Paul Gluckman

“Organic supply” at Analog Devices was affected from some of the COVID-19 factory shutdowns in Southeast Asia “that affected much of the industry,” said CEO Vincent Roche on a call Tuesday with analysts for fiscal Q4 ended Oct. 30. Revenue in the quarter still grew 33% sequentially from fiscal Q3 ended July 31, he said. “But as we've been talking about it for the last couple of quarters, our supply has been limited and revenue really is a function of supply. So that hiccup did put a little bit of pressure on the revenue line, and you'll see that correct itself as we go forward.” The company’s fiscal 2021 “truly demonstrated the vital importance of semiconductors to the modern digital age,” said Roche. “As we enter 2022, our backlog and bookings remain robust and we continue to invest in manufacturing capacity.” The chipmaker took “decisive action to add capacity throughout the year with more than $340 million in capital expenditures,” said the CEO. “This is enabling us to better navigate the near-term supply/demand imbalance while achieving our long-term growth objectives.” In the company’s communications sector, fiscal 2021 “was an uneven year, as strength in wired was offset by weakness in the China wireless market,” said Roche. “Encouragingly, as we look to 2022, the proliferation of 5G is gaining momentum globally, especially in North America.” The company this past year introduced the industry's first software-defined radio transceiver “that includes a fully integrated digital front end,” he said. “This next generation transceiver platform enables us to defend and extend our position in traditional 5G” and emerging open radio access networks, he said.

Zoom exited Q3 with 512,100 customer accounts with 10-plus employees each, up 18% year over year, said Chief Financial Officer Kelly Steckelberg on an analysts’ call Monday. Customers with more than 10 employees generated 66% of Q3 revenue, up sequentially from 64% and 62% in Q3 last year, she said. These trends suggest that customers with more than 10 employees are expanding their use of the platform, adding more products and seats, she said. The company’s “net dollar expansion rate” for customers with more than 10 employees exceeded 130% for the 14th straight quarter, as existing customers “increased their spend with Zoom,” she said. “For Q4, we expect this metric to be modestly below the 130% mark.” Zoom’s online churn in Q3 “performed better than our expectations coming in at the beginning of the quarter,” said the CFO. “We were happy to see that it was more seasonality aligned rather than true potential departures, as people were making other choices or going back to meeting in person.” Q3 revenue of $1.05 billion was up 35% year over year. Quarter-on-quarter revenue growth is expected to be flat in Q4. "Our online business will be a headwind in the coming quarters as smaller customers and consumers adapt to the evolving environment," said Steckelberg. The stock closed down 15% Tuesday at $206.64.

Amazon doesn’t actually own the digital content it sells the public, but sublicenses from the content owner, and when a licensing agreement terminates, Amazon pulls the content from a consumer’s purchased folder and music library “without prior warning, and without providing any type of refund or remuneration,” alleged a class-action complaint filed Friday in U.S. District Court in the Southern District of New York. Amazon’s sale of digital content it doesn't own “is made more egregious” because Amazon “charges just as much for that content,” sometimes even more, than stores like Best Buy and Target that “actually transfer title” to its customers, access to which “can never be revoked,” said the complaint. Amazon continues to “mislead consumers into believing it's selling them digital content, “even though it is merely providing them with a license to view it, which can be terminated at any time, for any reason and without any type of warning so that a consumer can take steps to attempt to preserve it,” said the suit. Amazon has sold more digital content, “and at substantially higher prices per unit, than it would have in the absence of this misconduct, resulting in additional profits at the expense of deceived consumers,” it said. The complaint seeks “punitive or exemplary” money damages, alleging unjust enrichment and violation of consumer protection laws. Amazon didn’t comment.

Cisco revenue growth in its fiscal Q1 ended Oct. 30 of 8% year over year to $12.9 billion was “solid” but was hindered by supply constraints, CEO Chuck Robbins told analysts. “Our product orders were extremely strong and balanced across our markets, but we are constrained in what we can build and ship.” The company takes “multiple steps to mitigate the supply shortages and deliver products,” including paying “significantly higher logistics costs,” said Robbins Wednesday. It “thoughtfully raised prices” to offset the impact of higher costs from suppliers that are crimping its gross margins. “Most customers are very understanding. They are super-frustrated with the lead times.” Many Cisco customers “are doing the same thing to their customers, so this is a whole inflationary trend that we see across the entire economy,” said the CEO. When its order backlog might clear is “the $64,000 question,” said Chief Financial Officer Scott Herren. “It's not just one commodity that's constrained,” he said. “Then you have to overlay on that the snarled logistics position that we find ourselves in, really across all lanes, whether it’s ocean or air or trucking.” The company expects revenue growth of 4.5% to 6.5% for this quarter, said the CFO: “The Q2 guide is impacted by the supply chain -- the component supply issues that are putting a headwind on what we can get pushed out the door.” Thursday, the stock closed down 5.5% at $53.63.

