Last week was a particularly busy one for the big technology companies, especially Google GOOGL.
Google Launches Android for Work
“Android for Work” that Google announced last June and spent the last eight months testing and fine-tuning is finally here. Google announced that the technology would allow the splitting of bring-your-own-device (BYOD) devices into work and home zones, with the work zone (including productivity tools like its docs, sheets and slides; Play Store, Box, cloud integration, etc.) controllable by the IT department at work and the personal zone within the control of the user.
The enhanced security could encourage companies to adopt chrome devices and Google productivity tools. Lollipop facilitates the creation of separate work and personal profiles, but Google also launched an app for devices that have older versions of Android to bring more devices into the fold.
Google Wallet May Take Off Now as Carriers Finally Play Ball
The very carriers (AT&T, T-Mobile and Verizon) that blocked Google’s Wallet to promote their own Isis solution have now realized that Apple Pay is a bigger threat. So they have finally agreed to sell some of the technology related to Isis (or Softcard as it was later renamed) to help Google further improve its Wallet. They also agreed to other profit-sharing arrangements, which probably include a provision for Google Wallet to come pre-installed on designated Android devices sold by them.
It’s a win-win, although Apple has already come storming into the picture with banking, retail and government partners. Google pioneered the technology and would have made some headway if not for Isis, but it may not be too late for the Android maker because the market is poised to grow fast.
Separately, the usual people that are familiar with these matters said that Google was in the process of developing an Android Pay API, which would be released at its I/O developer conference in May. Android Pay will operate independent of its Wallet, and will allow in-store and in-app purchases. It will be based on Google’s Host Card Emulation (HCE) technology.
Google Gets Serious About Kids
Toward the end of last year, Google said it would have special products for kids and it appears to be keeping its word. With just two months gone, Google has come out with as many products for the young and adventurous. The first is a free YouTube Kids app that runs on both Android and iOS, complete with parental controls to check screen time and volume control among other things. "Discovery," "learning" and "entertainment" are the buzzwords being used and indeed Google does have separate tabs for videos, learning and music. Google has to pay content providers and it also plans to have originals for kids, so monetization remains a concern (and a mystery).
Google also joined hands with toy company Mattel to bring a new and tech-enhanced version of the much-loved View-Master.
|
Company |
Last Week |
Last 6 Months |
|
AAPL |
-0.80% |
+25.32% |
|
FB |
-1.15% |
+5.26% |
|
YHOO |
+0.39% |
+17.42% |
|
GOOG |
+3.60% |
-3.75% |
|
GOOGL |
+3.83% |
-4.73% |
|
MSFT |
-0.01% |
-2.92% |
|
INTC |
-3.37% |
-4.48% |
|
CSCO |
-0.34% |
+19.46% |
GOOG = Class C shares (new, non-voting)
GOOGL = Class A shares (old, 1 vote per share)
Other stories you might have missed–
Corporate
Apple Invests in European Data Centers: Apple AAPL will spend 1.7 billion euros to set up two data centers in Ireland and Denmark to be operated by renewable energy. This is Apple’s biggest project in Europe to date (it currently employs 18,300 people across 19 European countries according to media reports).
Support Workers at Tech Companies Getting Unionized: The phenomenal success of technology companies and the amount of money their technical staff get is driving costs in silicon valley and spurring actions on the part of support workers (bus drivers, security guards, custodial employees). Last week, bus drivers of Compass Transportation, which supplies workers to Apple, Yahoo YHOO, eBay and Zynga among others, voted on joining labor union Teamsters to negotiate on better wages and pay on their behalf.
Earlier, 87 bus drivers employed by Loop Transportation and affiliated with Teamsters approved a plan to get them better wages and improved working conditions. Teamsters is in the process of negotiating with Facebook FB, which employs drivers from Loop.
Google’s New Renewable Energy Deal: Google is investing $300 million in a SolarCity fund that is expected to yield an 8% return. The money will support over 20,000 SolarCity rooftop plants for residential purposes. Google’s total investment in renewable energy projects now totals $1.8 billion.
IBM Hosts Analyst Day: International Business Machines IBM said it was allotting $4 billion to its focus areas (cloud, analytics, mobile, social and security software) this year. These areas have generated 27% of its sales in 2014, which is up from 13% five years ago. IBM expects this contribution to increase to $40 billion (44% of analyst-estimated sales) by 2018. The company derives 10% of revenue from its hardware business, which CEO Ginni Rometty said is now profitable. Going forward, IBM will return 75-85% of FCF to shareholders (they now get 100%). IBM reiterated its full-year guidance and said that the negative FX impact on its revenue would be 6%.
