Vizio can zoom into the graphics layer of a display screen to help visually impaired viewers better navigate TV onscreen menus, said a U.S. patent application (20180275856) published Thursday at the Patent and Trademark Office. Visually impaired consumers often have trouble viewing menus on their TV screens, said the application, which describes a “zooming display system” featuring multiple “numbered zones,” each controllable through an “arrow/navigation key” or by pressing the appropriate number on the remote. Friday, Vizio didn’t comment.
BlackBerry CEO John Chen rejected an analyst’s depiction of the company on a Friday earnings call as an aggressive litigator accustomed to “flexing” its “legal muscles" by "going after some big players” with patent infringement lawsuits. Responded Chen: “Compared to some of the people we go after, we really don’t have that much of a muscle.”
Sony Music is shortchanging the estate of late singer-songwriter Rick Nelson by withholding royalties due from international streaming sales of his recordings, breaching his 1976 contract with then-CBS Records, alleged a Tuesday complaint (in Pacer) in U.S. District Court in Manhattan. The label agreed to pay Nelson a basic 24 percent royalty on net sales, with twice-yearly accounting statements, said the contract (in Pacer). The complaint seeks class-action status on behalf of artists who signed similar agreements with CBS Records, later renamed Sony Music after Sony America bought the label in 1987. Nelson, who died in a 1985 plane crash, released more than 30 albums, “almost all of which” made the Billboard Top 100, said the complaint. Top 10 hits including “Poor Little Fool,” No. 1 in 1958, and “Travelin’ Man,” top in 1961, it said. Sony Music “impermissably” assesses an “intercompany charge” for its international sales that takes up to 68 percent “off the top” of global revenue earned from streaming sales, said the complaint. It “bases the artist’s royalty rate on the remainder, which methodology directly violates” the 1976 contract, it said: Sony Music “underreports revenue generated from foreign sales” by “improperly” applying the intercompany charge. Wednesday, Sony Music declined comment.
SiriusXM stock's 10.3 percent fall Monday led Wedbush Securities' Michael Pachter Tuesday to forecast shareholders will reject the $3.5 billion takeover (see 1809240047). “Given that the exchange ratio is fixed,” the implied deal price was just above $9 a share, nearly 1 percent below Pandora’s closing Friday, the analyst wrote investors. The companies didn’t comment. Sirius “could have easily divested a large cash component," said its Chief Financial Officer David Frear when asked on a Monday conference call why the deal was structured as all-stock. “The trouble with a cash component is you’re reducing the equity upside for Pandora shareholders.” Pachter rates the deal a win-win nonetheless for both partners. In light of Pandora’s “history of losses” and the “intense competitive environment” in the streaming-music space, Dougherty's Steven Frankel rates the “offer as fair” for Pandora shareholders. Frankel doesn't expect “competing bids.” Pandora can walk if it pays Sirius $105 million in termination fees, said an SEC filing Monday. That “was an important component for our board,” said Pandora CEO Roger Lynch.
Coping with the U.S.-China trade war “continues to be a moving target,” said Mark Mondello, CEO of contract manufacturer Jabil on a Tuesday earnings call. “You wake up one day, there’s a tweet, you wake up 48 hours later, something else is going on,” said Mondello. “It’s a very complicated issue in terms of what’s going to be, how bad will it get.” There’s some “conversation” in the supply chain that the trade war is “just going to be kind of a little bit of a tit for tat, and then there’s people that have the opinion that it could extrapolate to something much bigger,” he said. If U.S. tensions with China “escalate in a way that we don’t anticipate, but if they were, it absolutely is going to affect our business, as it will everybody’s,” he said. Mondello personally and in dealing with customers tries “not to get too obsessive about how bad things can get,” he said. “We do planning scenarios internally on what we would do, but assuming this thing doesn’t blow up in a big way, I think Jabil’s really well-positioned.”
