Aneel Bhusri

Sources familiar with the company’s plans tell AllThingsD that Workday has chosen the four bankers that will lead it through the IPO process: Morgan Stanley, Goldman Sachs, Allen & Company and JPMorgan Chase & Co. The search for bankers caps a process begun in December.

The company’s IPO path calls for an S-1 filing to be made with the Securities and Exchange Commission by mid-July. After a late summer or early fall road show, its shares would debut between October and December, depending on how favorable market conditions are, sources familiar with the matter tell me.

The process began in earnest after Workday hired its new CFO, Mark Peek, away from VMware, where he was also CFO.

Workday is feeling emboldened in part by the successful offerings of Jive Software and Splunk, both enterprise companies with their hands in the cloud business. Workday itself is a pure cloud software play, specializing in human resources applications, a white-hot area of enterprise that has seen a lot of M&A activity of late.

In December, software concern SAP spent $3.4 billion to acquire SuccessFactors. Then, in February, software giant Oracle spent $1.9 billion to acquire Taleo, in a deal that took place shortly after I interviewed Taleo’s CEO. Even Salesforce got into the act, acquiring the start-up Rypple for an undisclosed amount in December.

Much of that dealmaking came in response to concerns about Workday, especially after its impressive $85 million Series F round of institutional funding at a $2 billion valuation, which AllThingsD reported exclusively in October. A Bloomberg News report said that round was oversubscribed and grew to $100 million when Michael Dell’s MSD Ventures joined.

Investors in that round included several who also took part in institutional rounds in Facebook and Web gaming player Zynga: T. Rowe Price, Morgan Stanley Investment Management, Janus, and Bezos Expeditions, the personal investment entity of Amazon CEO and founder Jeff Bezos. William Danoff, the manager of Fidelity’s $80 billion Contrafund, the mutual fund giant’s largest stock-based fund, also participated in that round.

A Workday IPO, which would raise about $500 million, would make for a sweet payday for the company’s earlier investors, which include Dave Duffield and Greylock Partners, who invested $90 million in four rounds, and New Enterprise Associates, which joined a $75 million Series E round in 2009. By my math, Workday’s total capital raised comes to a cool $195 million.

So how’s business? With the company having disclosed $160 million in billings total bookings in 2010, sources familiar with its operations tell me bookings in 2011 exceeded 100 percent growth. That would be above the $320 million in 2011 bookings CEO Aneel Bhusri told me he expected last October.

Workday is essentially the creation of PeopleSoft vets Bhusri and Duffield. They started the company in 2005, not long after losing a pitched battle to resist a $10 billion hostile takeover by Oracle. Bhusri and Duffield concluded that the next battlefield for enterprise software would be in the cloud. They kickstarted Workday using their own money and some funding from Greylock, and brought some PeopleSoft employees with them.

The idea was to re-create PeopleSoft, which makes software that businesses need to run day to day, but to deliver it from the cloud.

And unlike other cloud players that approach smaller companies and work their way up to ever-larger customers, Workday’s customers are already in the big leagues. The average Workday customer — there are 280 — has between 10,000 and 15,000 employees. The biggest is Flextronics, the huge electronics manufacturing company, which has 200,000 employees. Other customers include Time Warner, Thomson Reuters, Chiquita Brands and Salesforce.com. There are Workday records on more than two million employees on its system. All that after only four-plus years of active selling. A second, newer line of financial applications aimed at helping companies more efficiently manage their spending is getting traction, too.

Workday will probably be the biggest among a pending batch of enterprise-oriented IPOs set for summer and fall after the Facebook madness is over. For one, there’s Violin Memory, which I’ve been reporting on quite a bit. And Reuters is reporting that cloud storage and collaboration concern Box is looking like it’s eyeing an IPO in 2013. The bankers are going to be busy.

Winning is sweet. Especially when you’re underwriting one of the most hotly anticipated tech IPOs of the decade and stand to make hundreds of millions on it. And JPMorgan Chase wants to relish every last moment.

The firm went all out to celebrate Facebook’s forthcoming roadshow, which kicks off Monday, bedecking their New York offices with blue-and-white banners, flags with giant thumbs-up “Like” symbols, as well as assorted other Facebook-related booty to celebrate the occasion.

