Tech / Telecom news — 21 Jul 2017
PRODUCTS & SERVICES
Cloud
Microsoft beat expectations with its cloud business results, with Azure revenues growing +97% yoy (!!), offsetting some legacy products to drive the “Intelligent Cloud” numbers up by +11% to $7.4bn/Q. Meanwhile, Office 365 (+43% yoy) is the growth engine for the Productivity segment, which rose +21% to $8.4bn/Q (Story)
SAP also sent a very bullish message on the market for cloud services, with a raise in their revenue outlook for 2017, after beating estimates for top-line growth (+10% yoy to €5.8bn) in 2Q17, a big success in the shift from legacy, on-premise services to the cloud. New cloud bookings grew +33% in the quarter (Story)
RETAIL
US retail giant Sears has decided to start selling its Kenmore brand of home appliances through Amazon, making the symbolic move to use a different channel from its own stores, and again showing Amazon’s momentum to dominate retail in mostly all categories, as Sears is doing this at the risk of losing traffic in stores (Story)
SOFTWARE ENABLERS
Artificial Intelligence
Google’s D Hassabis, the Deep Mind founder and CEO and a key AI guru within the company, believes that for AI to progress towards “general intelligence”, it will require very different approaches to current ones, including the need to adopt solutions from biological / human systems and exchanging ideas with neuroscience (Story)
HARDWARE ENABLERS
Network technology
T-Mobile USA’s CTO has commented that the 3.5GHz spectrum is “the most formative block of spectrum emerging globally for 5G”, and has said that his company has huge interest in this band. T-Mobile is pressing the FCC to auction 150MHz in the 3.5GHz band, a complex task in the US, with plenty of stakeholders involved (Story)
Meanwhile, Artemis, a wireless technology startup, is targeting US carriers which recently acquired spectrum in the 600MHz band. Artemis will show demo of their new modulation technique (promising to “blow the doors off” in spectral efficiency) at MWC Americas, using vacant channels in 500MHz (“TV white spaces”) (Story)
ZTE has given a very positive guidance for its coming 2Q17 results, with profits expected to grow +32% yoy, beyond expectations, making shares go up by +10%. Very impressive as the Chinese market for smartphones (approx. 30% of ZTE’s revenues) is in decline. Exposure to fixed line equipment (vs. wireless) has helped (Story)
Chips
The current fight with Apple showed clearly in Qualcomm’s 2Q17 results, with the company’s patent-licensing division falling -42% in revenues, to $1.17bn/Q. This drove profits -11% yoy. Before the legal dispute, Apple used to pay Qualcomm around $10/iPhone in royalties. Chip sales partially compensated the problem (Story)
CAPITAL MARKETS
Telecoms have moved from being a best-performing industry at S&P500 last year (+18%), to be one of the laggards in 2017 (-15% YTD). This has been mainly driven by the current price war in US wireless, with all major players now offering unlimited data, with additional help from expectations of higher interest rates (Story)
Meanwhile, the S&P500 for Information and Technology just surpassed the previous peak from March 2000, in the middle of the dot-com bubble, driven by a very different set of companies, showing the volatility implicit in tech, where disruption abounds. Only 5 out of 22 within the 2000 index have increased their market cap (Story)
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