Though Broadcom formally ended its bid to buy Qualcomm Wednesday and complied with President Donald Trump’s order to withdraw its slate of nominees for election to the Qualcomm board (see 1803140057), Broadcom’s “understanding” is that Qualcomm’s own nominees running for the board at the company's March 23 annual meeting "are only garnering between 15 to 16 percent" of the total Qualcomm shares outstanding in a proxy vote “tally” through Thursday, said Broadcom Chief Financial Officer Tom Krause on a Thursday earnings call. That’s “not necessarily something to celebrate down in San Diego,” said Krause in an obvious jab at Qualcomm’s management, which fought for months to beat down Broadcom's hostile takeover bid. Qualcomm representatives didn’t comment. Broadcom doesn’t see “this week’s events putting any constraints on our ability to pursue acquisitions more broadly,” said Krause. He and CEO Hock Tan “are quite familiar with the industry landscape, and sitting here today, we do see potential targets that are consistent with our proven business model,” he said. Qualcomm was “clearly a unique and very large acquisition opportunity,” he said. “Given the maturity of the industry” and the “consolidation it has seen,” any future Broadcom acquisitions “are much more likely to be funded with cash available on our balance sheet,” rather than financed through banks, he said. Broadcom executives refused to take questions on the call about the failed Qualcomm bid.
HEVC Advance, the H.265 patent pool now in its third year, decided to stop imposing royalties on content distribution services after hearing “anecdotal evidence” the fees may have been impeding industry adoption of the compression technology, CEO Pete Moller told us. HEVC Advance’s secondary hope is that the decision, announced Tuesday, will encourage other H.265 licensors to stop collecting content royalties or declare their intentions not to pursue them, and thereby “energize the market” for all, said Moller.
Apple landed a U.S. patent Tuesday that describes techniques for generating maps of indoor venues, including those of individual floors, to supplement GPS functionality commonly found on smartphones. Though a smartphone can use GPS to determine location, including latitude and longitude, and display that on a “virtual map” on the screen, “maps of indoor space may not be easily available,” said the patent (9,913,100), which names seven Apple inventors and is based on an application filed in September 2014. “Even when the maps are available, the maps may not be up to date due to frequent changes to the indoor space,” such as when a store moves into or out of a mall, said the patent. “Even when the maps are up to date, indoor navigation may be difficult or unavailable due to lack of accurate GPS signals in the indoor space as well as lack of integration between maps of outdoor space and maps of indoor space.” The solution the patent describes is to enlist the help of a “venue data service,” asking owners of individual properties to “upload” information to that service, including the “geometries” of floors. The service also would periodically “survey” property owners to “validate the venue data” and certify that the information is up to date, it said. The service also could generate “fingerprint data” about the venue that “can include expected measurements of the environment variable at various locations of the building,” it said. A smartphone can then use the fingerprint data to determine where within the venue the mobile device and its owner are located “using sensor readings of the environment variable,” it said. Apple representatives didn’t comment Wednesday.
Contractor WinMagic owes Samsung SDS America (SDSA) $277,100 in refunds for botching the installation of encryption software for itself and an unnamed client, alleged the U.S. subsidiary of Samsung’s global information technology company in a federal complaint Thursday. SDSA signed an April 2016 contract to license WinMagic’s SecureDoc Enterprise encryption software for its own use and for “its client’s business operations,” said the complaint (in Pacer), filed in U.S. District Court in Newark, New Jersey. The complaint didn’t identify the client, but a copy of the attached contract suggested it was a large customer, because it said SDSA ordered 7,000 copies of the SecureDoc software. SDSA’s representatives “specifically and unequivocally advised WinMagic that the SecureDoc solution must be compatible with the encryption configuration that SDSA and its client were required to utilize on the computers used in their business operations based upon the requirements of their respective parent companies,” said the complaint. WinMagic nevertheless failed to properly “configure the SecureDoc solution to be compatible with the very encryption requirements that SDSA previously identified as a mandatory component” of the contract, it said. Almost immediately after WinMagic technicians began installing SecureDoc in September 2016, SDSA “provided WinMagic with written notice of serious issues” with the encryption software that “were so severe that SDSA was wholly unable to use the technology solution for any purpose,” it said. Three months later, SDSA canceled the contract and demanded its refund, “consistent with the express warranty provision contained” in the agreement, it said. “To date, WinMagic has failed and refused to provide a full refund of the $277,100 that SDSA paid to WinMagic for SecureDoc,” said the complaint, which alleged fraudulent concealment, negligent misrepresentation, unjust enrichment and other accusations. WinMagic representatives didn’t comment Friday.
