|Bid||47,000.00 x 0|
|Ask||47,050.00 x 0|
|Day's Range||46,400.00 - 47,100.00|
|52 Week Range||36,850.00 - 47,600.00|
|Beta (3Y Monthly)||1.13|
|PE Ratio (TTM)||N/A|
|Earnings Date||Oct 29, 2019 - Nov 5, 2019|
|Forward Dividend & Yield||1,416.00 (3.00%)|
|1y Target Est||54,903.00|
(Bloomberg Opinion) -- What’s worse than billionaires who bribe government officials? The “Gangnam Left,” stock pickers may say.The term, and subject of a book by Chonbuk National University professor Kang Junman, is a dig at South Korea’s wealthy elite who advocate socialist policies, such as boosting the minimum wage and spending billions to create public-sector jobs. Some of these technocrats have found themselves in hot water recently: President Moon Jae-in’s recently appointed justice minister is now facing corruption allegations. Moon came to power after a bribery scandal involving some of the countries biggest family-run conglomerates, or chaebol, led to the impeachment of his predecessor, Park Geun-hye. To his credit, Moon, South Korea’s most left-wing president in a decade, has made some progress toward his campaign promise of chaebol reform. Companies including Samsung Electronics Co. and Hyundai Motor Co. have restructured, while the Kospi Index’s payout ratio – the share of profit firms return to their investors – has hit the highest level in at least two decades. Yet the notorious Korea discount, which stems from investors’ wariness about chaebol, hasn’t narrowed. Rather, the Kospi’s valuation has sunk to a decade low, as measured by its price-to-book ratio. So much money has been lost that Seoul last month talked up re-instituting a ban on short selling, which was lifted in 2013. You could be tempted to blame the U.S.-China trade war. South Korea’s economy is built on exports, often in highly cyclical industries such as semiconductors. Yet shares of manufacturers like Samsung, for instance, haven’t suffered much this year. What’s troubling traders now is Moon himself. While he remains largely popular with the public, the corporate community is deeply skeptical of his policies. A case in point: The private sector’s capital-investment growth, a measure of the country’s business outlook, has been declining since Moon took office in 2017, well before the trade war began in 2018.As I’ve written, a double-digit hike in the minimum wage over the past two years has burdened smaller businesses with more expensive staff. Meanwhile, draconian measures to cool the real-estate market, such as imposing a pre-sale price cap in Seoul, have caused new housing starts to tumble in tandem with construction stocks. To make matters worse, there’s a growing feeling that Moon has mishandled South Korea’s spat with Japan and is in danger of alienating the U.S. Seoul’s decision to end an intelligence-sharing agreement last month irked Washington. President Donald Trump, meanwhile, has said the country should pay “substantially more” for American protection against North Korea. In recent decades, post-World War II political allegiances have evolved into economic dependencies; to prosper, an export-oriented emerging market needs to stay close to the U.S. South Korea is now wading in uncharted waters.The country also will have a tough time staying neutral as the fight for technological supremacy between Beijing and Washington intensifies. China is by far the largest recipient of South Korea’s exports, which account for 44% of its GDP. Unfortunately, the U.S.’s move to block chip sales to the mainland only backfires on an American ally: Semiconductors account for roughly a third of South Korea’s shipments to China. Ironically, South Korea could have served as a haven in a global sell-off, with its 10 biggest chaebol accounting for more than half of the Kospi’s market capitalization. Billionaire heirs certainly won’t be quick to rush out the door – and could even prop up their conglomerates’ stock prices with share repurchases. By adding another layer of political uncertainty, however, the Moon administration is only increasing South Korea’s market-risk premium, steepening the Korea discount that the president has been trying to close. By definition, stock markets celebrate capitalism and entrepreneurship. Chaebol, with their murky political ties and complex cross-holdings, have been no allure to investors. Adding a socialist government only saps animal spirits further. To contact the author of this story: Shuli Ren at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Broadcom Inc. reported modest quarterly sales growth and reiterated a muted forecast for the rest of the fiscal year, indicating the trade war between China and the U.S. is still suppressing demand for semiconductors.Sales in the period ended Aug. 4 rose 9% to $5.52 billion, the San Jose, California-based company said Thursday in a statement. Before certain items, profit was $5.16 a share. That compares with average analyst estimates for per-share profit of $5.13 on sales of $5.52 billion, according to data compiled by Bloomberg.Broadcom said it still expects revenue in fiscal 2019 to be $22.5 billion, a lowered projection it made in June. The company no longer gives quarterly predictions and instead updates its annual target at the end of each quarter. Shares declined about 1.3% in extended trading.Chief Executive Officer Hock Tan has built a $100 billion company through a spate of acquisitions, including his purchase of part of Symantec Corp. for $10.7 billion in August. While Broadcom has one of the broadest reaches in the technology industry, that diversity hasn’t made it immune to the ongoing trade dispute between the U.S. and China and blacklisting of Huawei Technologies Co., which is hammering Tan’s semiconductor business.“We believe demand has bottomed out but will continue to remain at these levels due to the current uncertain environment,” Tan said in the statement. There’s little visibility due to the trade war and no sense of a “sharp recovery around the corner,” he added on a conference call.About half of the chips Broadcom sells are either used in China or sent through factories there on the way to becoming part of electronic devices sold around the world. Last year, Huawei accounted for about $900 million of Broadcom’s sales, Tan has said.The chipmaker’s position as a major manufacturer of components for Apple Inc. and Samsung Electronics Co. means its orders are seen as a gauge of confidence in future demand from some of the world’s largest smartphone makers. It’s also one of the leading suppliers of networking components used by large data-center operators such as Alphabet Inc.’s Google and Amazon.com Inc.’s cloud division.Tan said that there is a “seasonal uptick” in demand for phone parts because of the launch of new models from his “large North American customer,” using his typical reference for Apple. Orders at this point are typical of the buildup ahead of a phone release, and sales of the devices will determine demand in the future. Apple’s iPhone 11 goes on sale Sept. 20.Three months ago, Tan pared back his revenue forecast for the year, indicating that sales in each of the remaining quarters would be a billion dollars lighter than previously expected. That has held back Broadcom’s stock, which is up 18% this year, compared with a 39% advance by the Philadelphia Stock Exchange Semiconductor Index.In the current circumstances, the company will prioritize paying down debt over buying back shares, Chief Financial Officer Tom Krause said on the conference call. Doing so is important to retaining the company’s investment-grade credit rating.Net income in the fiscal third quarter declined to $715 million, or $1.71 a share, from $1.2 billion, or $2.71, a year earlier, Broadcom said. Chip unit sales were about $4.4 billion in the recent period, accounting for 79% of the company’s total revenue. They were down 4.7% from a year earlier.