Tariffs took effect on $200 billion worth of Chinese imports, including duties the tech industry fought unsuccessfully (see 1809120049). China retaliated later Monday with tariffs on $60 billion in imports from the U.S. President Donald Trump has threated to “immediately pursue” a fourth installment of tariffs on $267 billion worth of additional Chinese imports as a countermeasure. Micron and Voxx (see 1809210002) are among those accepting tariffs as a fact of life and increasingly turning their sights toward mitigation strategies. “Product-specific” exclusion requests are another option, emailed David Cohen, customs law expert with Sandler Travis. The Office of the U.S. Trade Representative had sought exclusions on the first two rounds of tariffs that took effect July 6 and Aug. 23. “No decisions have been made on the thousands of requests,” Cohen said.
SiriusXM's agreeing to buy Pandora for $3.5 billion in an all-stock deal means they would pay close to $2 billion on royalties next year combined, said Sirius CEO Jim Meyer on a Monday conference call. “The two companies have a tremendous respect for what artists bring to our business, what songwriters bring to our business. We obviously fully endorse models that compensate them for what they bring. I think this merger will be good for everyone in music for one simple thing, and that is, if we’re successful, we will begin to shift share from those channels that are not paying performance rights to musicians.”
Micron Technology expects its gross margins to take a “near-term” hit “to the tune of 50 to 100 basis points” from the 10 percent tariffs on $200 billion worth of Chinese imports that take effect Monday and are due to rise to 25 percent Jan. 1 (see 1809180035 and 1809180020), said Chief Financial Officer Dave Zinsner on a Thursday earnings call. Shares fell nearly 8 percent after hours and closed 2.9 percent lower Friday at $44.74. “We are working to gradually mitigate most of the impact from these tariffs over the next three to four quarters,” said Zinsner. “Clearly, tariffs are impacting us,” and reducing Micron’s exposure to the damage “obviously takes some time,” he said. “We have to do some things operationally to get ourselves in a place where it isn’t as impactful, and so, it’ll be a quarter or two probably before we start to see some benefit from the improvement there.” Micron argued unsuccessfully for removing from the Trump administration’s “retaliation list” the tariffs on 8473.30.11 printed circuit assemblies imported to the U.S., which include the “memory modules” it makes at the fab it owns in Xi’an, China.
That U.S. tariffs on $200 billion worth of Chinese imports take effect Monday gives potential challengers, including from the tech and telecom industry, little time to weigh a court challenge blocking the duties before they take effect. The quick turnaround, published in a notice U.S. Trade Representative Robert Lighthizer released Monday (see 1809170053), bore out CTA member companies’ worries the Trump administration would release its order imposing the tariffs soon after the comment period expired Sept. 6. The new tariffs "run afoul of the carefully tailored provisions” of the 1974 Trade Act, “which require any action to be within the scope [an] investigation," said CTA President Gary Shapiro Monday.
Joining tech, telecom and other heavyweights, Logitech opposed Part III of tariffs (see 1809130056) on Chinese goods imported to the U.S. over intellectual property disagreements between the superpowers. The manufacturer also was in the company of hundreds of others opposing tariffs on connected devices under two subheadings, commenting in docket USTR-2018-0026. If the Trump administration doesn't spare those goods, Logitech wants the U.S. Trade Representative to exempt tariffs on what's from “wholly foreign-owned enterprises” (WFOEs) in China. The company imported more than $250 million worth of such goods from China last year. Logitech’s IP and proprietary technology “is better protected at its WFOE in China” than it would be if entrusted to “a third-party manufacturer in any other country,” said the company. “Logitech’s intellectual property and proprietary technology actually would arguably be less protected if it were to source computer mice, video conference cams and webcams from unrelated third parties outside of China.” Attention now turns to how long the administration will take to publish its determination on which items on the proposed list will stay and which will go, when they will take effect and whether they will be assessed at 10 percent or 25 percent.