Harnessing tech to secure physical and digital worlds “will be more important than ever” post-pandemic, reported Omdia. “Implementation of social distancing and business closures to limit person-to-person contact have significant implications for how and why companies deploy and use security.” The notion that consumers and enterprises “will conduct a growing amount of their lives and businesses online is nothing new,” said Omdia. “With more people necessarily relying on technology to work, shop, and socialize than ever before, the move to adopt next-generation technologies, services and strategies is accelerating at an unprecedented rate.” Qualcomm Technologies is launching an “accelerator program” to help small businesses convert to a post-pandemic “mobile-first work environment,” it said, also Thursday. The initiative has the backing of Microsoft and Verizon, and Best Buy Business will provide tech support services. Citrix, Lenovo, Linksys, Samsung, Sophos and Targus are listed as the initiative’s “ecosystem partners.”
Five Below e-commerce sales were four times higher in fiscal Q1 ended May 2 than the year-ago quarter, as total sales fell 45%, said CEO Joel Anderson on a quarterly call. It began reopening stores April 21 and now has about 90% of its 920 locations back in business in 36 states, he said Tuesday. The retailer sells kids-targeted headphones and tech accessories, most under $5. It began closing stores days after the World Health Organization declared COVID-19 a global pandemic on March 11. All stores closed for most of the second half of Q1. The stock closed 9.4% higher Wednesday at $113.67.
The International Trade Commission set Sept. 27, 2021, as the “target date” for completing its Tariff Act Section 337 investigation into Sharp’s patent infringement complaint against Vizio and its suppliers, said an order (login required) signed Friday by Administrative Law Judge Dee Lord. The order set a Markman fact-finding hearing for Oct. 1 and an evidentiary hearing for the week of March 1. “It may not be practical to hold the scheduled hearings in-person” because of the COVID-19 pandemic, said Lord. “The parties should be prepared for the likelihood that hearings will be conducted remotely.” An ITC May 20 notice extended the postponement of all in-person Section 337 hearings at least through July 10. Sharp’s April 21 complaint alleged TVs and components from Vizio, its panel maker Xianyang CaiHong Optoelectronics and set maker TPV infringe five Sharp LCD display patents (see 2004270045).
Senior Broadcom executives sidestepped questions on a quarterly investor call Thursday about their disclosures of “product cycle delays” that will hold back a large customer’s flagship smartphone introduction until later in 2020. Broadcom’s wireless components revenue in Q2 ended May 3 declined 14% sequentially from Q1 on “typical seasonality” trends, said CEO Hock Tan. In Q3 ending early August, “we would normally expect to see a double-digit sequential uplift in revenue from the ramp of the next-generation phone at our large North American mobile phone customer,” he said in apparent reference to Apple’s introduction of the iPhone 12, its first 5G smartphone. “However, this year, we do not expect to see this uptick in revenue until our fourth fiscal quarter” ending early November, he said. It expects Q3 wireless income to be down sequentially as in Q2. “Because of product cycle delays, the trough for our fiscal year will be Q3 this coming quarter, and that’s what we reflected in our forecast,” said Tan. “Nothing has changed in terms of designs,” just the “timing” of the introduction, he said. Apple didn’t comment Friday.
Remote work “will be a much bigger part of the working world,” said Slack CEO Stewart Butterfield on a fiscal Q1 investor call Thursday evening. Business leaders are “beginning to realize” the benefits of “offering a more fluid work environment, blending offices and remote work,” he said. COVID-19's “all-at-once shift” to work-from-home mandates “concentrated multiple quarters of Slack adoption into a few weeks,” he said. Revenue grew 50% from the year-earlier quarter, said Chief Financial Officer Allen Shim. “The transition to work-from-home was obviously a major tailwind this quarter and we expect net new customer additions to moderate through the remainder of the year.” There are “potential headwinds for our business,” the CFO said. Slack draws about 25% of its business from companies with fewer than 100 employees, he said. Within that base, “we saw churn trend a bit higher than historical norms in March and April,” he said. The stock closed 14% lower Friday at $32.56.