(Updates with comments from executives starting in fifth paragraph)To contact the reporter on this story: Ian King in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.In Shenzhen’s glitzy financial district, a five-year-old outfit creates a 360-degree sports camera that goes on to win awards and draw comparisons to GoPro Inc. Elsewhere in the Pearl River Delta, a niche design house is competing with the world’s best headphone makers. And in the capital Beijing, a little-known startup becomes one of the biggest purveyors of smartwatches on the planet.Insta360, SIVGA and Huami join drone maker DJI Technology Co. among a wave of startups that are dismantling the decades-old image of China as a clone factory — and adding to Washington’s concerns about its fast-ascending international rival. Within the world’s No. 2 economy, Trump’s campaign to contain China’s rise is in fact spurring its burgeoning tech sector to accelerate design and invention.The threat they pose is one of unmatchable geography: by bringing design expertise and innovation to the place where devices are manufactured, these companies are able to develop products faster and more cheaply.“Ninety percent of the world’s headphones are produced in China, 90% of China’s headphones are produced in Guangdong, and 90% of Guangdong’s headphones are made in Dongguan,” explains SIVGA co-founder and product chief Zhou Jian, an 18-year audio industry veteran who has done work for global brands like Sennheiser Electronic GmbH & Co., Sony and Bose. His company is based in Dongguan because, he says, “Dongguan’s industrial chain is near perfect.” Zhou estimates there are hundreds of specialist factories in the area focusing on a particular component, such as screws, and his network of contacts among those suppliers has been invaluable. It was “support from these good friends” that got SIVGA, short for Sound Impression Via Genuine Artwork, off the ground.Now employing more than 30 people and offering a premium brand called Sendy Audio, SIVGA sells a luxury pair of $599 headphones called Aiva. Featuring handcrafted wooden ear cups and intricately detailed metal grilles, the Aiva have shipped more than 2,000 units into a niche, high-margin market that’s usually reserved for U.S. boutique outfits like Audeze and Campfire Audio. “As far as we know, we are the only company in Dongguan with a woodworking department,” Zhou says, while also pointing out that at SIVGA “the development time is short and many decisions can be made on the spot.” This instant design responsiveness is a signature feature of China’s new tech upstarts, and Zhou sums it up with an old Chinese proverb: “small boats change course easier than big boats.”DJI is the pioneer that proved Chinese tech companies could aspire to be more than just manufacturing contractors or fast copiers. “DJI leads the industry with features like automatically avoiding obstacles in flight, which it implemented first,” notes Techsponential lead analyst Avi Greengart. “Rivals in the U.S., France and Taiwan have not been able to catch up.” DJI’s lead is based on the same geographic synergies as SIVGA’s. When a U.S. rival suffers a manufacturing hitch or defect, its ability to identify and react to the problem is hampered by the distance between its designers and manufacturers. DJI doesn’t have that problem, which has helped propel it to being the top drone maker in the world.“These are Chinese companies that want to be industry leaders and innovators. DJI and Insta360 are perfect examples of that movement,” says Anshel Sag, mobile industry analyst for Moor Insights & Strategy. “A big part of it comes from the entrepreneurial spirit of Shenzhen.”Like Dongguan, which this year saw a large new Huawei Technologies Co. campus open, Shenzhen is a nexus of component makers and suppliers eager to find new customers for their wares. The cacophonous Huaqiangbei bazaar in the city exhibits a wild array of gadgets from smartphone-electric shaver hybrids to neon-lit unicycles with Bluetooth speakers. That commoditized fray offers inspiration but also an impetus to rise above it with genuine innovation. The successful companies are the ones who make the most of the rabid production and iteration around them.“In Shenzhen, there’s a well-established supply chain system,” says Insta360 founder Liu Jingkang. “From a research perspective, in-house R&D may only contribute 60% of a product, the rest needs to be finished in factories.” The CEO of OnePlus, another company based in the city, has expressed pride in its ability to prototype new devices at great speed because he’s just a 45-minute drive away from its assembly lines.Even without being Apple Inc., Chinese companies are now building world-class, premium products, though China’s signature feature of undercutting the established market remains. Whether or not a Chinese company is first to a technology, it makes sure to be first to a breakthrough price.Backed by Xiaomi Corp. in 2014, Huami is responsible for creating the massively popular Xiaomi Mi Band, which has flooded the China market at a $20 price. The Mi Band offers most of the features of a Fitbit fitness tracker — including step counting and heart-rate monitoring — at a fraction of the cost. After expanding to sales in the U.S. and launching its own Amazfit brand, Huami is now shipping in excess of 5 million devices per quarter, and its chief executive talks openly about “taking out” at least some of its larger rivals, including Apple and Samsung Electronics Co.“The operating models for Garmin and other European and U.S. smart device vendors are flawed. Their retail price is very high,” Huami CEO and founder Wang Huang says. “You will only be able to sell very expensive products to a very small group of customers because mainstream and lower-end markets will be eroded by companies like us.”Evidence for the Huami chief’s words abounds in the smartphone market, where the top group of manufacturers is increasingly dominated by Chinese names like Xiaomi, Oppo and Huawei. 