheerful markets are paying off, as is a shift to pricier devices. Despite boss Lei Jun's internet ambitions, hardware still matters.

Toshiba’s big early miss invites investor revolt

13 Feb 2019

The Japanese electronics giant has cut its operating profit forecast by two-thirds barely three months after giving guidance. That doesn’t inspire confidence it can deliver on its five-year strategic plan. Toshiba’s large cohort of foreign shareholders could get more demanding.

Cracks at Apple appear in Asia’s supply chains

23 Jan 2019

The iPhone-screen maker Japan Display may get a $550 mln lifeline from investors including a Chinese state-backed fund. Weak sales of the handsets have hurt. A rescue would point to the severe ripple effects of Apple’s woes, and herald pain for other suppliers like Foxconn.

Samsung’s bad news intensifies $70 bln cash bind

8 Jan 2019

The South Korean giant says quarterly operating profit likely fell to a worse-than-expected $10 bln. With chip prices set to drop further, Jay Y. Lee can draw on his cash pile to boost investor returns and invest in new tech, like 5G. His track record in both is less assuring.

Sony’s turnaround will be an activist casting call

21 Dec 2018

Boss Kenichiro Yoshida has boosted earnings at the $61 bln movies-to-video-games group. But he needs to shed a loss-making handset unit and spin off the chip business, among other things. The Japanese company's reluctance to act will see hedge funds make a cameo in Sony's remake.

German retail flop is cautionary tale for spinoffs

9 Oct 2018

Electronics group Ceconomy reported a third profit warning, a year after being hived off from Metro. Thin margins, tough markets and creaky governance mean shareholders’ ordeal won’t end soon. With groups like Thyssenkrupp and VW eyeing splits, it’s a reminder of how not to do it.

Sizing up Chinese tech political risk is perilous

5 Oct 2018

Shares in computer maker Lenovo plunged 22 pct Friday after a news report alleged Beijing agents inserted spy chips into other companies‘ motherboards. Peers fell too. Fear of China’s role in globally integrated I.T. supply chains is growing but the fallout is hard to price.

Samsung is closer to maxing out memory limits

5 Oct 2018

South Korea's tech titan expects quarterly operating profit to hit a record $15 bln, thanks to an upswing in chip demand. Memory prices will probably peak by year-end, however. Slower earnings growth, and the mounting legal woes of Samsung's leaders, will test investor patience.

Foxconn earnings slip is a governance wake-up call

14 Aug 2018

Quarterly net profit at the $50 bln iPhone-assembler badly missed expectations. Steeper costs at subsidiaries and other bets are probably to blame. Boss Terry Gou, though, gives few details on new ventures: without better disclosure, shareholders will be caught off-guard again.

Smartphone slowdown is least of Samsung’s problems

6 Jul 2018

South Korea’s $300 bln tech giant estimates quarterly revenue fell 5 pct from a year earlier. Weak handset sales will recover, though. More worrying are China's price-fixing probe into memory chips and new rules at home that could force a hefty batch of its stock onto the market.