Silicon Valley disruption reaches illogical limit 21 Sep 2015 The maker of Apple’s top-selling app, ad blocker Peace, yanked it because the software “doesn’t make him feel good.” Upending industries from taxis to newspapers is the point of developing new technology. It’s too late now to have a heart. Google and others will face the music.
Dialog’s U.S. chip deal has macroprocessing risks 21 Sep 2015 The Frankfurt-listed seller of power-efficient microchips is buying Atmel for $4.6 bln. The deal would reduce Dialog’s reliance on Apple, might improve its network-connected chips, and should give decent cost savings. But it brings sizeable integration challenges.
HP’s shrink-to-success plan may soon reach limit 16 Sep 2015 The $49 bln tech company increased its layoff tally to almost 90,000 as it prepares to split. Boss Meg Whitman also touted a four-year run of avoiding “stupid” M&A. Efficiency and allocating capital more sensibly are praiseworthy. It’s a strategy that will only go so far, though.
Digital ad haters play into Facebook’s hands 16 Sep 2015 Apple’s latest operating system helps iPhone owners dodge Madison Avenue. Blocking software already threatens some $22 bln in global brand spending this year. As web-based publishers wrestle with technology, marketers may move faster into walled systems like Facebook’s.
Asset-stripping Yahoo could mean profitable relief 15 Sep 2015 The company’s plan to spin off its $25 bln Alibaba stake tax-free may not fly. Buying Yahoo and selling its parts – and taking the tax hit – would be brutal, but simpler and quicker than faffing about with clever structures. A 25 pct premium might still offer upside.
Revolving door from Silicon Valley worth spinning 11 Sep 2015 A new proposal in Congress aims to crack down on financiers taking a turn in government. The sometimes suspect rotation from public service to lobbying also persists across industries, including technology. What Washington could use, though, is more computer nerds in high places.
Google in China faces moral and financial hurdles 11 Sep 2015 Censors forced the web giant to retreat from the People’s Republic in 2010. Now it’s reported to be mulling a return with a Chinese version of its mobile app store. Harsh regulation would test Google’s principles, while fierce competition will make profit harder to come by.
Staples-Office Depot spread beckons the brave 10 Sep 2015 Shares of Office Depot are trading 27 pct below the implied value of rival Staples’ $5.6 bln offer. The retail office trade is a challenged business, but with Staples down just 18 percent since January, Office Depot looks like a cheap option on the deal passing antitrust muster.
JD.com doesn’t belong on the buyback bandwagon 10 Sep 2015 The Chinese e-commerce group has earmarked up to $1 bln for buybacks. After a selloff JD.com understandably wants to signal it is undervalued. But this is not a mature business throwing off cash: it’s still growing and investing, and only floated last year.
Monitise’s loss of revenue looks hard to recapture 9 Sep 2015 The mobile payment company’s chief executive is stepping down and it now expects no top-line growth next year. Things look grim after multiple revenue warnings and failure to sell itself. Switching to online subscriptions is far from certain to offset the drop in licence sales.
Apple’s iPhone upgrade should sustain investors 8 Sep 2015 Boss Tim Cook is expected to unveil a new version of the company’s smartphone. If the product cycle pattern follows, it will elicit oohs and aahs but not drool. The event could, however, remind shareholders of one more thing: for a blue-chip stock, Apple trades at a big discount.
Russia’s internet grip is softer than China’s 7 Sep 2015 A law forcing websites to store Russian users’ information domestically is the latest example of a clampdown on internet freedoms. But Russia’s size, combined with an unwillingness to enforce such rules fully, makes fight better than flight for the likes of Google and Facebook.
LVMH’s bite out of Apple is digital coming-of-age 2 Sep 2015 The French luxury group has poached a top Apple music executive to head its online operations. It’s a significant move in a sector that has been wary of the net. It also cranks up the heat on the sector’s e-commerce leader Burberry and recently merged Yoox/Net-a-Porter.
Taiwan chipmaker’s woes mirror economic challenge 1 Sep 2015 TSMC faces tepid global demand and a slowdown in China, the world’s largest smartphone market. The $100 billion group is also losing market share to rival Samsung. The problems facing Taiwan’s largest company are shared by the island’s tech- and export-dependent economy.
Silicon Valley rule of thumb points right way 31 Aug 2015 In a land that fetishizes revenue growth over profitability, there’s a new sanity check for software firms to see if the two rates add up to at least 40 pct. A Breakingviews analysis suggests it can be a useful guideline. Investors should just be wary of extrapolating too much.
Google EU antitrust spat riddled with holes 28 Aug 2015 The search giant’s robust response to a European challenge over price comparison tools ratchets up a complex theoretical battle over what makes a monopoly. Yet the dispute misses a broader point: it’s hard to see how any likely outcome will make a massive difference to consumers.
Rob Cox: Double-duty CEOs are a worrisome trend 27 Aug 2015 Fiat boss Sergio Marchionne may don another hat to run Ferrari. Like Jack Dorsey and Elon Musk, however, he’s only human. Investors in public companies, especially young or challenged ones, require full attention from a leader. That’s all but impossible when he’s running two.
Alibaba still looks pricey despite selloff 25 Aug 2015 Less than a year after its $25 bln offering, the web giant’s shares have fallen below their $68 IPO price. Growth worries have afflicted all technology stocks and Chinese ones in particular. But Alibaba’s core e-commerce business is still highly valued compared with its rivals.
Tech’s real China syndrome victims are yet to fall 24 Aug 2015 Facebook, Apple, Amazon and Microsoft lost nearly $200 bln of value in a week. China’s woes sparked the rout, but the problem was investors’ giddy faith in growth. Public tech stocks may recover. Fantasy valuations of private firms like Uber, though, will take the bigger hit.
Uber faces a competition pile-up in Asia 24 Aug 2015 The taxi-hailing app may be a Silicon Valley darling but it’s an underdog in China and India where tech giants are backing larger rivals. A competitor is even funding its top opponent in Southeast Asia. The anti-Uber alliance calls the group’s $51 bln valuation into question.