CTA “welcomes manufacturer efforts” to promote self-service repair of “complex, highly integrated, and world-changing consumer technology products,” emailed Walter Alcorn, vice president-energy and sustainability policy, of Apple’s decision to make its parts, tools and manuals available for consumers who are comfortable servicing their own devices (see 2111170034). “As manufacturers assume more responsibility for product safety and security long after their devices are sold to consumers, it’s important to find the balance between safety and empowering consumers to repair their devices," said Alcorn Wednesday.

In a breakthrough for right-to-repair advocates, Apple said Wednesday its new Self Service Repair program will make genuine Apple parts, tools and manuals available for consumers who are “comfortable” servicing their own devices. Advocates greeted the news with a mixture of glee and trepidation over what they said was a program that at first appearance was rife with limitations and unknowns.

Samba TV is “transforming” smart TVs “into a platform for our customers,” including brands, agencies, content programmers, publishers and measurement and advertising vendors, “to build attentive, engaged audiences,” said the company in an S-1 registration statement Tuesday at the SEC for an initial public offering of common stock. Samba’s AI-driven “content identification software” is embedded in smart TVs sold by “leading OEM brands across the globe,” it said. “Through our software, we form direct relationships with millions of viewers, who provide us consent to collect their viewership data. Using the data we collect, as well as data we license, we provide customers with critical tools to optimize how they plan, buy and measure their advertising campaigns to reach their preferred audiences.” Traditional TV audiences "watched a limited selection of content available on a broadcaster’s linear programming schedule, which included advertisements seen by all viewers regardless of their interests," said the filing. "With the development of on-demand services, today’s viewers enjoy more video choices than ever as content consumption rapidly spreads across a growing set" of broadcast, over-the-top and streaming "platforms, formats and devices," it said. Samba generated revenue of $82.8 million in the nine months ended Sept. 30, up nearly 24% from the same 2020 period, said the S-1. August Capital Management is Samba’s largest institutional investor with 6.51 million shares, said the filing. Co-founder and CEO Ashwin Navin is its largest individual shareholder with 4.17 million shares. Samba has applied to list its common stock on the New York Stock Exchange under the ticker symbol “SMBA.”

Amazon supports U.S. policy initiatives “that focus on diversifying and expanding the semiconductor manufacturing and advanced packaging supply chain through building out domestic resources,” it said in comments posted Tuesday in docket BIS-2021-0036. Comments were due Monday in the Bureau of Industry and Security’s request for information on the global chip crunch to help the secretaries of Commerce and Homeland Security prepare a report for the White House by the one-year anniversary of President Joe Biden’s Feb. 24 executive order on U.S. supply chains (see 2109230038). Any new policy initiatives on the chip shortage should also focus on “preserving relationships with trusted partners outside the United States, and investing in the growth of leading-edge technology capabilities,” said Amazon. “We are particularly concerned about the current lack of U.S.-based manufacturing capacity or capability to produce leading edge semiconductors at or below 7 nanometers, which creates a significant gap" in the U.S. semiconductor supply chain, said the company. The “geographical diversification” of supply chains and “uninterrupted access” to semiconductor technology is “vital” to American companies, “including Amazon and our customers,” it said.

Signs are strong that releasing feature films through “an exclusive theatrical window remains the best approach to maximize profitability for content producers,” said National CineMedia CEO Tom Lesinski on a Q3 investor call Monday. NCM bills itself as the largest cinema advertising network in the U.S. Amid the “significant” revenue lost to streaming piracy, “it has become increasingly clear that studios are leaving money on the table with their day-to-day streaming strategies,” said the former Warner Home Entertainment executive. “These realities may underlie recent announcements by all major studios that they will maintain or reconsider an exclusive cinema release window for most, if not all, their films in 2022.” Lesinski also sees signs that “some of the new non-studio streaming services will start to consider theatric release for some of their productions,” he said. “With audiences returning to the cinema, the strong 2022 film slate and continued TV ratings challenges, we are very well-positioned to make NCM a larger part of the marketing plans of national brands and local and regional businesses.”

Amazon is teaming with Weber to crack down on the “unlawful and expressly prohibited sale” of fake grill covers that “illegally bear” the Weber trademark, said a complaint Tuesday (in Pacer, 2:21-cv-01512) in U.S. District Court in Seattle. Amazon spent more than $700 million and hired more than 10,000 employees last year alone “to protect its store from fraud and abuse,” stopping more than 6 million “suspected bad-actor selling accounts before they published a single listing for sale,” and blocking more than 10 billion “suspected bad listings before they were published,” it said. At least 11 of the accused third-party sellers are based in China, said the complaint. Another “falsely represented its location as Pompano Beach, Florida, and has deliberately registered additional false information with Amazon as part of a scheme to mislead” the company, it said. Amazon supports “expanded government authority” for federal agencies to share “pre-seizure enforcement information with the private sector” to help reverse the explosive growth in e-commerce trafficking of counterfeit goods, the company’s public policy point person told a Center for Data Innovation webinar last month (see 2110140054). A National Defense Authorization Act amendment introduced Thursday in the Senate would require online marketplaces like Amazon to verify third-party sellers in an effort to combat the sale of fake and stolen goods (see 2111040070).