2018 saw these brands make major inroads into the European market, relying on better pricing and faster feature introductions. Xiaomi “consistently produces budget flagship phones with first-to-market implementations,” says Techsponential’s Greengart. Along with SIVGA, Huami and Insta360, they’re following in the footsteps of companies like Lenovo Group Ltd., which was among China’s early breakout successes after buying IBM Corp.’s PC business in 2004. Their global ambitions and innovation pose a serious threat to the leadership of a plethora of U.S. tech products in areas from design to functionality, whether they be GoPro cameras, Apple iPhones or HP laptops.China’s rapidly rising tech creators are not without commercial savvy. Many of them are planning to seek capital on Shanghai’s new trading venue for startups, locally known as the Star board. Ninebot Inc., the Xiaomi-backed outfit that acquired Segway in 2015, aims to raise $300 million there. In unicorn territory, the Google-backed Mobvoi, which creates natural language translation algorithms for its Wear OS smartwatches, is also said to be seeking a high-value listing on the Star market.Royole, the startup that earned a measure of notoriety by beating Samsung to selling the world’s first foldable device in 2019, has managed to secure a deal with Louis Vuitton that will see the two companies putting flexible screens on handbags of the future. Like Huami initially leaning on the Xiaomi brand to build itself up, Royole stands a chance to be a luxury goods player with the help of a bigger company. The differences between California’s Silicon Valley startups, which have tended to do a better job of marketing and deal-making, and China’s new generation of homegrown businesses are gradually disappearing.How and Why the U.S. Says China Steals Technology: QuickTakeAmerican critics, such as President Donald Trump, commonly point to a track record of Chinese companies copying features from abroad, and one of their bits of evidence is the way Apple’s iPhone software and design seem to be habitually recreated by Huawei, Xiaomi and others. There’s not much that a Western company can do in such situations. When Segway filed a complaint against a number of Chinese brands for IP violations, it ended up conceding the fight and getting acquired by one of its defendants.The observable change now is that a new generation of innovative companies aren’t waiting for someone else to show them the blueprint. China’s rapid ascent in innovation goes beyond anecdotal evidence from startups like DJI and Huami, and the country’s corporations now rank among the world’s most prolific patent applicants.“The trend of China moving to high-end manufacturing, research and design is unstoppable,” said Jia Mo, a Shanghai-based analyst with consultancy Canalys.To contact the reporters on this story: Vlad Savov in Tokyo at firstname.lastname@example.org;Gao Yuan in Beijing at email@example.com;Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Apple Inc.’s decision to skip support for the latest wireless standard on its new iPhones may cost the company a chance at capturing China’s biggest smartphone replacement wave in years.The iPhone maker, which is the only foreign brand to hold a top-five position in China, is struggling to fight off local competitors Huawei Technologies Co., Oppo and Xiaomi, whose slicker designs, more sophisticated cameras and cheaper price tags are wooing customers all over the country. The lack of fifth-generation (5G) cellular support in the newly announced iPhone 11 family won’t immediately be an issue, but it could hurt Apple in mid-2020, when analysts expect China’s smartphone market to rapidly ramp up 5G demand.It will be “extremely difficult” for Apple to maintain its China position into the second half of next year, according to Jia Mo, an analyst at research firm Canalys. “It remains to be seen if iPhone 11 can offer technology innovations to offset some disadvantages in hardware, like lack of 5G support.”Apple on Tuesday launched new iPhones with added cameras, upgraded processors, refreshed design, better batteries and faster charging, however there was little in the company’s presentation that surpassed what Android rivals have already been offering. Still, Apple suppliers saw an uptick in their stock prices following the launch, partially driven by Apple’s reduced $699 iPhone 11 starting price.Apple Bets on Cameras, New Pro Focus to Sell Latest IPhonesChina is hurrying to be a leader in the 5G era, and state-owned mobile operators have pledged billions of dollars to build the requisite nationwide infrastructure. The new wireless standard -- bringing significantly faster speeds and almost no latency -- is seen as the key to unlocking next-generation tech applications like autonomous driving, remote surgery and ubiquitous streaming of high-definition content. Phone vendors are naturally among the earliest adopters, hoping the faster speeds will spur a mobile market that’s plateaued and started to shrink in recent years.Few companies have experienced the slowdown in global smartphone demand as severely as Apple, which stopped reporting the number of iPhones sold from the start of this year. The Cupertino, Calif. company is estimated, by researchers IDC and Canalys, to be shedding millions of unit sales each quarter relative to its prior-year performance, and that problem is also manifesting in China, its biggest market after the U.S. That’s despite multiple rounds of price adjustments, according to IDC. The new iPhone 11 starts at 5,499 yuan in China, whereas Oppo and Xiaomi’s current flagships cost around 3,000 yuan, while at the super premium tier Huawei charges 6,300 yuan at most and Apple’s iPhone 11 Pro starts at 8,699.Huawei’s upcoming flagship Mate 30 Pro will have the company’s Kirin 990 5G processor, which integrates the 5G modem into the main processing chip, saving on space, power and cost. Xiaomi and Oppo are about to introduce their latest 5G phones in China, while Samsung Electronics Co. has already announced its first 5G handset for the country. Vivo, the second-largest phone maker in China, is also scheduled to unveil its 5G flagship next week. Apple’s first 5G-enabled phone, however, won’t be available until next year, Bloomberg News reported earlier.The major replacement cycle will kick off sometime in the second quarter of 2020, as China’s 5G coverage expands and vendors offer more models, according to James Yan, an analyst with consultancy Counterpoint Research. “That means Apple will miss out on the first six months of the cycle,” he said. “Apple will rely on its strength in software and ecosystem to keep user numbers, instead of hardware.”Around 90 million 5G phones will be shipped in China in 2020, a steep increase from the 3 million units forecast to be shipped by the end of this year, according to Yan’s research. The companies fastest to capture that market will also be ideally positioned to serve the projected increase in demand that follows. For Apple, which is now also building out a services and subscription ecosystem, every unit sold or not sold gains significance because it’s the gateway to another subscriber.In addition to the technological race with aggressive Chinese rivals, Apple faces geopolitical headwinds.“The raging trade war is likely to weaken iPhone sales in China,” said TrendForce Analyst Mia Huang. “The tariff risks and volatility in exchange rate will affect the iPhone pricing in China.”To contact Bloomberg News staff for this story: Gao Yuan in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Vlad Savov, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
South Korea has filed a complaint with the World Trade Organization over Japanese trade restrictions, in the latest escalation of a dispute stemming from Japan’s colonial rule over Korea that has dented security and trade relations between the key US allies. Seoul has complained that Tokyo’s removal in July of preferential trade status for three materials critical to South Korean technology companies violated WTO rules by regulating trade for political reasons. Japan’s export restrictions have raised fears of disruption among South Korea’s electronics manufacturers, the country's most important export industry.
