Huawei is seeking to beat Samsung to market with the world’s first foldable smartphone using displays sourced from Chinese panel maker BOE, Nikkei reported. Huawei and Samsung representatives didn’t comment. Huawei Consumer Business Group CEO Richard Yu is scheduled to keynote IFA Aug. 31 in Berlin. BOE is partnering on a Gen 10.5 LCD display fab in Hefei, China, with Corning, which Wednesday told analysts that display cover materials don’t yet exist for foldable smartphones that would be sufficiently bendable and durable (see 1807250063 or 1807250008).
Qualcomm’s decision to terminate its $44 billion agreement to buy NXP Semiconductors (see 1807250062) “was a difficult one,” but “continued uncertainty overhanging such a large acquisition introduces heightened risk,” said Qualcomm CEO Steve Mollenkopf on a Wednesday earnings call hours after announcing the decision. Ending the deal triggered Qualcomm’s payment to NXP Thursday of a $2 billion termination fee, said Qualcomm. Its shares closed 7 percent higher Thursday at $63.58, while NXP shares closed 5.7 percent lower at $92.81.
Corning is working to develop cover materials for smartphone displays that will be “truly” foldable, said CEO Wendell Weeks on a Wednesday earnings call. Though foldable smartphones are an idea “hyped for a number of years,” the technical challenges remain daunting, said Weeks. "Could we basically make something small, but then you can fold it out and it would become something big?” he said. There’s “real interest” among smartphone OEMs in fashioning a device that fits that, Weeks said. Chief Financial Officer Tony Tripeny expects no “material impact” from the Trump administration’s “enacted or contemplated tariffs.” TVs aren't now proposed for tariffs against Chinese imports, and Corning has a “philosophy to manufacture products in the same region as our customer,” he said. The sixth-generation Gorilla Glass cover glass introduced last week is getting “very strong interest” from smartphone makers, said Weeks. After the company reported Q2 sales rose about 10 percent from the year-ago period to $2.7 billion and it raised its full-year forecast, the stock closed up 11 percent to $33.21.
Initial subscriber response to the Android and iOS streaming apps that SiriusXM introduced in May, including launch of the company’s first Howard Stern video offering (see 1804250005), “has been excellent, with engagement climbing and strong ratings in the app stores,” said CEO Jim Meyer on a Wednesday earnings call. The apps are part of a “major push” to use streaming “to drive engagement with SiriusXM outside of the car,” said Meyer.
CTA wants the Office of the U.S. Trade Representative to remove 54 tariff lines involving many chip-related items plus things like motion sensors from imports from China targeted for a second tranche of 25 percent duties, said Sage Chandler, vice president-international trade, in comments Monday in docket USTR-2018-0018. Chandler’s testimony at the USTR’s Tuesday hearing said the tariffs would bring “disproportionate” harm to U.S. consumers and businesses without thwarting allegedly unfair Chinese trade practices, emailed a CTA spokesperson. "The tariffs will not only impact electroindustry manufacturers’ supply chains, but also may be passed on to their customers’ supply chains and the broader U.S. industrial and infrastructure base," commented the National Electrical Manufacturers Association. Lutron also had concerns. Dell said such measures “would further undermine U.S. competitiveness in information technology.” It said it's "deeply troubled by the cumulative and self-destructive impact" of such penalties "on critical information technology inputs.” Voxx International wants five tariff lines removed, it said, including antenna components.
