Intel shares closed 2.4 percent lower Thursday at $52.19 after the announcement that Brian Krzanich resigned as CEO because of a “past consensual relationship” with an unnamed Intel employee that violated the company’s “non-fraternization policy.” Chief Financial Officer Robert Swan will be interim CEO until a permanent chief is hired either from inside or outside Intel, said the company. Krzanich hosted his fifth annual shareholder meeting as CEO May 17, giving himself high grades on his self-described five-year “report card.” Intel drew two-thirds of its revenue from PCs when he became CEO in 2013, but Krzanich successfully supervised the company’s transformation to a “data-centric” model, he told shareholders. Under his watch, Intel turned from a “flat revenue profile” at the beginning of his term into a company with a 4.5 percent compound annual growth rate in sales, he said. A November SEC filing shows Krzanich bought and sold 644,000 shares of Intel stock by exercising his options and sold an additional 246,000 shares that he already owned. At the meeting, a shareholder asked Krzanich whether his “recent stock sell” reflected his confidence in Intel's future. “I can say absolutely the sale is not a reflection at all of my confidence in the company,” he responded. “My view of the company is stronger today than it ever has been in my 35 years here.” Krzanich used the CES keynote stage to announce a “diversity initiative” that would make the Intel workforce mirror the demographic makeup of the U.S. population, tweeted CTA President Gary Shapiro Thursday. “Intel is almost there. He is a visionary and great leader despite his reason for leaving.” Krzanich's departure raises the possibility that Intel could celebrate its 50th birthday July 18 without a permanent CEO. "I want to give you a quick kind of sneak that I encourage you to look to the skies above our headquarters here in Santa Clara," so that shareholders can "celebrate with us as our anniversary approaches that week," he told the annual meeting.
A product hazard “enabled by connectivity is not simply a product hazard” but also a “cybersecurity risk,” said CTA in comments, posted Wednesday in docket CPSC-2018-0007 on the Consumer Product Safety Commission's review of potential safety issues and hazards associated with IoT devices (see 1803290032). Internet-connected consumer devices can give hackers “a connected entry point through a vulnerable device to a potentially vulnerable network,” said CTA. “CPSC can play a unique and valuable role with respect to the IoT, but it should not aim to do so alone,” said the group. “The agency should seek to bring its expertise regarding product safety to broader public, private, and joint public-private efforts directed at improving IoT safety and security.” It urged a “focus on product safety, rather than broader cybersecurity risks.” The Retail Industry Leaders Association agrees the commission “must take care not to conflate issues that clearly fall within the agency’s statutory authority and those that do not,” it commented. “Threat of hackers stealing personal data is real, alarming and could cause major damage to consumers,” said RILA, which represents Best Buy, Walmart and other big-box retailers. But the CPSC “has no statutory jurisdiction over privacy data and security,” it said. “That responsibility belongs to the FTC.”
Stakeholders blasted President Donald Trump's threats to impose new Trade Act Section 301 tariffs of 10 percent on an additional $200 billion worth of goods from China. CompTIA has “no doubt that China needs to be held accountable” for unfair trade practices, said Elizabeth Hyman, executive vice president-public advocacy. “But additional tariffs are cutting off our nose to spite our face,” she said Tuesday. “Rather than using the blunt instrument of tariffs on China, more energy should be devoted to working with the U.S. Congress to develop productive solutions." China's retaliatory decision to impose 25 percent tariffs on $34 billion in U.S. imports, mirroring the administration’s Section 301 tariffs announced Friday (see 1806150030), shows China "has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," said Trump Monday. Trump directed U.S. Trade Representative Robert Lighthizer to “identify” $200 billion worth of Chinese goods for additional 10 percent tariffs.
Amazon Technologies landed a U.S. patent Tuesday that uses drones for more efficient movement of inventory in warehouses. Patent 10,000,284 describes a “collaborative unmanned aerial vehicle for an inventory system.” Modern inventory systems “face significant challenges in responding to requests for inventory items,” and those challenges become “non-trivial” when stock needs to be split between ground floors and upper “mezzanine levels within a large structure,” it said. An inventory system can quickly “dispatch autonomous ground drive units on both the first floor and on the mezzanine to collect the items,” it said. “At the mezzanine, the items can be collected at a staging point and consolidated into a container for transport.” The staging point may double as a “docking station” for a drone, it said. Amazon didn’t comment on commercial implications.
The Consumer Product Safety Commission was right to exclude cybersecurity and privacy concerns when it undertook its review of the potential safety issues and hazards for IoT consumer devices (see 1803290032 and 1806150044), said the Association of Home Appliance Manufacturers (AHAM) and U.S. Chamber of Commerce in comments posted Friday in docket CPSC-2018-0007. Internet and privacy groups and think tanks disagreed, arguing security and privacy concerns aren’t part of CPSC’s historical purview but can’t be divorced from the physical harms that IoT devices risk inflicting on consumers.
