Markets gave a thumbs-up of sorts to the news that Pinterest (PINS) co-founder Ben Silbermann is stepping down as CEO (while remaining chairman) and will be replaced by Google exec Bill Ready. Shares rose 1.3% on a flattish day for tech, though that still leaves them down 45% year-to-date and 75% over the last 12 months.
The good news: Ready, who was Google's (GOOGL) President of Commerce, Payments & Next Billion Users and before that served as PayPal's (PYPL) COO, both appears to be a capable exec and has a background that should serve Pinterest well as it tries to flesh out its e-commerce/payments features to help grow its top line. In some ways, Pinterest is a product-discovery platform as much as it is a social network, and with its average revenue per user (ARPU) standing at just $4.98 in North America and $1.33 globally in Q1, there still appears to be a lot of headroom to improve monetization. Ready, who over the last couple of years helped overhaul the Google Shopping platform, could very well succeed in driving those ARPU numbers significantly higher.
The bad news: Silbermann has effectively been the face of Pinterest since it launched in 2010, and it's hard to imagine that he'd be stepping down as CEO unless his company, which saw its monthly active users (MAUs) drop 9% annually in Q1 and guided in April for its annual revenue growth to decelerate from 18% in Q1 to 11% in Q2, continues having a rough time. And of course, Snap's (SNAP) Q2 warning and other downbeat commentary from various online ad and e-commerce players makes the notion that Pinterest has seen additional top-line headwinds since it guided in April quite plausible.
What's more, it's hard to imagine that Pinterest, which reportedly held buyout talks with PayPal last year and has remained the subject of M&A speculation since then, would make a CEO change like this if it was on the verge of being sold. One can never say never, but hiring a high-profile outsider such as Ready to replace Silbermann suggests Pinterest's focus for now is on growing as a standalone company rather than pitching itself to suitors, as it continues dealing with both company-specific and industry-wide growth headwinds.
Why a Report About an Apple 5G Modem Setback Sounds Believable
Qualcomm's (QCOM) stock popped on Tuesday after analyst Ming-Chi Kuo, who has been responsible for many Apple-related (AAPL) scoops over the years, reported that Apple's efforts to develop its own 5G modem haven't gone as planned and that -- in contrast with prior reports that had Apple launching iPhones featuring its own modems next year -- Qualcomm will remain Apple's sole iPhone modem supplier in the second half of 2023.
Aside from Kuo's track record, the iPhone modem report sounds believable due to how much Qualcomm's rivals have struggled to develop competitive 5G modems over the years.
After all, Apple only settled its patent dispute with Qualcomm in 2019 after reports emerged that Intel (INTC) wouldn't have a 5G modem that Apple was planning to use in its 2020 iPhones available in time (Apple then bought much of Intel's modem business to kickstart its internal modem effort). And it was only last year that MediaTek, Qualcomm's biggest mobile SoC rival, launched a 5G modem that supports millimeter-wave spectrum bands. Also, while Samsung has been shipping home-grown 5G modems for years, Qualcomm's modems often outperform them in tests.
Kuo did add that he thinks Apple -- not known for throwing in the towel on an effort like this -- plans to keep developing its own 5G modems, so it's still quite possible that iPhones containing Apple-designed modems will launch in 2024. But (assuming Kuo's report is on the mark) the report does act as a reminder of how difficult it can be to match Qualcomm's 5G-related engineering work, even for a company with Apple's chip design pedigree.