Galaxy S10 Estimates Raised; Suppliers Still Look Cheap
Analyst Ming-Chi Kuo, responsible for plenty of accurate scoops over the years about Apple's (AAPL) product and manufacturing plans, just hiked his 2019 shipment estimates for Samsung's (SSNLF) Galaxy S10 line. Reporting that early demand for the Galaxy S10e, S10 and S10+ has been "better than expected," Kuo said he now expects sales of 40 million to 45 million S10 phones in 2019, up from a prior forecast of 30 million to 35 million.
Interestingly, Kuo, who is based in Taiwan, also says that S10 demand has been stronger than expected in China, where Samsung has been struggling in recent years and total demand has been slumping. Research firm IDC didn't include Samsung on its list of the Chinese smartphone market's top five vendors for either Q4 or the whole of 2018.
As I discussed earlier this week, analyst estimates for the Galaxy S10 have felt too low, given that reviews have been good and (even if one excludes the Galaxy S10 5G, which hasn't yet launched) meaningful hardware improvements have been delivered. And to some degree, a better-than-expected reception would be encouraging for the broader smartphone market, given how pessimistic investor sentiment towards the space has become.
Galaxy S10 chip suppliers, many of which traded lower on Thursday amid a broader market selloff, are still generally trading at fairly low multiples. Beneficiaries of a better-than-expected S10 launch include Skyworks (SWKS) , Broadcom (AVGO) , Qorvo (QRVO) and -- though it gets a much larger percentage of its sales from Apple (AAPL) than Samsung -- Cirrus Logic (CRUS) .
New Tech Survey Bodes Well for AMD's Server PushMarch 7, 2019 | 1:54 PM EST
In its latest annual survey of the buying habits of IT pros, IT marketplace Spiceworks found that 16% of surveyed pros use AMD (AMD) server CPUs, and that 93% use Intel (INTC) CPUs. However, another 5% of respondents said they plan to use AMD in the next two years, and judging by some of the survey's other findings as well as AMD's server CPU roadmap, AMD could do even better than that.
While respondents were much more likely to associate AMD's brand with "value for the money" than Intel's, they were also more likely to associate Intel's brand with high performance and energy efficiency, as well as "relevant products for my business size." That could change following the mid-2019 launch of AMD's second-gen Epyc server CPUs, which -- thanks to their use of a revamped CPU core architecture and more advanced manufacturing process -- are promised to deliver twice as much performance per CPU socket and a 50% drop in power draw when performance is unchanged, compared to AMD's first-gen Epyc line, which launched in mid-2017.
It's also worth noting that while 16% of respondents reported using AMD, AMD only estimates it had a mid-single digit server CPU share at the end of 2018, and is aiming to reach a double-digit share within four to six quarters. Among the reasons for this: Intel currently has a dominant server CPU share among most large enterprise and cloud server buyers, and many of the firms that deploy both AMD and Intel-powered servers have much larger Intel deployments. To paraphrase an old saying about IBM (IBM) , no one ever gets fired for buying Intel.
With the qualifier that certain types of IT buyers might be over- or under-represented in Spiceworks' survey, the survey results are encouraging for AMD. They suggest that familiarity and interest in its server CPUs is meaningfully higher than what its market share numbers would suggest, and that some of the misgivings that would-be AMD buyers currently have involve things that the company's next-gen server CPUs should address in a big way.
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