South Korea plans to file a complaint over Japan's tighter export controls at the World Trade Organization on Wednesday, accusing Tokyo of being "politically motivated" and "discriminatory" in an escalating row rooted in wartime history. In July, Japan imposed tighter controls on exports of three materials to South Korea used in smartphone chips and displays following a diplomatic dispute over compensation for forced labourers during Japan's occupation of Korea during World War Two.
Moody's Investors Service ("Moody's") assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) to Cerence LLC ("Cerence") in connection with the company's expected spin-off from, Nuance Communications, Inc. ("Nuance" Ba3, Stable), and Cerence's concurrent proposed debt financing. Cerence's proposed $425 million senior secured term loan B and $75 million revolving credit facility were assigned ratings of B2, in line with the CFR.
(Bloomberg) -- Shenzhen Transsion Holdings Co., whose mobile handsets outsell iPhone and Galaxy smartphones in Africa, is planning an initial public offering on Shanghai’s Nasdaq-style Star Board to raise about 3.01 billion yuan ($423 million).Transsion, known as the “King of Africa” on the continent, according to the filing on Monday, has overtaken Samsung Electronics Co. and Apple Inc. as the largest mobile phone maker there, tapping into a huge and fast-growing market.Since founding the Tecno Mobile brand in 2006, founder Zhu Zhaojiang has overseen an expansion that now claims a 48.7% market share in Africa, according to the filing. Transsion shipped 94.44 million mobile phones to Africa in 2018, out of a total of 124 million global shipments.Read More: A Chinese Phone Maker Took Over Africa, for Better and WorseThe company plans to issue as many as 80 million A-shares in the IPO and will set the price on Sept. 17. Proceeds will be used to pay for mobile phone manufacturing base projects and research and development, the filing said.The Star market is China’s latest initiative to entice companies to list at home. Since it launched in the middle of this year, 29 companies have listed with an average eye-popping gain of more than 150% from their IPO prices, according to data compiled by Bloomberg.Transsion posted a net profit of 653.8 million yuan in 2018 on revenues of 22.6 billion yuan. In the first half, it reported a net profit of 817 million yuan, with sales of 10.5 billion yuan.\--With assistance from Fox Hu.To contact Bloomberg News staff for this story: Julia Fioretti in Hong Kong at firstname.lastname@example.org;Ken Wang in Beijing at email@example.comTo contact the editors responsible for this story: Lianting Tu at firstname.lastname@example.org, Teo Chian Wei, Margo TowieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Samsung Electronics Co. and Huawei Technologies Co. took turns announcing new mobile processors at the IFA technology show in Berlin last week, and the big thing the new chips have in common is an integrated 5G modem.In a market dominated by U.S. rival Qualcomm Inc., the world’s two biggest smartphone manufacturers asserted a lead in delivering one of the keys to unlocking widespread availability of 5G devices. A system-on-chip that integrates the applications processor and a fifth-generation wireless modem significantly reduces the space and power requirements compared to existing solutions that use two separate chips.Qualcomm has such models on its 2020 road map, but this past week Samsung announced it’s planning mass production for its alternative at the end of 2019 and Huawei is moving even faster, promising to release its most advanced processor with the Mate 30 Pro smartphone on Sept. 19.The Kirin 990 5G from Huawei subsidiary HiSilicon is built at Taiwan Semiconductor Manufacturing Co. and packs more than 10.3 billion transistors into a space the size of a fingernail. It includes a graphics processor, an octa-core CPU, and the all-important 5G modem, along with dedicated neural processing units for accelerating artificial intelligence tasks.At Huawei’s Berlin launch event, consumer group Chief Executive Officer Richard Yu showed the high-end 990 5G achieving real-world download speeds on China Mobile’s network in excess of 1.7Gbps. That’s fast enough to download high-definition movies and demanding 3-D games in a matter of seconds.Samsung’s approach with its Exynos 980 is to target the mid-range. Along with 5G capabilities, this new chip integrates 802.11ax fast Wi-Fi along with Samsung’s own NPU. It won’t run apps and games quite as quickly as flagship chips, but should help the South Korean company garner a slice of the more mainstream market before Qualcomm brings out an armada of new 5G-capable chips next year.Samsung’s emphasis on this part of the mobile market was also signaled by its launch of the Galaxy A90 this month, one of the earliest examples of a mid-range device with 5G.Huawei’s Next Flagship Phone Set to Sink Without Google Apps (1)For its part, Qualcomm is promising to cover the entire range of price points and mobile device types with its 5G portfolio in 2020, however the world’s premier mobile chip designer is finding itself behind its faster-moving rivals.While Huawei is “pushing to show tech leadership,” the company has “made sacrifices in order to make an integrated SOC,” said Anshel Sag, mobile industry analyst at Moor Insights & Strategy. He cited the chip’s lack of support for mmWave -- the high-frequency 5G favored by U.S. carriers AT&T Inc. and Verizon Communications Inc. plus some European ones -- as an example. The Kirin 990 5G is fast by today’s standards and a great upgrade for Huawei’s upcoming devices in China, but Sag said it’ll find itself outpaced by rivals in 2020.The silver lining to the trade war for Qualcomm, however, is that Huawei’s Mate 30 Pro will struggle to sell in Europe so long as the Trump administration prevents it from offering Google services on new phones. Irrespective of how fast and advanced its Kirin 990 5G may be, the trade war will prevent Huawei from fully capitalizing on its capabilities and may, in fact, push the company to license the chip out to other smartphone vendors, such as Lenovo Group, which is not subject to the same sanctions.If the U.S. keeps Huawei on its blacklist, preventing it from buying American technology, the company faces further chip challenges. To develop successors to the Kirin 990, it needs to license the latest designs from SoftBank Group’s ARM, but that company discontinued work with Huawei because of the U.S. ban.