Paul Gluckman

Q1 smartphone imports to the U.S. declined 22% sequentially to 44.72 million handsets, up 24% from a year earlier, per Census data accessed Saturday through the International Trade Commission. Chinese smartphone shipments of 36.59 million handsets were down 24% from Q4 but 53% higher than Q1 2020, when China generated 66.4% amid COVID-19's lower factory utilization. China’s Q1 smartphone share was a more customary 82%, down slightly from 84.3% in Q4. Vietnam shipped 6.55 million smartphones to the U.S. in Q1, 8.4% fewer than in Q4, and 26% fewer than in Q1 2020. Vietnam as a haven for low-end smartphones is likely to continue ceding share to China, which owns the market in premium handset production, including 5G-enabled devices.

Cinemark agreed with Disney, Paramount, Sony, Universal and Warner to theatrically showcase films across its nearly 5,900 U.S. screens, said the theater operator Friday: “These agreements secure a consistent supply of content and demonstrate a shared commitment to offering consumers the ultimate movie-viewing experience, with compelling content exhibited within the theatrical environment,” it said. Each deal “has unique attributes specific to the individual studio that mutually benefits both parties.” Cinemark also extended its "test" with Netflix to include Army of the Dead as its first "wide-release film," said CEO Mark Zoradi on a Q1 call Friday. "We’re the only nationwide exhibitor showcasing the film." It debuts May 14 in Cinemark theaters, a week later on Netflix. Cinemark closed up 5.3% at $21.57.

The FTC finding that OEM restrictions on independent third-party repairs have “diluted” consumer protections in the 1975 Magnuson-Moss Warranty Act (MMWA) was a “slam dunk” for right-to-repair advocates, Repair Association Executive Director Gay Gordon-Byrne told us. Commissioners vowed in Thursday's report to use enforcement and rulemaking authorities under the MMWA and 1914 FTC Act to crack down on such anti-consumer practices.

IBM developed the world's first 2-nanometer semiconductor “breakthrough” technology, promising 45% higher performance and 75% lower energy consumption the 7-nm-node solutions, said the company Thursday. Quadrupling smartphone battery life and “drastically” speeding up laptop functionality are among “possible benefits,” said IBM. "We expect that the earliest devices based on this 2-nm technology could enter the market around 2024," said a spokesperson. "This timeline depends on a manufacturer’s road map." The 2-nm node is "a foundational advanced logic technology," which IBM Research built in its semiconductor lab in Albany, New York, she said. "We jointly developed the 2-nm technology with partners in our semiconductor innovation ecosystem. We'll work with our ecosystem partners for manufacturing options." Taiwan Semiconductor Manufacturing Co., for context, is the world’s largest foundry, and is in the second year of volume production of 5-nm-node wafers. It expects to achieve 3-nm-node production at scale in 2022's second half, said top executives last month. TSMC hasn’t publicly discussed a 2-nm-node road map. TSMC representatives couldn't be reached by our deadline.

PayPal believes the “shift” in consumer behavior to e-commerce will stay “essentially unchanged in a post-COVID world,” said CEO Dan Schulman on a Q1 call Wednesday. “Consumers have expanded their digital lives into a seamless online and off-line experience.” Shaping a future “where everyone can participate fully in this new digital paradigm has never been more important,” he said. PayPal transactions in the quarter reached about 4.4 billion, growing 34% year over year, said Schulman. It added 14.5 million net new active accounts, ending the quarter with 392 million, up 21% from Q1 2020, he said. It expects to exceed 400 million active accounts by the end of Q2, he said.

Manufacturer repair restrictions have “diluted the effectiveness” of consumer protections in the 1975 Magnuson-Moss Warranty Act (MMWA), steering consumers into manufacturers’ repair networks “or to replace products before the end of their useful lives,” said the FTC’s long-awaited report to Congress on manufacturers’ efforts to inhibit third-party independent repairs. The “Nixing the Fix” report, in which the agency said it will consider “reinvigorated regulatory and law enforcement options” to address the problem, comes just under two years after the agency convened a workshop under the name (see 1907160058). The report was released Thursday with unanimous support from all four commissioners. See our news bulletin here.

Semiconductor supply constraints prevented Pixelworks in Q1 from “meeting 100% of our demand across all our product lines,” said CEO Todd DeBonis on a Tuesday call. The supplier of video processing chips to smartphone OEMs “made significant progress with the help of our supply chain partners in closing those gaps to meet approximately 90% of our Q2 demand,” he said. “Similar to other semiconductor companies, we expect these constraints to remain a headwind throughout 2021.” The company’s 91% mobile revenue sequential increase was its third straight quarter of 50%-plus sequential growth in the smartphone sector, said DeBonis. “The mobile market is primed for growth in 2021 as the industry and end market demand recovers.” Global 5G adoption “will continue to be an important trend this year, as it enables the efficient delivery of higher quality video and gaming content to mobile devices,” he said. Analysts predict 5G-enabled devices will comprise at least a third of total smartphone unit shipments in 2021, he said. The stock closed 10.6% higher Wednesday at $3.24.

Over-the-top video and e-gaming software downloads sparked another quarter of "very strong" internet traffic growth, said Akamai CEO Tom Leighton on a Q1 call Tuesday. Traffic reached an all-time high of 200 Tbps March 16, 19% higher than the peak in Q1 2020, and two and a half times the traffic peak in Q1 2019, he said. Daily peaks were high in Q1, averaging 143 Tbps, exceeding 110 Tbps “pretty much around the clock,” he said. Akamai is starting to see “some early signs” of recovery in internet traffic from the hotel and travel sector, said Chief Financial Officer Ed McGowan. “It's probably still a few quarters before we start to see that business return to a growth engine for us.” Retail internet traffic remains “a mixed bag,” he said. There are some Akamai retail accounts “that are doing well, some that aren't doing well,” he said. “We’re optimistic, but still a ways to go before we declare a victory there.”

There's room for growth in streaming and with the spectrum switch involving the C-band, said the head of a cable and telecom tech company. About a quarter of Harmonic’s streaming customers are “in the process of fully launching their new streaming services,” said CEO Patrick Harshman on a Q1 call Monday. Video was $70.3 million in revenue, up year over year and “indicating growth is more than just post-pandemic recovery,” he said. Harmonic is “not immune to the global supply chain constraints,” said Harshman. “We're seeing shortages of several key components and related significantly higher costs,” with some of the most significant impacts on its “shelf hardware products,” he said. The stock closed 13% lower Tuesday at $7.05. Others also are seeing chip crunches (see 2105040071). On TV broadcasting, the vendor is “seeing a general rebound" worldwide and “capturing an increasing share,” the CEO said. “We're also seeing 5G bandwidth reclamation.” Harmonic thinks the success the industry is beginning to experience with C-band “is opening the door to a broader opportunity for wholesale IP video distribution via terrestrial fiber rather than satellite networks,” he said. Harshman sees “substantial new opportunities” in C-band “beginning to materialize in the second half of the year, and we also see it as high probability for 2022,” he said. The “next wave of opportunity” will be in the U.S., though it won’t be “overnight,” he said: A “huge amount of video” throughout the world is still “moving around over satellite networks.”

On Semiconductor expects chip "supply and demand to get back in balance when demand stabilizes later this year,” CEO Hassane El-Khoury told a Q1 call Monday. The higher “velocity” of increased demand will begin to “subside” in 2021's second half, “but will remain at a very healthy level,” he said. “We expect supply and demand to get back in balance when demand stabilizes later this year.” He conceded Q1 revenue of $1.48 billion “could have been higher if we didn’t have constraints in a perfect world.” That's a 16% year-over-year rise.