Nokia took a second-quarter revenue hit of about 300 million euros ($354 million) from COVID-19, but “most of that we expect will be shifted to future periods,” said CEO Rajeev Suri on a Friday investor call. Q2 sales in North America were down 4%, a “better result than the company as a whole,” which had an 11% revenue decline, he said. The U.S. “was unfortunately hit by supply issues resulting from COVID-19,” he said. “There is a considerable amount of activity in the market related to the now-completed merger of T-Mobile and Sprint, preparation for the release of additional mid-band spectrum, operators assessing their cloud strategies and more.” Nokia had better than expected results in its 4G LTE business, said Suri. Its 5G SoC “helps us in 4G LTE when we are bidding for these combined deals which have 4G and 5G,” he said. “We haven’t yet felt the impact in any meaningful way from the 5G SoC.” But that will come “in due course,” because there’s a “six-month lag between shipments and actually banking some of the benefits.” The stock closed 7.4% higher Friday at $4.78.
SiriusXM added 200,000 net new subscribers in Q2 despite stay-at-home mandates, said CEO Jim Meyer on a Thursday investor call. Revenue fell 5% from a year earlier on a double-digit hit to ad sales, he said. “We are poised for a strong finish to the year, despite an uncertain economic outlook and rising COVID-19 cases in parts of the country.” Self-paid net subscriber adds are expected to top 500,000 in 2020, he said. Though auto sales on which SiriusXM relies so heavily for subscriber growth declined, Q2 “finished better than it started,” said Meyer. SiriusXM subs penetrated 77% of new cars sold in Q2 and are on track to reach 80% by year-end, he said. “Stay tuned for even more” 360L connected car deployments, following commitments from six tier 1 OEMs, said Meyer. “This deployment is now really gaining steam. We expect to end this year with about 1.4 million 360L vehicles in operation.” SiriusXM expects deployments to “roughly triple” in 2021, he said. Management is pleased that the reduction in Pandora’s ad-supported listening hours “has been abating,” said Meyer. After declining 18% early in Q2, “ad hours finished the quarter down less than 6%,” he said. “We’re seeing gains in hours spent listening to CE devices mitigating declines on mobile and web.”
Best Buy CEO Corie Barry sidestepped our questions during her Northern Virginia Technology Council video chat Wednesday (see report, July 30 issue) about how the pandemic was affecting consumer demand for more discretionary tech products like premium TVs. “We haven’t talked about that publicly,” she said. “About a trillion dollars of spend” last year went to sporting events, movies, cruises and vacations, she said. “A minuscule amount of that is being spent right now. Spending is moving into other buckets because of the way we are living our lives. I just think the idea of what might be discretionary and not will evolve over time because we’re living our lives in a way that is completely unique to anything that has come before.”
PayPal rode the pandemic’s e-commerce spike to its “strongest quarter” since eBay spun it off as an independent public company five years ago, said CEO Dan Schulman on a Q2 investor call Wednesday evening. “Merchants are embracing a digital-first strategy, and these trends have fueled the rapid rise of digital payments. These are durable and meaningful tailwinds.” Q2 transactions grew 26% to 3.7 billion, “rivaling the volumes that we usually experience during the five days between Thanksgiving and Cyber Monday,” said Schulman. PayPal added 21.3 million new customers, a 140% increase from the 2019 quarter, he said. “Net new actives” in Q2 exceeded the number of new customers added in all of 2016, he said. PayPal ended the quarter with 346 million active accounts, he said. “Given our momentum, I believe that we will add approximately 70 million net new actives this year.” PayPal is seeing “a tremendous amount of new cohorts coming in that have never used e-commerce before,” he said. Seniors are “the fastest-growing segment of net new actives,” he said. The stock closed 4.3% higher Thursday at $192.51.