Store closures and supply chain disruptions sent Fossil Group down 16% for Q1 ended April 4. The pandemic diverted traffic to Fossil’s e-commerce sites where visits soared 150% in April and 200% in May compared with 2019, said CEO Kosta Kartsotis on a Wednesday call. Fossil expects its direct-to-consumer channel will be nearly 60% of its global sales in the second half of its fiscal year. E-commerce was about 10% of sales in Q1 and is expected to exceed 30% this quarter, he said. Connected watch sales declined by high-single digits in Q1, said Chief Financial Officer Jeffrey Boyer. The company expects Q2 sales will decline 60%-70% with “the majority of our global business effectively closed during April and May,” said Boyer. “Ongoing strength” in e-commerce will “partially offset” brick-and-mortar declines, he said. The stock closed up 14% Thursday at $4.36.
With “lots of first-time users” signing up during the pandemic, “as a CEO, I think I should have done a better job” managing the security and privacy issues, said Zoom's Eric Yuan. He wishes in hindsight the company had offered more tech support for novice customers, he said on a fiscal Q1 call Tuesday: “This is a mistake I made. So we learned a hard lesson.” The quarter ended April 30. COVID-19 stay-at-home mandates enabled Zoom to peak at more than 300 million daily meeting participants that month, up from 10 million in December, said Yuan. “We continue to see elevated levels of participants even as governments around the world have begun to ease stay-in-place restrictions.” The stock closed up 7.6% higher Wednesday at $223.87. Yuan acknowledged the “negative PR” that Zoom endured about security and privacy after demand spiked. “With good intentions, we opened our platform to unprecedented numbers of first-time users” who lacked the “established protocols for security and privacy” that were endemic to more seasoned “enterprise customers,” he said. Zoom since has “transparently and quickly addressed specific security and privacy issues,” he said. The company blogged about its improvements, amid some criticism (see 2004070053).
Israeli printed circuit board supplier Eltek sees opportunity to grow its U.S. business “due to the worsening of the relationship between the U.S. and China,” said CEO Eli Yaffe on a fiscal Q1 call Tuesday. “The impact of any trade war between the U.S. and China will also impact the Israeli market.” Any heightened tension would likely accompany increased “U.S. pressure on the Israeli government to reduce the Israel-China trade activity,” he said. The company's Q1 ended March 31. Trump administration officials say punitive tariffs against China are being considered. COVID-19 “created new operational and business challenges” for Eltek, said the CEO. The stock closed 13.5% lower Tuesday at $4.05.
The “consumer-facing pop” for Wi-Fi 6 device introductions will be “relatively short term,” perhaps even in time for the 2020 holiday season, FCC Chairman Ajit Pai told the Wi-Fi Alliance’s virtual membership meeting Tuesday. “This is not a case in which a year-one decision may yield results in a decade.” He cited the agency making 1,200 MHz of bandwidth available (see 2005260025). The new standard is rolling out, said Pai. It will be more than 2.5 times faster than current Wi-Fi and “will offer better performance for connected devices,” he said. Qualcomm launched such products last month (see 2005280046). Wi-Fi 6 is “such a big deal” partly because Wi-Fi “has become such a big deal,” said Pai. It carries more than half the internet’s overall traffic, he said. “Offloading mobile data traffic to Wi-Fi is vital to keeping our cellular networks from being overwhelmed.” COVID-19 "amplified how indispensable Wi-Fi has become,” said Pai.
E-commerce order fulfillment and delivery “worked pretty smoothly during the quarter despite dramatic volume increases,” said Costco Chief Financial Officer Richard Galanti on a fiscal Q3 call Thursday. E-commerce sales soared 64.5% from the year-ago quarter, said Galanti: They rose 90% in the final four weeks of the most recent period, which ended May 10.