(Updates with analyst comment in the third from last paragraph.)To contact the reporter on this story: Vlad Savov in Tokyo at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Nate Lanxon, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- AT&T Inc.’s sweeping transformation from Ma Bell to a multimedia titan has gone both too far and not far enough for Elliott Management Corp.Billionaire Paul Singer’s New York hedge fund disclosed a new $3.2 billion position in AT&T, taking on one of the nation’s biggest and most widely held companies with a plan to boost its share price by more than 50% through asset sales and cost cutting.Investors applauded the development, briefly sending AT&T shares on their biggest intraday rally in more than a decade.For Singer, the move represents one of the biggest bets in the four decades since the hard-driving activist investor founded his firm. And it strikes at the core of the way AT&T has built its bigger-is-better empire: a costly M&A binge that has turned the carrier into one of the most indebted companies on Earth.“There will be a fight,” said Chetan Sharma, a wireless-industry analyst.Elliott outlined a four-part plan for the company in a letter to its board Monday. The proposal calls for the company to explore divesting assets, including satellite-TV provider DirecTV, the Mexican wireless operations, pieces of the landline business, and others.It urges AT&T, led by Chief Executive Officer Randall Stephenson, to exit businesses that don’t fit its strategy, run a more efficient operation and stop making major acquisitions. Elliott said it would also recommend candidates to add to AT&T’s board.In response, AT&T said it would review Elliott’s recommendations and said many of them are “ones we are already executing today.”The telecom giant said its strategy is “driven by the unique portfolio of valuable businesses we’ve assembled across communications networks and media and entertainment, and as Elliott points out, is the foundation for significant value creation.”The carrier said it believes that “growing and investing in these businesses is the best path forward for our company and our shareholders.”Still, investors seem to think Elliott’s plan could wring more value from AT&T. The shares surged as much as 5.2% to $38.14 in New York trading Monday. That was the biggest intraday jump since March 2009 and put them at their highest level since February of last year. They later settled down to a 2.7% gain amid a broader pullback in the market.Elliott said the investment -- among its largest to date -- was made because the company is deeply undervalued after a period of “prolonged and substantial underperformance.” It argued this has been marked by its shares lagging the broader S&P 500 over the past decade.It pointed to a series of strategic setbacks, including $200 billion in acquisitions, the “most damaging” of which was its $39 billion attempted purchase of T-Mobile US Inc. That deal resulted in the largest breakup fee of all time when the government blocked it in 2011 -- about $6 billion in cash and assets.“In addition to the internal and external distractions it caused itself, AT&T’s failed takeover capitalized a viable competitor for years to come,” Elliott said.The hedge fund also slammed the subsequent acquisitions of DirecTV and media giant Time Warner Inc. That puts particular pressure on Stephenson, 59, who oversaw the deals Elliott criticized in the letter.But, while the position in AT&T is large, Elliott may have a difficult time pushing for change unless it gets other investors to back its stance. Its newly disclosed stake in AT&T represents just about 1.2% of the company’s total market value.Elliott’s plan also calls for aggressive cost-cutting measures that aim to improve AT&T’s margins by 3 percentage points by 2022. Those margins have come under pressure amid cord cutting in video and widespread discounting in wireless, and Elliott said competitors like Verizon Communications Inc. have done a better job addressing those headwinds.Elliott said in the letter it has identified opportunities for savings in excess of $10 billion, but the plan would only require cost cuts of $5 billion.Elliott is also calling for a series of governance changes, including separating the roles of CEO and chairman -- currently held by Stephenson -- and the formation of a strategic review committee to identify the opportunities at hand.Transformative DealsWith a series of deals over the past several years, AT&T has transformed itself from a traditional telecom company into a multimedia behemoth. The company bought satellite-TV provider DirecTV for $67 billion in 2015, leaping into first place among U.S. pay-TV companies. Elliott criticized that deal in its letter as having come “at the absolute peak of the linear TV market.”AT&T then moved firmly into entertainment and media with the $85 billion acquisition of Time Warner in 2018. That deal brought marquee assets such as HBO, CNN and Warner Bros.“Despite nearly 600 days passing between signing and closing (and more than a year passing since), AT&T has yet to articulate a clear strategic rationale for why AT&T needs to own Time Warner,” Jesse Cohn, a partner at Elliott, and Marc Steinberg, an associate portfolio manager, said in the letter. “While it is too soon to tell whether AT&T can create value with Time Warner, we remain cautious on the benefits of this combination.”High-Profile FightsElliott has a history of tackling some of the biggest and most high-profile companies around the globe, including EBay Inc., Pernod Ricard SA, and Bayer AG in the past year alone. The AT&T investment marks Elliott’s single largest equity investment with an activist slant.It’s not the first time Elliott has taken on a major telecommunications company, either. The hedge fund battled Vivendi SA for control of the board of Telecom Italia SpA, eventually winning control in 2018 in a fight that dragged on into this year.Those battles don’t always end in success. In Elliott’s proxy fight at Hyundai Motor Group earlier this year, investors opted not to elect its slate of directors at two of the South Korean manufacturer’s subsidiaries. But even in some of its major losses, like at Samsung Electronics Co., the repercussion of its agitations can send ripples beyond the proxy clash.Samsung managed to keep Elliott at bay in 2015 but touched off a series of events that resulted in a brief jail term for the electronics giant’s billionaire heir apparent for influence peddling, protests by hundreds of thousands of people in Seoul, and the downfall and imprisonment of South Korea’s president, Park Geun-hye.Heavy DebtAT&T is the most indebted company in the world -- not counting financial firms and government-backed entities -- with $194 billion in total debt as of June, a legacy of Stephenson’s steady clip of large acquisitions. The CEO used to keep a spreadsheet of a few dozen companies that he studies on his tablet to plan his next big deal, people familiar with the matter told Bloomberg in 2016.The stock is among the top 20 most widely held U.S.