TVs were the big winner Friday when the Office of the U.S. Trade Representative eliminated them from its final list of Chinese imports earmarked for Trade Act Section 301 tariffs of 25 percent. Other sectors didn’t fare so well, including those that import Chinese printer parts, thermostats and computer equipment used in artificial intelligence and blockchain technology. China vowed to retaliate "immediately."
In Tyson Tuttle’s six years as Silicon Labs CEO, “I think we’ve done seven acquisitions, all around IoT,” he told a Stifel investment conference Wednesday. The Z-Wave buy from Sigma Designs that Silicon Labs completed in April for $240 million in cash (see 1804180064) “was the largest one that we’ve done,” said Tuttle. Like the six previous acquisitions under his watch, Silicon Labs pursued Z-Wave with the purpose of “building up this core platform around IoT,” he said. “That’s been, I think, a very successful set of acquisitions, and we’re starting to see the results of that in the growth of the IoT business.” After the Z-Wave buy, “we have about $525 million in the bank” and about $300 million in available credit, “and so we have the ability to continue to be active on the M&A front,” said Tuttle. In any new acquisition targets, “we’ll continue to focus on the IoT area, and if there’s something that makes sense there, we certainly have the ability to go for it,” he said. “But it has to be culturally aligned, strategically aligned, and it needs to be accretive to the bottom line at the same time.”
Exploiting the unique “form factor” with flexible OLEDs in smartphones or tablets, such as with devices with foldable screens, would be the “most important” way to boost the current low factory “utilization” and poor production yields for those displays, said Display Supply Chain Consultants CEO Ross Young on a Tuesday webinar. “The flexible nature of these products adds some functionality, or a cool factor,” to justify their premium positioning, said Young. Price is the “biggest impediment” to the adoption of flexible OLED displays, he said. Flexible OLEDs cost four times as much as LCD displays fashioned from low-temperature polycrystalline silicon, said Young. “It’s very risky for smartphone brands to adopt these high-priced components.” “Foldable” smartphones or tablets would be the ultimate differentiator, he said. “If you could fold your tablet, and have it serve as your phone, you could see display sizes growing to seven inches or eight inches, or even nine inches.” Despite the “many challenges,” he said that “it appears that production is going to start in small quantities by the end of this year."
House Republicans went to bat for constituent tech companies trying to fend off Trade Act Section 301 tariffs of 25 percent on imports from China over intellectual property disputes. Seven GOP members from Texas want U.S. Trade Representative Robert Lighthizer to heed “requests” of Dell and Hewlett Packard Enterprise to remove Chinese imports of hard disk drives and solid state drives, said a May 18 letter posted Friday in docket USTR-2018-0005. Ted Poe, Pete Sessions, Mac Thornberry, John Carter, Roger Williams, Lamar Smith and Bill Flores said the devices are “critical components, and major cost drivers” for the “cutting edge” servers and storage products Dell and HPE make in the U.S. Cree in the past decade invested $2.3 billion in R&D and capital expenditures in Durham, said Rep. George Holding, R-N.C., so tariffs on its LED imports from China would help non-U.S. rivals. The White House announced May 29 the USTR’s office will release its final tariffs list by Friday (see 1805290046).
Apple knowingly marketed three generations of defective Apple Watches since 2015 without owning up to the flaw that causes the watch’s screen to “crack, shatter, or detach” from the body of the device, “through no fault of the wearer,” alleged a complaint (in Pacer) filed Monday in U.S. District Court in San Jose. Apple “actively concealed and failed to disclose” the defect to consumers, and “indicates that its internal policy is to deny the existence” of the flaw or claim it’s the result of “accidental damage” from the user, thereby refusing to “honor” any warranty on the product, said the complaint seeking class-action status. Without warranty coverage, consumers “are forced to incur the significant expense of repairing or replacing” their defective watches, it said. Plaintiff Kenneth Sciacca bought his second-generation Apple Watch in December 2016 from an Apple store in Colorado Springs, Colorado, said the complaint. About 15 months later, Sciacca noticed that its screen had become detached from its body when he removed it from its charger, it said. When Sciacca brought the watch to an Apple store in Lone Tree, store employees quoted him $249 to fix it because it wasn’t under warranty, an offer that Sciacca declined, it said. His experience was “identical” to that of “thousands” of other Apple Watch owners who voiced their grievances on Apple’s “Communities” forum, it said. “Apple’s response in each case is the same: it implicitly or expressly blames the consumer.” The company didn’t comment Tuesday.