The video market for content equipment supplier Harmonic is “opportunity-rich, but still very much in transition, as our customers evolve from traditional broadcast and pay-TV models to new over-the-top models,” said CEO Patrick Harshman on a Wednesday earnings call. The migration from “traditional” pay TV to what Harmonic calls “Over-the-Top 2.0" is very much “poised to trigger a global wave of investment in new unified video platforms that enable delivery of premium live over-the-top services and targeted advertisements with broadcast-like quality and reliability” to large-screen TVs as well as mobile devices, said Harshman. Ultra HD will be a key “additive to these next generation over-the-top services,” he said. “We're pleased to be finally seeing a still early, but clear pickup in customer demand” for such services, he said. The “ongoing wave” of mergers and acquisitions in media and telecom “is inextricably linked to enabling and exploiting this next generation of streaming video services and associated personal advertising,” he said. “The endgame is unquestionably greater investment in next-generation over-the-top streaming platforms, underscoring the opportunity for Harmonic to leverage our strong technology platform and global brand to play a key enabling role in this global re-invention of the pay video business model.” Harmonic shares closed 15.7 percent higher Thursday at $3.50.
Best Buy is sticking with smartphones even as it closes the remaining 257 stand-alone Best Buy Mobile stores by May 31, CEO Hubert Joly told a Thursday earnings call. The retailer began opening those stores “more than a decade ago before the iPhone was even launched,” said Joly. “The mobile phone business was in a period of rapid growth and margins were high. Fast forward to 2018 and the mobile phone business has matured.” The company remains “committed” to the category, said Joly: “It makes more sense for us to grow this category in our big-box stores and online.” Hundreds of the big-box stores “now include dedicated vendor experiences associated with carriers and manufacturers like Apple, AT&T, Samsung, Sprint and Verizon and we're adding more of these this year,” he said. Same-store sales rose 9 percent in Q4 ended Feb. 3. The stock closed 4 percent higher Monday at $75.30.
The PyeongChang Olympics "were a great success" for Korean broadcasters that showcased ATSC 3.0 for Ultra HD video reception with high dynamic range, said Sinclair CEO Chris Ripley on a Wednesday earnings call. The “first iteration” of 3.0 for Korean broadcasters “has just been focused on better resolution, better pictures, which we don’t think is the ultimate best use of that technology, and I think they’ll agree,” said Ripley. He also said Sinclair feels "we're getting close" to landing DOJ and FCC approval of the proposed Tribune buy, but opponents of the deal disagree (see 1802280047).
CTA broke its silence Tuesday on Energy Star V8.0 for TV that EPA released Friday (see 1802230046), calling it “another milestone and testament to the importance of voluntary programs." TVs “have become an energy efficiency success story thanks to innovation" and "flexible, market-driven programs,” said Doug Johnson, vice president-technology policy. Developing the spec “presented some challenges,” he said. As “longtime champions” of Energy Star, CTA and members urged EPA “to revise its proposed requirements impacting consumers' overall TV-viewing experience,” he said. “While some problematic issues were resolved, others, such as brightness requirements, remain.” EPA "analyzed" but rejected a recent proposal to lower a TV's minimum required brightness with the energy-saving automatic brightness control feature enabled and when the TV is viewed in rooms with nearly total darkness, said the agency. Had EPA "accepted" the proposal, it would have meant “up to a 30 percent reduction in the average brightness” of 75 percent of the TV models in the “dataset,” said the agency. EPA sees the minimum-brightness rule as critical for discouraging consumers from disabling ABC because the screen is too dark in ambient room light of 3 lux. CTA's reaction to the final spec was much more subdued than that of the "revised final draft" that EPA released late October. EPA's proposal to mandate ABC in all preset picture modes would put the agency "in the business of control, deciding how consumers receive and use technology," CTA said then. EPA adopted those proposals in the final spec.
Roku executives are optimistic about smart TV usage increases but investors were less pleased with forecasts, sending the stock closing down 17.7 percent at $42.05 Thursday. Wednesday after regular U.S. markets closed, the company forecast Q1 sales of $120 million to $130 million, reportedly less than some analysts expected. Nonetheless, with one in five smart TVs sold in the U.S. last year having Roku operating systems built in, the company is “increasingly tapping into” the $70 billion pool that U.S advertisers spend on TV “as the TV ad ecosystem moves to streaming,” said CEO Anthony Wood on a Wednesday earnings call. The “large secular shift” to streaming from “traditional linear TV” is “causing a lot of positive trends for us,” said Wood. The streaming TV provider is using automatic content recognition to measure audiences, said Scott Rosenberg, senior vice president-advertising. "It gives us visibility into what's happening on the linear side of viewership."
At Dish Network, “we obviously have concerns” about Disney’s proposed $66.1 billion buy of much of 21st Century Fox (see 1712140003), said Chairman Charlie Ergen, much as he previously expressed worries about AT&T/Time Warner (see 1711090004). Ergen, on a Wednesday earnings call, implied strongly that he thinks DOJ should challenge Disney/Fox in the courts, as it’s doing with AT&T/TW.