-traded companies among institutional investors, according to data compiled by Bloomberg. That’s partially because of its steady dividend, which totaled $2.04 a share last year, giving investors a reliable payout in good times and bad.What Bloomberg Intelligence Says“AT&T will likely be under greater pressure to streamline operations and wring better performance out of Time Warner following the involvement of activist investor Elliott Management, yet this probably won’t prompt a change in company strategy. ... Elliott’s recommendation to spin off the DirecTV satellite business isn’t practical, in our view, as AT&T likely needs its free cash to help fund its dividend.”\-- John Butler, senior telecom analyst, and Boyoung Kim, associate analystClick here to view the research.Phone companies have also traditionally been considered a safety net for investors in bad economic times because people still need to communicate, though AT&T’s exposure to the landline business has more recently been a drag on profits because more people are shutting off their home phones and going wireless-only.Elliott’s move also put AT&T back in the cross hairs of one of its biggest critics: Donald Trump.The president, whose Justice Department unsuccessfully opposed AT&T’s Time Warner acquisition and who has slammed CNN’s coverage of him, cheered on Elliott’s efforts.“Great news that an activist investor is now involved with AT&T,” he tweeted.\--With assistance from Olga Kharif.To contact the reporter on this story: Scott Deveau in New York at email@example.comTo contact the editors responsible for this story: Liana Baker at firstname.lastname@example.org, Nick Turner, John J. Edwards IIIFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Given the U.S.-China trade war, one might think that Apple Inc. contravening Chinese labor laws would provide just the ammunition that Beijing needs to crack down on the tech giant.Yet there are good reasons why China might prefer not to crack the whip too fiercely on the iPhone maker. Apple plays an important role in the local economy, but amid the rising tensions with President Donald Trump’s administration, the Cupertino, California-based firm has another significant role: as a quasi proxy, lobbying in Washington, D.C. for interests similar to China’s.Trump has introduced or threatened tariffs on $300 billion-worth of Chinese imports. In response, China has targeted U.S. farmers with retaliatory tariffs. So far, Apple largely has managed to stay out of the firing line of Chinese authorities, even as its local sales have struggled.Much of Apple’s manufacturing is in China, so tariffs there are off the table. But there are other steps Beijing could take to make the U.S. company’s life difficult.Take the experience of some of South Korea’s biggest firms. The likes of Samsung Electronics Co., Hyundai Motor Co. and LG Electronics Co. are all moving production out of China after facing heightened local competition and regulatory headwinds, according to Nikkei. A spat over Seoul deploying a U.S. missile-defense system spurred Chinese boycotts of South Korean companies. That prompted Seoul-based supermarket chain Lotte Mart to sell its Chinese operations.The nature of Apple’s most recent transgression would seemingly make it easy for China to justify retaliation. Foxconn, Apple’s biggest contract manufacturer, used too many temporary staff at the world’s largest iPhone factory in Zhengzhou, China Labor Watch said in a report.They represented about 50% of the workforce in August, the non-profit advocacy group said; Chinese labor law limits temporary workers to 10% of the total.The millions of jobs that Apple, Foxconn and other contract manufacturers and suppliers support in China have meant that any crackdown on its products would negatively impact the local economy. Employing a higher-than-permitted proportion of seasonal staff weakens that argument. The less the economic benefit, the easier it is to warrant making Apple’s life harder.But Apple’s lobbying prowess also has a corollary benefit for China.I’m not suggesting that Apple Chief Executive Officer Tim Cook is working in cahoots with Beijing. Goodness knows his firm has endured its share of difficulties there. In 2016 it had to shutter the iBooks Store and iTunes Movies, and a year later was ordered to remove hundreds of VPN applications from Apple’s Chinese app store.The reality is simply that, when it comes to trade, Apple’s interests often (though by no means always) align with China’s. It has spent a decade cultivating a complex supply chain across the country’s coastal regions, and lists more than 350 Chinese production facilities as suppliers. In 2017, it said it has “created and supported 4.8 million jobs in China.” The imposition of higher tariffs damages both China and Apple. It would take a decade or more to replicate the Chinese operations in Vietnam, India or Indonesia.Cook’s value as a lobbying proxy was demonstrated at a dinner with Trump just last month. The president said Cook had made a “good case” that tariffs would handicap the company in its competition with Samsung, whose smartphone manufacturing is more globally distributed.The president had already delayed until mid-December a 10% tariff class which would have affected the iPhone in the crucial Christmas shopping season. The stay of execution affected toys and laptops too, providing a wider benefit to the Chinese economy.Apple said that its own investigation subsequently established that the percentage of temporary workers at the Zhengzhou plant also exceeded its own standards. But with provincial governments so dependent on the firm and its suppliers for local jobs, and the company’s clout in D.C. benefiting the national government, they have limited incentives to impose swingeing punishments.To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: Stephanie Baker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
SAN FRANCISCO/BERLIN, Sept 6 (Reuters) - Qualcomm Inc promised on Friday to bring 5G mobile phones to the masses with a high-end modem and said its chips would also power mid-price devices hitting the market next year. Fifth-generation chipsets from Qualcomm, the world's biggest supplier of mobile phone chips, now run on five devices from Samsung Electronics, including the $1,299 Galaxy S10 5G model and the new $2,000 Galaxy Fold. Samsung, the world's top smartphone seller, has also put Qualcomm chips in its lower-priced A90 5G model, which had used Samsung chips in an earlier version.