It was also, in part, to welcome Facebook management to the J.P. Morgan headquarters, as top Facebook execs are doing the rounds with each of the three lead underwriting firms — including Goldman Sachs and Morgan Stanley — to practice their pitch before doing it over and over with investors all across the country.

As CNBC captured on camera earlier Friday morning, Facebook CFO David Ebersman was escorted to his car by J.P. Morgan Vice Chairman James Lee and his colleagues, all of whom were clad in Facebook-themed track jackets, fully flying the company’s colors.

Among the other items J.P. Morganites created in celebration of Facebook’s visit: Paper coffee sleeves, banners hung across the firm’s lobby windows and baseball caps.

So far, no hoodies or flip-flops in sight — but Mark Zuckerberg has yet to arrive on the scene.

(Photo credit: ischafer/Instagram; Screenshot: CNBC)

Today’s reminder comes via the analyst team at J.P. Morgan, who predict that the average retail price for a tablet will drop 15.7 percent next year — from $529 to $446.

It’s also worth noting that 20 percent downward lurch for the current quarter. That’s due primarily to Amazon’s entry with the $200 Kindle Fire, which at the very least seems to be moving a lot of units. Apple’s lowest-priced iPad, for reference, starts at $500.

Yesterday, Techcrunch reported that the company has closed the round, and that it was in fact $70 million at an impressive $2.5 billion valuation. Yet the mystery remained: Who are Palantir’s new investors? Two unnamed New York hedge funds.

Today there are new details from Dan Primack at CNN/Money’s Term Sheet that at least one of the two investors is SAC Capital and that the other is speculated to be Tiger Global Management.

I’ve been speaking to my own sources familiar with this funding deal and can confirm that Tiger Global Management is indeed the second hedge fund involved in the round. Multiple earlier investors and university endowments also participated in the round.

And while the company is known mainly for its work with government customers — intelligence agencies have been known to put Palantir’s powerful database technology to use in the hunt for terrorists — it has been boosting its customer base in the private sector as well. Palantir was recently inducted into the J.P. Morgan Chase & Co. Hall of Innovation, an indication of that shift. Its customer base is now 60 percent private.

Named for the mystical seeing stones in the “Lord of the Rings” novels, the company handles massive amounts of data — up to a petabyte — at massive scales for the purpose of analysis. Its government clients have been known to use it to track suicide bombers and to root out abuse of government stimulus money.

The first whiffs of this funding round came in a filing last month with the U.S. Securities and Exchange Commission. This, of course, would come on top of $50 million that TechCrunch reported it had raised in May, and another $90 million it raised in June, which would bring its total funding to $210 million.

And yes, it’s still all very secretive, but that’s not to say that there haven’t been times when the company’s executives came out and talked about what they do. Founder and CEO Alex Karp appeared on the Charlie Rose show in 2009 to talk about cyberterrorism. Key quote: “Software and technology has democratized espionage.” Hear him explain it below:

We heard the tip from a source familiar with the situation, and an HP spokeswoman just confirmed it: “HP’s current vice president of investor relations, Steve Fieler, has decided to leave HP to pursue other opportunities. Steve will stay on with HP through the Q4 earnings cycle to facilitate an orderly transition.”

We haven’t yet heard where he’s going, nor anything about a replacement being named.

According to his LinkedIn profile, Fieler was named VP for investor relations by CFO Cathie Lesjak in July of 2010. He first joined HP in 2004 as senior director for strategy & corporate development after stints at AirPrism and General Electric, among others.

The move is the latest in a string of executive shifts at HP during the last several months. In June, chief administrative officer Peter Bocian left for a job with J.P. Morgan.

Then in July, Stephen DiFranco was named senior vice president and general manager for the Americas region in the Personal Systems Group (the unit now expected to be spun off in the coming months), reporting to Todd Bradley.

On Aug. 18, HP announced a torrent of news, including plans to spin off its personal computer unit, shut down the webOS hardware business and spend $10 billion to acquire the British software firm Autonomy in a move to shift its emphasis away from consumer-oriented businesses in favor of more enterprise-centric businesses. HP shares still haven’t recovered from that combination and have fallen about 24 percent since that day.