Qualcomm is leaving unchanged its pre-COVID forecast that smartphone OEMs will ship 175 million to 225 million 5G handsets this year, said CEO Steve Mollenkopf on a Q2 call Wednesday. Launches across all regions “remain on track,” but “we expect some minor changes to the launch timing and sell-through of certain devices,” said Chief Financial Officer Akash Palkhiwala. A "few regions” are experiencing “minor delays” in network deployments, said Mollenkopf. Stay-at-home mandates “highlight the critical role” broadband plays, he noted: The “mission” to deploy “breakthrough wireless technologies like 5G has been reinforced and amplified.” The stock closed 15.2% higher Thursday at $107.19. Global smartphone shipments declined by about 21% in Q2, said Mollenkopf. He's encouraged Chinese smartphone demand recovered “month over month” in Q2 after the “sharp decrease” in Q1 “coinciding with COVID-19 restrictions,” he said. “This provides a basis to model rest-of-world handset demand trends.” Without that rebound, Q2 smartphone demand would have been down 30%, he said. Nearly three-quarters of new smartphone models introduced this year in China are 5G, said President Cristiano Amon: China is poised for “broad penetration."
International Trade Commission Administrative Law Judge Dee Lord signed a confidential order Tuesday terminating the Tariff Act Section 337 investigation into Sharp allegations that Vizio and its suppliers infringed five LCD device patents. Their joint termination motion (login required) Monday was based on a settlement agreement for Xianyang CaiHong Optoelectronics Technology, Vizio’s Chinese panel maker, to license the five patents from Sharp. The heavily redacted license agreement was signed July 21 by Sharp Display Device Co. President Taimi Oketani. The ITC voted May 20 to open the Section 337 probe and set a September 2021 target for completing it (see 2007020020).
Buying activity in eBay’s core marketplaces grew 29% in Q2, its “highest quarterly growth rate in 15 years,” said CEO Jamie Iannone on an investor call. EBay hired him in April from Walmart, where he was chief operating office for e-commerce (see personals section, April 14). He was an eBay vice president for eight years before leaving in 2009 to become CEO of SamsClub.com. “Consumer behavior is rapidly evolving and this dynamic has been accelerated by COVID-19," said Iannone Tuesday evening. The pandemic is significantly speeding buying activity growth and "new customer acquisition,” he said. But he’s “not satisfied with where we currently stand,” he said. “We've not executed to our full potential. New competitors have taken share because we neglected our core area of expertise.” EBay wrongly focused on new areas that “could not drive sustainable or profitable growth,” he said. “To be candid, we did not adapt quickly enough to the rapidly changing needs of our customers.” The company has “enormous untapped potential that we absolutely must capitalize on,” he said. “This is what brought me back to eBay.” Reshaping the company will be a “multiyear process,” he said. “Tech-led reimagination, our plan is to become the best marketplace in the world for buyers and sellers.”
Lattice Semiconductor’s consumer business sales declined 17% from Q1 and 43% from the year-ago Q2, said CEO Jim Anderson on a Tuesday evening investor call. Lattice supplies processors for smart home devices and other consumer tech products. “The decline reflects a full quarter of COVID-19 demand impact as well as the expected shift in the mix of our revenue profile over time,” said Anderson. “We remain focused on serving the areas of the consumer market that include applications with consistent multiyear revenue streams and higher margins, where our solutions are enabling customers to differentiate their products.”
Increased "working and schooling from home" due to COVID-19 resulted in a strong PC market in Q2, said Advanced Micro Devices CEO Lisa Su on a Tuesday investor call. Desktop processor sales declined sequentially, but AMD had record quarterly unit shipments and revenue in laptop processors. AMD 90 days ago expected COVID-19-related weakness to bring the PC market down in the second half, she said: It’s now expecting PC processor sales will grow. The pandemic increased the “overall” PC market and stimulated a “strong shift from desktop to notebooks,” she said. “The second half will continue to be good for notebooks and PCs overall and that's part of this idea that PCs are now essential.” The stock closed 12.5% higher Wednesday at $76.09.
The pandemic is creating challenges and “opportunities for us and our industry,” supplying headsets for COVID-19's “hybrid work environment,” said Poly interim CEO Bob Hagerty on a quarterly call Tuesday. “Hybrid working trends are here to stay.” It’s estimated 30% to 40% of employees globally “will continue to work from home, with many adopting a flexible work schedule, splitting their time between the office and home.” The “net effect” is a bigger total addressable market “and a long-term growth opportunity for our company, which we are working aggressively to capitalize on,” he said. Headset demand remains “elevated,” putting stress on Poly’s supply chain, said Hagerty. “Our factory in Mexico is capable of running at full capacity, but we are having to flex our production based on component availability.” The stock closed 17.4% higher Wednesday at $21.89.