Qualcomm Inc said on Friday it will put fifth-generation, or 5G, technology into chips powering mid-priced mobile phones starting next year, expanding use of chips now found almost exclusively in pricey phones such as Samsung's $1,299 Galaxy S10 5G model. Qualcomm is already supplying phone makers such as Samsung Electronics Co Ltd with chips for 5G wireless data networks, which are expected to be faster than current 4G and LTE networks. Qualcomm said in remarks prepared for the IFA tech fair in Berlin that it plans to add 5G capabilities to its lower-cost Snapdragon 6 and 7 series devices, which could make 5G phones available at lower prices than the current models, mostly flagship devices priced at a premium.
(Bloomberg Opinion) -- With Samsung Electronics Co. finally launching its troubled Galaxy Fold, success for the $1,980 luxury handset may be measured not in how many it ships, but how many competitors decide to develop their own.Pre-release enthusiasm for the device turned to exasperation in April when review units were found to have a severe defect related to the folding screen design. That made reviewers, analysts and investors rightfully skeptical about whether Samsung had gone too far and fallen off the bleeding edge of technology innovation. Three years earlier, the South Korean giant had grappled with exploding batteries in the Galaxy Note 7, ultimately discontinuing the device after a botched recall.Management handled the setback much better this time, making the pragmatic decision to delay release of the Fold pending a redesign. Now that it’s available, the spotlight will once again be on the screen to see whether the design can hold up to daily wear and tear.Joining the crowds scrutinizing every millimeter of the screen and its hinge will be executives at Huawei Technologies Co., Oppo, Vivo, Xiaomi Corp. and even Apple Inc. While all are rivals to Samsung in smartphones, they’re also potential customers for its displays.Samsung’s virtual lock on organic light-emitting diode (OLED) technology over the past few years helped that division post an impressive run of operating profits as leading names, including Apple, clamored to get their hands on these brighter, lower-power displays. That star has since faded. The global smartphone industry is now in a funk, and Samsung isn’t alone in wanting to offer something fresh and exciting to juice sales.That makes the Fold a product of two divisions at Samsung. The smartphone unit naturally wants an awesome design that sets tongues wagging, while the display division wants to be able to show prospective clients what it can do. In this regard, the Fold is like a concept car for smartphones, as I observed in February. It’s intended to showcase the company’s technological brilliance rather than drive sales.If the display division can pull it off, foldable technology will be seen as an engineering marvel. Bloomberg’s Sohee Kim and Mark Gurman wrote on Thursday that while a crease is still visible in the middle of the folded device, it’s not obtrusive. Other features, such as transition from closed to open, work well. The wider reception among media seems to follow a similar tone.For the consumer-facing smartphone division, the challenge will be overcoming prolonged upgrade apathy among handset users. At the same time, the business can ill-afford another product defect that would cost money and damage the brand.If customer reviews are positive, then both divisions of Samsung will be able to claim victory. More broadly, it will show that the company can manage to both innovate and execute. It will also demonstrate that the company has learned the lessons of the Galaxy Note 7, having reacted promptly and appropriately on this occasion to avert what could have been a PR disaster.The Galaxy Fold is only the start. Samsung is working on a new foldable that will collapse into a compact square, Bloomberg News reported earlier this week. That device will bring with it a further array of design, engineering and marketing challenges.The real success of the handset, though, will be seen when competitors start to roll out their own foldable phones – using Samsung screens, of course. To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The innovative multi-screen device was initially slated to be released in April, but its release was pushed back when multiple press reviewers experienced problems with defective screens.
(Bloomberg) -- Apple Inc. is developing in-screen fingerprint technology for as early as its 2020 iPhones, according to people familiar with the plans. The technology is in testing both inside Apple and among the company’s overseas suppliers, though the timeline for its release may slip to the 2021 iPhone refresh, said the people, who asked not to be identified discussing private work.In-display fingerprint readers have this year become ubiquitous among Android rivals to the iPhone, with the latest Samsung Electronics Co., Huawei Technologies Co., Oppo and Xiaomi Corp. flagships all featuring the technology. Its appeal lies in eliminating the need for additional bezel around the display while still retaining biometric security at the front of the device.Apple introduced fingerprint scanning on iPhones in 2013, following its acquisition of AuthenTec Inc., a pioneer in the field. Integrated into the iPhone’s home button, the Touch ID system was used for unlocking the device, approving payments and authorizing app downloads -- and it gave Apple a technological edge with its speed and reliability. Touch ID was replaced with face-scanning sensors in 2017 with the iPhone X launch. Branded as Face ID, the new face authentication again put Apple ahead of the competition with a more robust and secure implementation than rivals.Apple Readies IPhone, IPad Camera Upgrades, Revamped MacBook ProThe upcoming fingerprint reader would be embedded in the screen, letting a user scan their fingerprint on a large portion of the display, and it would work in tandem with the existing Face ID system, the people familiar with Apple’s plans said.Trudy Muller, a spokesperson, for Cupertino, California-based Apple declined to comment.Apple is considering including this in-screen touch sensor in the 2020 iPhone model if testing is successful, the people said. Suppliers have proven their ability to integrate the technology into iPhones, but the company has not managed to mass-produce it yet, one person familiar with the development work said.The New iPhones and Apple’s Future: A PreviewApple is also working on its first low-cost iPhone since the iPhone SE. That could come out as early as the first half of 2020, the people said. The device would look similar to the iPhone 8 and include a 4.7-inch screen. The iPhone 8 currently sells for $599, while Apple sold the iPhone SE for $399 when that device launched in 2016. The new low-cost phone is expected to have Touch ID built into the home button, not the screen. Nikkei reported plans for a cheaper iPhone earlier this week.Apple stopped selling new iPhones with Touch ID in 2018 with the launch of the iPhone XR and iPhone XS, saying that Face ID was more secure than fingerprint scanning. With the planned low-cost iPhone and future devices with in-display fingerprint readers, Touch ID will apparently be making a comeback. Apple is also planning an updated Face ID sensor for its new iPhones that will be announced next week.If Apple moves forward with the in-screen fingerprint scanner, the company would offer users both biometric options, letting them unlock and authenticate app transactions with either their face or fingerprint. In any case, the Face ID sensor system will need to be retained because its technology forms the basis for more advanced portrait photography and augmented reality features like Animoji.This year’s new high-end iPhones, to be introduced Sept. 10, will also include upgrades to low-light photography, improved water resistance, shatter-resistant glass technology, faster processors and a new way to charge AirPods, Bloomberg News reported. For 2020, Apple is planning a larger iPhone revamp with 5G wireless technology, a faster processor, and rear-facing 3-D cameras for enhanced augmented reality capabilities.\--With assistance from Yuki Furukawa.To contact the reporters on this story: Mark Gurman in Los Angeles at email@example.com;Debby Wu in Taipei at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Alistair Barr, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
in South Korea on Friday, promising that the screen defects that marred its initial launch in April have been fixed. will become part of a family of folding devices and is betting that it can revive slowing smartphone sales with the design. Samsung has extended the smartphone’s protective layer beyond the bezel to stop users from removing it and added protection caps on the fold’s hinges to protect the device from external particles. It said it had extensively tested the phone over the past five months to make sure that initial problems with breaking screens do not recur.
