Apple's News+ Service Is Reportedly Off to a Solid Start
Buried within a recent New York Times piece about publishers betting on Apple's (AAPL) News+ service: Two sources tell the Times that more than 200,000 people signed up for the service, which costs $9.99 per months and provides access to over 300 magazines and select newspapers and online publications, within 48 hours of its March 25th launch.
That's a solid start for News+, which (as recently noted by analyst Ben Bajarin) is being strongly promoted within Apple Stores. And to some degree, the start could bode well for Apple's Arcade gaming service and TV+ video service, which both arrive in the fall.
It's worth remembering that Apple has racked up over 50 million paid subscribers for Apple Music (No. 2 overall) even though the service didn't launch until mid-2015, long after Spotify (SPOT) and a slew of other online music services had arrived on the scene. Though there's no guarantee that any of its new services will be as successful as Apple Music, Apple's ability to promote its new content services for free to a giant and relatively affluent installed base works in its favor, as does the quality content it has lined up and its ability to potentially bundle various offerings.
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As Companies Keep Betting on Wi-Fi Hardware, Chipmakers Are in a Good Spot
Juniper Networks (JNPR) just closed its $405 million deal (announced last month) to buy Mist Systems, a provider of enterprise Wi-Fi/Bluetooth access points and related software and cloud services. Mist tries to stand out in a crowded enterprise Wi-Fi market also featuring Cisco Systems (CSCO) and HP Enterprise (HPE) by emphasizing its use of AI/machine learning to do things such as automate management tasks and provide insights about network activity.
Juniper is hardly alone in making a Wi-Fi acquisition. Last year, rival Arista Networks ANET bought Mojo Networks, an enterprise Wi-Fi player that trumpets its cloud-based management software. And earlier this year, Amazon.com (AMZN) entered the home Wi-Fi hardware market by acquiring startup eero.Playing some role in this M&A wave: As the amount of traffic collectively handled by home, enterprise and carrier Wi-Fi networks keeps growing, and as the number of devices that need to be supported by these networks keeps growing as well, total spending on Wi-Fi systems and management software is bound to keep trekking higher. Wi-Fi chipset suppliers such as Broadcom ( AVGO) , Qualcomm ( QCOM) and Quantenna ( QTNA) (set to be acquired by ON Semiconductor ( ON) ) are poised to benefit. In the near-term, these companies should also get a lift from the adoption of the Wi-Fi 6 (802.11ax) standard, which delivers speed, efficiency and battery life gains relative to the existing 802.11ac standard.
Tencent and Broadcom's Big Debt Offerings Could Pave the Way for Fresh M&A
At a time when private equity funds continue raising massive amounts of cash, perhaps it isn't too surprising that Broadcom (AVGO) , a tech company that often takes a private equity-like mindset to M&A and cost-cutting, recently raised a whopping $11 billion in debt, after having initially suggested it plans to raise $5 billion to $7 billion. Broadcom has signaled it could follow up on last year's $18.9 billion deal for CA Technologies by making new software acquisitions, and also recently indicated it remains open to making new chip acquisitions.
Separately, Reuters reports that China's Tencent (TCEHY) , which has a massive investment portfolio whose full value perhaps isn't baked in at the company's current valuation, is looking to raise $5 billion in U.S. dollar-denominated bonds this week. With Tencent having a healthy balance sheet and producing large amounts of free cash flow, the company certainly doesn't need the money for its internal operations.
With bond markets having rallied in 2019 and the Fed having assumed a more dovish stance, money remains quite cheap for companies with strong debt ratings and cash-flow profiles. It wouldn't be surprising to see other large-cap tech firms with an appetite for M&A make large debt offerings as well.
Microsoft's IoT Efforts Remain a Key Strength for Its Cloud Business
Microsoft (MSFT) and BMW announced on Tuesday that they're launching the Open Manufacturing Platform (OMP), a tech framework meant to help manufacturers quickly deploy Internet of Things (IoT) hardware that integrates with Microsoft's Azure cloud platform. BMW, which already has over 3,000 "machines, robots and autonomous transport systems" on an IoT platform that's built on Azure, says it will "contribute relevant initial use cases" to OMP.
Though Amazon.com (AMZN) , Alphabet/Google (GOOGL) and IBM's (IBM) cloud platforms offer IoT services as well, Microsoft is arguably out in front here, thanks in large part to the breadth of its efforts. In addition to launching cloud services for managing and analyzing the data produced by IoT devices, the company has done things such as built an operating system for IoT hardware, created a platform for building low-cost microcontrollers (MCUs) to power IoT devices and worked with Nvidia (NVDA) and Intel (INTC) on solutions for processing the data generated by IoT devices close to where it was created.
There's a pretty big opportunity here for Microsoft, as businesses in industries such as manufacturing, healthcare, energy and retail (among others) connect huge numbers of systems and sensors to cloud platforms in order to do things such as cut maintenance costs, respond more quickly to hardware problems and get a better read on their operations. There's also an opportunity for MCU suppliers such as NXP (NXPI) , Cypress Semi (CY) and Microchip Technology (MCHP) , as well as for RF chip suppliers such as Qorvo (QRVO) and Skyworks (SWKS) .
Foldable Phones Should Do Wonders for Hardware Innovation
Whereas most high-end smartphones available today look very similar -- generally, they have a rectangular design in which the screen takes up nearly the entire front of the phone -- it feels as if every company working on a foldable phone has a very different approach to designing one.
Samsung's Galaxy Fold has a "cover display" that's used when the phone is closed shut, and a much larger display that's used when the phone is folded open. Huawei's Mate X has a single display that can fold around the back of the device, allowing the phone to be just 11mm thick when folded. And in a recently-disclosed patent filing, Lenovo showed off a clamshell design in which the bottom of a phone can either curl up to show a secondary display, or be unfolded to allow a large main display to be used in full.
The first foldable phones are pretty expensive and available in limited volumes, and getting the software right is bound to take some time. But for a smartphone industry that has seen sales growth turn negative, there's clearly a lot of potential for foldable devices to drive a fresh wave of hardware innovation and (as prices come down and volumes ramp) boost flagging smartphone upgrade rates.
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