PRODUCTS & SERVICES
AT&T is losing more postpaid phone customers to its rivals than any other U.S. operator, according to a recently published survey. This is interpreted as a consequence of a move by the company to sacrifice market share in the less lucrative segments, to focus on the most profitable customers and increase EBITDA (http://www.fiercewireless.com/wireless/at-t-biggest-subscriber-donor-among-u-s-carriers-analyst)
Regulatory pressure for operators to deliver a good customer experience keeps increasing, with Ofcom now punishing BT’s EE for charging extra money to customers calling customer service (calls from the EU billed as if they were made from the US). EE say they’re putting measures to avoid this happening again (https://www.ft.com/content/f9f6d996-dd4c-11e6-9d7c-be108f1c1dce)
Video
Netflix growing fast globally, with 4Q16 showing the biggest subs growth in history (approx. +5m international, +2m USA) to reach 93.8m global customers (49.4m USA). Investors seem to like this, so shares went up and the company reached $62bn EV, even if they claimed to be “in no rush to push margins up too quickly” (http://www.wsj.com/articles/netflix-profit-tops-expectations-helped-by-subscriber-growth-1484773864)
Enterprise
IBM, presenting results today, has seen how its share price has rallied +30% over the last 12 months (+10pp vs. S&P 500), on expectations that the transformation under way will succeed. However, now they have to deliver, after 3 consecutive years of revenue declines. And investors will look for this in the 2017 guidance… (http://www.wsj.com/articles/ibm-paying-now-for-work-in-progress-1484769775)
Meanwhile, and in quite a contrast with IBM, cloud-specific stocks had a really bad 2016, losing -6.3%, but now could seem more attractive for tech investors vs. other segments (e.g. chips). Obviously the 2016 decline didn’t affect stellar IaaS plays like AWS and Azure, which actually helped Amazon and Microsoft stocks (http://www.wsj.com/articles/cloud-selloff-lets-through-a-ray-of-sun-1484756263)
Advertising
Microsoft apparently getting more serious about LinkedIn monetisation, with a new deal with DataSift, a social data aggregator for advertisers, revealing their intention to sell information on what their users are clicking on or talking about. Advertising represents 20% of LinkedIn revenues, but its growth was decelerating (http://www.recode.net/2017/1/18/14308060/linkedin-datasift-partnership-advertising)
Applications
Some investors got worried this week as US president-elect said in an interview that he would expect more competition for Facebook over the coming years. He said he would like to “create” that competition as he thinks “it’s very important to have that”. But he also recognised that Facebook helped him in the last election… (http://thehill.com/homenews/campaign/314748-trump-says-he-expects-more-competition-for-facebook-over-the-years)
NETWORK TECHNOLOGY
The FCC keeps reducing the price they will pay for US broadcast TV spectrum to be used for mobile networks, as operators’ demand has been very weak. Price has gone from $86bn initially offered, at the auction kick-off, down to $10bn at the moment. Operators seem to think they don’t need the 600MHz band so much… (http://www.wsj.com/articles/fcc-sees-muted-demand-at-tv-airwaves-auction-1484754898)
BIG DATA & ARTIFICIAL INTELLIGENCE
Researchers at the Google Brain Artificial Intelligence research group are testing software that would be capable to automatically design and develop Machine Learning systems, and they’ve just published promising results. If successful, these techniques could accelerate AI implementation across the economy (https://www.technologyreview.com/s/603381/ai-software-learns-to-make-ai-software/)
M&A MOVES
After rumours that they could buy Twitter, Google just announced they will acquire just a part of it, a unit called Fabric launched in 2014 so as to make easier for developers to create new mobile apps, and that is now used by close to 600K developers. Google will integrate this with their own app creation unit (Firebase) (http://www.wsj.com/articles/google-agrees-to-buy-twitter-unit-called-fabric-1484765420)