Information Technology

Worse still to come for Research In Motion

30 Mar 2012

After losing $70 bln of market value in less than four years, the BlackBerry maker’s latest results horrified again. Sales tumbled, margins fell, inventories rose and more executives left. Its next operating system or a sale might provide salvation. But those seem like longshots.

Intel and ARM heading for bloody chip collision

29 Mar 2012

Intel dominates the market for PC processors. ARM Holdings-powered chips run nearly all phones and tablets. Their skirmishing over tablets is just the start of what is likely to become a full-fledged brawl as both firms invade the other’s territory. Investors look out.

What’s Facebook really worth?

22 Mar 2012

A look at Google’s revenue and profit history suggests that even $75 bln is a stretch for the social network’s IPO valuation - at least on a rational discounted cash flow basis. But in Facebook’s hyped offering, anything is possible. A new Breakingviews calculator does the math.

Amazon hedges against the rise of the machines

20 Mar 2012

That’s one way to explain the kooky $775 mln purchase of Kiva. Either that or Jeff Bezos has a robot fetish. It’s not clear what the deal offers shareholders. Automating Amazon’s warehouses makes sense. Buying Kiva droids, rather than their maker, seems the more rational approach.

So what’s Apple really going to do with its cash?

19 Mar 2012

It will hand about $45 bln to shareholders over three years, mainly as dividends. That’s a good start. Yet Apple could make $50 bln in free cash flow this year. With sales and profit rocketing - and the bulk of its $100 bln hoard still stuck overseas - bigger payouts will follow.

Cisco’s John Chambers falls off the M&A wagon

15 Mar 2012

Less than a year ago, the networking giant’s boss, in an unusual mea culpa, forswore big deals and promised discipline. Now, he’s shelling out $5 bln for NDS, a pay TV software firm. But this acquisition might deliver justifiable returns and fit nicely with Cisco’s strategy.

Silicon Valley’s undeserved moral exceptionalism

12 Mar 2012

The ruthless overlords of technology and the Internet at Google, Facebook and elsewhere paint themselves as saints of American capitalism. But like other big business, they’re really the successors to the robber baron magnates of the Gilded Age, Rob Cox argues.

Facebook’s underwriter friends are cheap insurance

12 Mar 2012

The social network’s IPO now has 31 banks working on it. There’s no evidence having more underwriters affects early stock performance either way, and some may be friends of convenience rather than necessity. But for Facebook it’s extra reassurance at little, if any, cost.

Apple’s latest iPad looks sufficiently incremental

7 Mar 2012

The new tablet device comes with a sharper screen, more powerful chip and better camera. The update is evolutionary, not revolutionary. That may disappoint gadget fiends hoping for something more. But history suggests it should be plenty for Apple investors craving growth.

Apple needs good, not just better, supply chain

7 Mar 2012

Despite the bad press, Chinese workers preparing the iPad 3 are treated less badly than many in electronics - which in turn beats the toy and clothing sectors. But with the “lonely leadership” of Apple’s brand and cash, doing things relatively well isn’t enough.

Who cares how many jobs Apple has created?

5 Mar 2012

Shareholders should be scratching their heads after the gadget king commissioned a study showing it produced half a million jobs. This subjective report misses the point. Apple has created $400 bln of value in the past three years - that’s good for the economy and capitalism.

Zynga has less to fear from mobile than Facebook

2 Mar 2012

The online gaming company is diversifying away from the social network. But one trend affecting its giant symbiotic partner shouldn’t much worry Zynga - the shift to mobile devices. Ad-dependent firms like Facebook and Yelp could lose out, but Zynga’s revenue model is different.

$500 bln valuation may still be only half an Apple

28 Feb 2012

The market cap of the world’s largest company is edging toward that landmark threshold. But it could just be a pit stop on the way to $1 trln. A quick tour of Apple’s other eye-watering numbers explains why.

Feel-good laws should put practicality before hope

23 Feb 2012

California has struck the right balance making firms like Apple police labor practices at foreign suppliers. But expecting companies to starve African thugs of mining profits is a stretch. Such edicts may have good intentions but are impractical and often counterproductive.

Complexity caps allure of Yahoo’s Alibaba solution

13 Feb 2012

A mostly cash split-off promises a tax-efficient way for the troubled U.S. Internet firm to cut its stake in a Chinese rival. Yahoo also would accept a group of assets as part of the deal being discussed. But the more elaborate it gets, the more diluted the benefits may be for Yahoo.

Google feeds regulators fresh meat to chew on

1 Feb 2012

Antitrust concerns have swirled around the Internet search giant for years. Now, changes to its data-sharing policies are causing added alarm among lawmakers. So far, Google hasn’t crossed any major legal lines. But the company, led by Larry Page, seems destined to find them.

Apple’s creative destruction claims another scalp

31 Jan 2012

RadioShack is the latest victim. The U.S. electronics retailer plunged 30 pct as Apple’s gadgets snaffle up a bigger chunk of the mobile market. RadioShack is largely a bet upon Android - and lesser carrier Sprint. With Apple keeping more of the spoils, that bet has now gone bad.

Apple’s cash is key to unlocking suppressed value

30 Jan 2012

Though it’s the world’s most valuable company, the iPhone maker doesn’t get full credit for its near-$100 bln cash hoard or its growth. A huge special dividend could be close to a free lunch. And regularly paying out half its earnings could show why Apple may be worth $1 trln.

Apple juggernaut regains warp speed with new pilot

24 Jan 2012

The tech giant’s recent quarter blew away the previous rare let-down: around $30 bln of market cap added after hours proves that. The latest iPhone fueled a 73 pct surge in sales from the year before. With cash rolling in, the destiny of nearly $100 bln in the iBank is looming large.

Patent bubble gets pricked quickly

24 Jan 2012

Apple, Google and Microsoft bid up smartphone invention prices to frothy heights last year to gain a market edge. InterDigital, owner of nearly 20,000 patents and applications, hoped to capitalize but couldn’t find a buyer. There’s still value to pan, but the gold rush is over.