Several tech industry allies will testify Tuesday against 25 percent Trade Act Section 301 tariffs on imports from China on the Office of the U.S. Trade Representative's first of two days of hearings, said a new witness list. Sage Chandler, CTA vice president-international trade, will speak, as expected (see 1807200059). Logitech and Universal Electronics will argue for excluding remote controls and other devices imported from China, their comments in docket USTR-2018-0018 showed. The “vast majority” of Universal’s remotes are manufactured in Chinese factories that Universal owns and operates, said CEO Paul Arling, who will testify. Imposing the additional duties on those products “would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers,” by forcing higher subscription costs for pay-TV and over-the-top services, said Arling. Many of the spare parts and components U.S. companies import from China “are in fact made by other U.S. companies,” said Jonathan Davis, global vice president-industry advocacy at Semi, which represents electronics industry supply-chain interests. Those companies hold on to their own intellectual property and “only perform low-value manufacturing in China, while the high value-added work is completed in the United States,” said Davis. Josh Kallmer, senior vice president-global policy at the Information Technology Industry Council, will testify for excluding several tariff lines on diodes and integrated circuits, he told the USTR. David Isaacs, Semiconductor Industry Association vice president-government affairs, who will testify on the same panel as Kallmer, said that such tariffs on semiconductors would “fail to address problematic Chinese forced tech transfer and IP theft. Chinese companies export almost no semiconductors to the U.S. market. Most U.S. semiconductor imports from China are semiconductors designed and manufactured in the U.S., and then shipped to China for the final stage."
The U.S. subsidiary of a prominent Japanese radio-antenna manufacturer serving the big five U.S. automakers wants the Office of the U.S. Trade Representative to exclude Chinese imports of automotive antenna components from proposed 25 percent Trade Act Section 301 tariffs, it commented, posted Friday in docket USTR-2018-0018. The list of proposed duties released June 15 (see 1806150030) was the second tranche of Trump administration tariffs, on which comments are due Monday and a hearing is Tuesday. This tariff schedule subheading is "a specialized product with limited customers and import volume,” said Robert Shield, Yokowo Manufacturing of America president. Few tech sector commenters had filed in the docket through Friday. Sage Chandler, CTA vice president-international trade, will testify for members. We couldn’t verify Friday whether Yokowo is one.
A “wide range” of Apple products, including the iPhone X, uses a lead-free solder alloy in violation of a January 2001 patent (6,176,947), alleged the patent’s owner, Singapore Asahi Chemical & Solder Industries, in a complaint (in Pacer) filed Wednesday in U.S. District Court in Cleveland. Asahi, a global manufacturer and distributor of solder products and related chemicals, bought the patents in March 2002 from two Cleveland-area inventors, said the complaint. The inventors recognized that “traditional” lead-tin solder alloys faced a “limited future,” so they devised alloys “to meet the increasing level of performance needed in solder joints as required by the continued advancements in integrated circuit and IC package technologies,” said the complaint. It’s those lead-free alloys that are incorporated into Apple products without an Asahi license, it said. Asahi gave Apple written notice of the alleged infringement “at least as early” as July 2017, it said. “Despite such previous written notice, Apple continues to infringe Asahi’s patent rights.” Apple didn’t comment Thursday.
After four straight quarters of “under-forecasting” net subscriber additions, Netflix in Q2 “over-forecasted the business,” said Chief Financial Officer David Wells in the company’s quarterly earnings interview Monday after U.S. markets closed. The company had 5.15 million global net subscriber adds in the quarter, 17 percent below its April forecasts (see 1807160066).
Netflix fell short of its Q2 global net subscriber addition targets in what the company’s shareholder letter Monday called a “strong but not stellar” quarter. Total net additions were 5.15 million for Q2, including 670,000 in the U.S. and 4.47 million internationally. Its Q1 letter had forecast 6.2 million global net additions for Q2, including 1.2 million in the U.S. and 5 million internationally. HBO and Disney “are evolving to focus on internet entertainment services,” and Amazon and Apple “are investing in content as part of larger ecosystem subscriptions,” said Netflix of its key competitors. “Each of these firms has unique content and is striving to find the best creators from around the world to entertain its viewers,” it said. “There has never been a better time to be a creator or consumer of content. We believe that consumer appetite for great content is broad and that there is room for multiple parties to have attractive offerings.” With anticipated additional competition from AT&T/Time Warner and from the combined Fox/Disney or Fox/Comcast, “our strategy is to simply keep improving, as we’ve been doing every year in the past,” said Netflix. In after-hours trading, the stock fell 14 percent to $344.49.