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Tech Stock Roundup: PC Shipments, FB Workplace, AMZN India


Last week was a relatively quiet one for technology stocks with the continued decline in PC shipments weighing on exposed stocks. But Facebook FB did officially launch Workplace and Amazon AMZN showed signs of gaining mindshare in the Indian retail space.

Here’s a quick look at the top stories:

PC Shipments Fall

Both IDC and Gartner announced third-quarter PC shipment numbers last week. Both agreed that mature markets were stronger than emerging markets. Gartner analyst Mikako Kitagawa mentioned two reasons for the eighth straight quarter of decline.

Since consumers own too many devices already that take care of many functions anyway, there is less need to upgrade their PCs, which lengthens the PC replacement cycle. The second reason mentioned was the availability of mobile devices in emerging markets, where many don’t feel the need for a PC.

Gartner doesn’t include Alphabet’s GOOGL Chromebooks, so its market share numbers differ from IDC slightly. But both firms agree that Lenovo remains the leader (although struggling from weak demand in China) with HP HPQ now close at its heels with about 21% share each. Dell is third with 14.7% share according to Gartner (IDC 15.8%).

Asus with 7.8% (IDC 6.9%) and Apple AAPL with 7.2% (IDC 7.4%) are the other top players. Apple saw the greatest decline according to both, but this may be because of cannibalization of its product categories rather than real market share loss.

IDC painted a more optimistic picture than Gartner, saying shipments were better than expected and that PC companies had finally started building some inventory again to “update products to leverage new processors and operating systems, to deliver a better computing experience encompassing more mobile, secure, and faster systems, and to accelerate PC replacements."

Facebook Workplace

Facebook’s answer to the problem of connecting employees launched recently. The service is called Workplace, instead of Facebook for Work, and it helps employees stay in touch with each other, corporate events and messages, and also with customers using the service.

Facebook Groups allows users to form groups for communication. They can also stream live Q&A from key executives and chat or message co-workers. The best part: it comes cheap at $3 per user for companies with up to 1K users and drops to $2 for companies with 1K to 10K users and $1 for larger groups.

Amazon Beating Flipkart in India

A Bank of America Merrill Lynch survey of a thousand consumers found that 52% prefer Amazon, 34% Flipkart and around 8% Snapdeal. Flipkart and Amazon are currently the two leading ecommerce players with a respective market share of 43% and 28%.

The firm estimates that with correct execution Amazon can increase its share to 37% by 2019. The Diwali shopping season is on and already constitutes a third of ecommerce sales in the country. So how Amazon this season will be is a good indicator of its fortunes going forward.

KLA-Lam Merger Called Off

The justice department has said that it will not continue with the consent decree the semiconductor equipment makers had been negotiating. This doesn’t come as much of a surprise since the companies announced in August that there could be a delay in the decision. Both companies traded down as a result although KLA shares dropped more.

While KLA and Lam Research LRCX don’t have the necessary product overlap to be able to corner any market segment, they happen to be leading players in different market segments (Lam specializing in deposition and etching and KLA in inspection and metrology). This means that they will command a larger share of the equipment market overall.

The DOJ particularly felt that the merger "could have created the potential for Lam Research to foreclose its competitors by reducing their timely access to key KLA-Tencor equipment and related services."

The companies agreed mutually to cancel the merger, so neither party owes termination fees.

To know more, read Lam Research, KLA-Tenor Cancel Merger on Antitrust Worries


Last Week

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Other stories you might have missed-


Apple Seat on Didi Chuxing Board: Adrian Perica, Apple's head of mergers and acquisitions, joined Didi’s board in June, influencing Uber’s decision to quit the market. This looks like an important alliance and could be the necessary groundwork to create a market for its self-driving technology.

Apple also has a new R&D center in Shenzhen that is working to build relationships with local players. To know more read Apple Reportedly Has a Seat on Didi Chuxing's Board and Apple to Set Up R&D Center in Shenzhen, China.

Apple Pay in Russia: Russia became the tenth country worldwide for the Apply Pay launch. In Russia Apple’s partners include Sberbank and Mastercard. The payment system requires NFC-enabled POS systems to operate.

Cisco CTO Quits: Zorowar Biri Singh, who followed Padmashree Warrior as Cisco’s chief technology officer in July last year, is leaving the company. The decision stems from an “updated alignment” of the company’s engineering teams. Accordingly, CEO Chuck Robbins is reorganizing its “engineering and development efforts” under executives Rowan Trollope and David Goeckeler, recent appointees to Robbins’s executive leadership team.

Microsoft’s European Cloud Investments Up: Europe is said to be the second largest cloud computing market after North America with a 21% share of total spend. So Microsoft is doing all it can to strengthen its position in the region. EU laws require data storage within the region, so the company has spent around $3 billion dollars over the past year to more than double its cloud capacity.

During a tour of several European cities, CEO Nadella also said that from 2017, Microsoft Cloud services will be delivered to the French from datacenters located in France. He also mentioned some high-profile customers including the UK Ministry of Defence, the Renault-Nissan Alliance and Ireland's Health Service Executive.

New Technology/Products

Facebook Video Streaming: Facebook will now stream videos from the platform to your TVs through devices like Apple TV and Google Chromecast. The feature is already available to Apple TV users and Chromecast users will be able to avail of the feature “soon.”