Legal/Regulatory
Ericsson Sues Apple: Ericsson filed a complaint for infringement of 41 standard-essential patents with the Federal Trade Commission (FTC). 21The patents relate to its 2G and 4G/LTE standards technology. Apple’s license expired in mid-January, after which the companies couldn’t agree on the rate. Standard-essential patents are usually licensed at lower rates because they generate revenue from volume (since all players have to pay for them). The FTC has the power to block shipment of Apple products into the U.S. and companies generally go to it for quick redressal of grievances.
Apple Asked to Pay Up for Patent Infringement: A Texas jury found Apple guilty of patent infringement and ordered it to pay $532.9 million. The three patents in dispute were found valid by the court. Apple promised to appeal the case and countered the argument saying that Smartflash (the patent holder) didn’t deserve any respect for the patents, that witnesses for Apple couldn’t be bothered with reviewing the patents, that Smartflash didn’t have control of the patents and that it waited too long to file the suit.
The attorneys for Apple also said that Smartflash’s demands were excessive considering that sale of Apple devices didn’t hinge on its technology. To arouse sympathy, they also said that “Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented.”
Google’s Schmidtt Said to Be Meeting EU Chief: Google will meet EU chief Margrethe Vestager this week to talk about an EU probe into its business over the past four years. Vestager’s predecessor attempted to settle the issue, but Google’s competitors like Microsoft and other companies affected by Google’s practices protested. Later, the European Parliament also sought to restrain Google.
Notably, Google’s lobbying costs in Europe were 1.5 million euros in 2013, much lower than Microsoft, which spent 4.75 million euros in the year ending June 2014. Legal trouble on the continent has troubled the Internet giant for some time now, which may have prompted its decision to consolidate operations. The new business will be headed by Matt Brittin, who previously headed the northern and western European division.
FCC Adopts Net Neutrality Rules: The Federal Communications Commission has adopted new rules requiring that Internet service providers (ISPs) treat all legal content equal. This means they wont be able to strike separate deals for heavy users of infrastructure, such as provided by companies like Netflix NFLX, Amazon and YouTube. The rules are good news for these content providers but crucify the infrastructure providers like Comcast and Time Warner Cable that are sure to take the matter to court. The FCC, however, didn’t publish details, making the vague statement that it was a work-in-progress.
Alibaba Shareholders File Class Action Lawsuit: Law firm Scott+Scott has filed a class action lawsuit on behalf of Alibaba BABA shareholders between Oct 21 and Jan 28 for making false and/or misleading statements and omitting to disclose material adverse facts about the company’s business, operations and prospects that subsequently impacted share prices.
New Technology/Products
Google Makes Advances in Artificial Intelligence: Google has created a computer than can learn how to play a video game and then beat others (even expert humans) at them. This is a great test of the artificial intelligence (AI) it is developing and will prove useful once it is ready to be applied to real-world situations. But such a computer/device/gadget is far from fruition, executives admit. Google’s efforts were spearheaded by its $628 million acquisition of DeepMind.
Collaborations and M&A
Google Is Breaking Up G+: Google appears to be taking apart its social network to facilitate the development of its most-loved aspects, i.e. photos, streams and hangouts. It’s already working on next generation products for photos and streams according to management. The future of hangouts is not clear yet, but Google must have great plans for that too: Bradley Horowitz who will be heading both photos and streams, said in December “It's texting, it's telephony, it's one-to-one, it's many-to-many, it's consumer, it's enterprise” as an explanation of its scope.
Google Could Invest in Jawbone: Re/code’s sources are saying that Google is looking to invest in financially struggling wearables device maker Jawbone. The company has raised some $250 million over the past year at a valuation of more than $3 billion. The company’s devices are now increasingly pitted against those from Apple, which previously drove some of its sales.
Some Numbers
Facebook Has 2 Million Active Advertisers: Facebook announced that the total number of active advertisers on the network had touched 2 million. The social networking company managed this by focusing on the SMB segment (30 million small business owners have Facebook pages). The company said that they tend to spend $5 to $50 a day. Also, 80% of advertisers joining the network in the fourth quarter paid for a promoted post indicating high expectations.
Intel/NVIDIA Taking Share from AMD: Jon Peddie Research estimates that Intel gained graphics chip market share in the last quarter. Intel had 71.4% share of the market, up from 66.8% in the year-ago quarter, ahead of NVIDIA, which went from 15.7% to 15.0% and AMD, which slipped from 17.3% to 13.6%. In graphics add-in boards, NVIDIA jumped to 76% from 64.9% in the year-ago quarter, while AMD lost ground, going from 35% to 24%. Add-inboards demand is shrinking because PCs have better graphics these days.
HP Guidance Disappoints: Hewlett-Packard’s first-quarter earnings beat the Zacks Consensus Estimate, but management warned that currency would have a significant negative impact on second-quarter and full-year results. Shares plunged following the announcement.
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