(Bloomberg) -- Samsung Electronics Co.’s Galaxy Fold will go on sale Sept. 6 in its home market of South Korea, following a months-long delay caused by the discovery of a severe defect in the original design.The Galaxy Fold, a $1,980 luxury Android device that opens like a book, was originally scheduled to go on sale in April, but it was delayed after multiple early tests, including by Bloomberg News, found the screen to have severe reliability issues. Samsung said in July that the phone would relaunch in September but had not previously provided an exact date.People familiar with Samsung’s plans indicate that the Galaxy Fold will be coming to the U.S. on Sept. 27, and Samsung itself lists the American market as one of its expansion geographies after the Korean launch, alongside France, Germany, Singapore and the U.K.In South Korea, the Galaxy Fold will be offered in only one configuration -- with 512GB of storage, 12GB of RAM and fifth-generation cellular connectivity -- by SK Telecom, KT Corp. and LG Uplus Corp. South Korea’s carriers said the sticker price for the Fold will be 2.39 million won (roughly equivalent to the $1,980 US price) with a bundled free Montblanc luxury case. 5G will be an option in some other markets.As Bloomberg previously reported, Samsung’s redesign involves stretching the Fold’s protective film to wrap around the entire inner screen, making it impossible to peel off by hand. The company also put protective caps on the top and bottom of the hinge and reduced the space between the hinge and the display, preventing the ingress of dust, which was another pain point in the original design. Questions over the Galaxy Fold’s durability now move on to how well the hinge and display hold up over the long term and how well those protective caps will withstand external shock. A crease is still visible in the middle of the unfolded device, but is not obtrusive.Transitioning seamlessly between closed and open states is a universal challenge for foldables, and Samsung’s solution is a promising app continuity system. It picks up most user activities from the small external screen and expands them on the bigger display inside when flipped open. It works well.When answering phone calls on the Fold, the most natural way to talk is by holding up the closed device to your ear. If a user wants to open the tablet up and continue conversations, the call is automatically switched to speakerphone mode. For more privacy, Samsung’s Galaxy Buds (which come bundled in the box) or USB Type-C earphones are the answer.Samsung’s first foldable device is arriving on the market mere days ahead of Apple Inc.’s 2019 iPhone refresh. That puts it up against formidable smartphone competition, however Samsung’s pitch for the Fold is that it defines its own new niche. Featuring a 7.3-inch internal flexible display, a smaller screen on the outside and app continuity between the two, the Galaxy Fold is an attempt at crafting a tablet device that fits into the space of a somewhat thick phone.Bloomberg News reported this week that Samsung is already working on a new foldable phone for 2020, one that collapses down to a square clamshell. Smaller, thinner and cheaper than the Galaxy Fold, that second device is likely to have wider market appeal than the distinctly exclusive and high-end Fold, but Samsung’s future plans for the category are said to hinge on the reception to the gadget.(Updates with a hands-on experience from the 5th paragraph.)To contact the reporters on this story: Sohee Kim in Seoul at firstname.lastname@example.org;Mark Gurman in San Francisco at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Vlad Savov, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Back before Apple and Android phones put paid to Nokia's handset dominance, the Finnish manufacturer made other mis-steps, such as pretty much ignoring the clamshell trend popularised by Motorola's Razr. Nokia doesn't make phones anymore. It has licensed the brand instead to a Finnish company called HMD Global, packed with ex-Nokia people.
in a bid to ease tensions in their rapidly escalating trade war, according to statements from both Washington and Beijing. The decision by the two governments to press ahead with more talks comes amid growing alarm about the impact of the trade war on the US economy.
Samsung Electronics has begun to use domestically produced etching gas in its chipmaking process in a move to reduce its dependence on Japanese suppliers amid a deepening trade dispute between South Korea and Japan. “We’ve tested the use of hydrogen fluoride made by domestic suppliers and begun to use it in the production process, along with Japanese imports,” said a Samsung executive.
The world’s biggest smartphone maker announced early Thursday that the Galaxy Fold will go on sale in South Korea on Friday, and in select countries such as the U.S., the U.K., France and Germany “in the coming weeks.”
SEOUL/BERLIN (Reuters) - Samsung Electronics Co Ltd on Thursday said its first foldable smartphone, the Galaxy Fold, will be available in South Korea from Sept. 6 with fifth-generation (5G) mobile connectivity. It will go on sale in Britain, France and Germany in less than two weeks, with a U.S. release also planned. The remodeled version of the Galaxy Fold, which opens like a book to reveal a 7.3-inch infinity display, now has the screen's protective layer tucked under the bezel at its edge.
Samsung Electronics Co Ltd’s first foldable smartphone, the Galaxy Fold, will go on sale on Friday in South Korea, a source with direct knowledge of the matter said on Wednesday. Samsung declined to comment on Wednesday. Samsung has promised to usher in a new age of foldables as part of its effort to showcase innovation amid the saturated smartphone market.