Facebook Marketplace: Facebook has announced a marketplace for selling locally available goods as it moves to get deeper into the business of connecting consumers with business users. The service is accessible upon clicking the shopping icon inside its apps, which takes users to a page where products from nearby sellers are listed.

This actually seems to be a middle ground between ecommerce and advertising, or another (local) kind of advertising, by getting users into the habit of searching for products and services directly, by browsing or searching within the app. Facebook doesn’t intend to directly sell products, so it’s not really in direct competition with companies like Amazon or eBay, at least not yet. To know more read: Facebook Takes on E-Commerce with Marketplace

Facebook Messenger Lite: Specially designed for emerging markets with slow Internet speeds and a prevalence of Android phones, the recently-launched Messenger Lite uses about 10MB of space or a quarter of the space the full app takes. It allows users to send text, photos, links and stickers for basic communication but probably doesn’t support more data intensive operations like video and chatbots. To know more read: Facebook (FB) Brings Messenger Lite, Eyes Emerging Nations

Intel Drone: Following its acquisition of German company Ascending Technologies in Jan 2016, Intel became the owner of some nice drone making technology (Ascending has been making drones since 2009). Last week in Germany, Intel launched the first Intel-branded drone called Falcon 8+ offering electronic system redundancy, "aerial-sensing," and detailed imaging at millimeter accuracy. Intel offers the cockpit controller and power technology.

Microsoft Hololens in 6 New Countries: Microsoft is launching its mixed/augmented reality headset Hololens in six new markets including France, Germany, Ireland, the UK, Australia and New Zealand. The $3K device is based on Microsoft’s Holographic operating system and distinguishes itself by mixing up the real and imaginary worlds. This has opened up business use cases for Microsoft and helped it sign on important customers like NASA, elevator maker Thyssenkrupp and aerospace and defense giant Airbus.

Google Home Comes to Market: The voice-controlled Google Home device supported by Google Assistant debuted recently into a market where Amazon’s Echo and its supporting assistant Alexa have already made waves. Amazon has already sold 3 million units since 2014 according to CIRP, so Google is a rather late entrant. But Google does have a robust ecosystem and also a lot of information on its users, so it can potentially be more useful. And, like Amazon, it will have SDKs for hardware makers by next year, so they can make devices that connect with Home.

Google Project Fi Group Plans: Project Fi, Google’s wireless service for Nexus and Pixel phones, just announced a group plan. The plan allows users to add up to 5 lines to the group at $15 each (the initial connection is for $20). To recap the pricing strategy: customers need to pay $10 per GB in 1 GB increments with the company crediting back unused data at the end of each month.

M&A and Collaborations

Google-Facebook: Google and Facebook are part-funding a project by a Chinese company to lay down the a trans-Pacific cable route between Los Angeles and Hong Kong called the Pacific Light Cable Network (“PCLN”). The goal is to establish faster data transfer between the continents and it’s currently estimated that the route will transmit 120 Terabits per second (Tbps) of data across nearly 8,000 miles. To know more read: Google, Facebook Partner to Build Trans-Pacific Cable

Microsoft in Brazil: Microsoft has partnered with Banco Votorantim, a leading Brazilian lender to scout and invest in fintech startups in the country. Accordingly, Votorantim is investing around 3 million reals, or $930K in Microsoft’s Brazilian fund, which has accumulated $17 million reals to date. The focus is on later-stage startups, i.e. companies that have passed the validation and product development stage and are looking for funds to commercialize and scale up.

3M-Verily: The companies are developing a technology platform to analyze population-level data sets to supply hospitals with data needed for better healthcare. 3M is bringing health data coding, classification and risk-stratification tools to the table while Alphabet’s Verily is bringing its data analytics, software tools and algorithms.

Google Buys Famebit: Google has bought this startup for an undisclosed amount because it has helped connect content creators on YouTube, Instagram, Facebook and Twitter and brand owners like Canon, ActiVision, Adidas, Rovio, Sony and Conair, as well as L’Oréal, Paramount, Marvel, GameFly, Fiji Water and Office Depot. This should further help YouTube’s ad supported service.

Twitter Live Stream Deal: Twitter has doubled down on videos and last week saw it adding another partner: Victoria Racing Club (VRC), which means the company will now live stream the 2016 Emirates Melbourne horse racing games on Nov 1. It will also host pre-race and post-race commentary by Seven Network. The Aussie deal is the first of its kind outside the U.S.

The company said that Bloomberg Politics' presidential debate broadcast on Sunday night reached 3.2 million unique viewers, a substantial increase over the first presidential debate, which reached 2.5 million unique viewers. The second debate was the most tweeted ever: more than 17 million debate-related Tweets were sent and seen by more than 3.6 billion times worldwide both on and off of Twitter.

Intel-Luxottica: Intel has partnered with Luxottica to launch smart sunglasses called Radar Pace under the Oakley brand. The sunglasses use Intel’s Real Speech technology and small ear buds to create a voice activated coaching system that will help athletes with their exercise routines. Select retail outlets in Europe, North America and Australia will see the glasses soon. This will empower industrial customers by offering them new insights and thereby facilitating faster decision making to seize new growth and opportunities.

Microsoft-ABB: Microsoft tied with ABB to bring its installed base of 70 million connected devices and more than 70K digital control systems to Azure. ABB has agreed to use the cloud platform to create an industrial cloud to help customers in the robotics, marine and ports, electric vehicles and renewable energy segments.

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