As HP announced the news on a conference call with analysts that day, it fell to Fieler to begin the proceedings with the opening statement confirming all that had been reported earlier in the day.

Soon after that, Bill Wohl, chief communications officer, was put on what’s been described as a “special assignment,” and HP’s corporate communications department was placed under the authority of chief marketing officer Marty Homlish.

HP shares fell along with the rest of the market today, down $1.21, or more than 5 percent, to $22.66.

AllThingsD exclusively reported Bocian’s departure ahead of a wider management shakeup on June 13. Initially, I had reported that he was bound for J.P. Morgan Chase, but then learned that Bocian’s talks with that firm weren’t finalized, so I stepped back and opted to say he was heading to an investment bank. Clearly, though, my source was correct, if a tad wobbly on that particular aspect of his or her information in the middle of what was then a fluid situation.

Bocian’s departure was announced on the same day as those of CIO Randy Mott and executive vice president Ann Livermore, though Livermore joined HP’s board of directors. That same day Dave Donatelli, executive vice president and general manager of Enterprise Servers, Storage and Networking, effectively took over Livermore’s job and was promoted to a position reporting directly to CEO Léo Apotheker. Bill Veghte, executive vice president for software, was similarly promoted, as was Jan Zadak, the recently appointed executive vice president for Global Sales.

Bocian’s title will be Executive Vice President, Head of Corporate Services and Finance and he’ll be reporting to Frank Bisignano and Doug Braunstein. Bocian will sit on the executive committee, will manage corporate real estate, procurement, and finance. He’ll have four executives reporting to him. He’ll be starting at the new job this week.

Bocian is a 20-year veteran of NCR, and spent three of those years as its CFO, where he worked for Mark Hurd, the former CEO both of NCR and HP, and now a co-president at Oracle.

The internal memo from Bisignano and Braunstein at J.P. Morgan, which I borrowed from The Journal, is below.

We are very pleased to announce that Pete Bocian will join JPMorgan Chase as an Executive Vice President, Head of Corporate Services and Finance, reporting jointly to us. In this role, Pete will manage Firmwide Real Estate, General Services & Procurement, and Finance for the CAO organization. He will be a member of the Executive Committee and our individual management teams.

The following executives will report to Pete: David Arena, Kim Bertin, Rich Buccarelli, Jim Foster and Bill Kager.

We’re excited to have him as part of our senior team. He has served as the Chief Administrative Officer and Chief Financial Officer at some of the largest, most admired global companies, and has experience in technology, retail, and financial branch automation. Since late 2008, he has been CAO of Hewlett Packard, and previously was an EVP, CFO and CAO of Starbucks. He also spent over 20 years with NCR Corporation, with the last three as CFO. He received an MBA in accounting from Michigan State University, and is also a veteran of the United States Navy.

Throughout his career, Pete has a proven track record of success across multiple industries in managing complexity and change with a focus on business results and operational efficiency. We know we will all learn a lot from him and look forward to having his experience and judgment at our management tables.

He starts this week. Please join us in welcoming Pete to JPMorgan Chase.

Among the most likely are J.P. Morgan, Bank of America and Deutsche Bank.

The Washington, D.C.-based company, which is the second-largest daily deals company after Groupon, is seeking $1 billion at an implied valuation between $10 billion and $15 billion.

Groupon is seeking to raise $750 million in an IPO, which it filed with the SEC in early June.

The lead underwriters that LivingSocial is likely to work with do not overlap with the ones leading Groupon’s offering, although there might be some overlap if others join later.

LivingSocial has raised a significant amount of money from Amazon.com. Its last round of capital totaled $565 million at a valuation of $3 billion.

Moskowitz’s rationale for this is simple: The Air’s sales rose 2.9 percent sequentially in the first quarter, significantly outpacing the Mac’s overall. Add to this the fact that Apple shipped 432,000 MacBook Airs during that period, up 412.9 percent year over year at a time when the broader PC market was down 10.1 percent, and it’s not hard to see that the machine is building up quite a bit of traction in the market.

“Our conversations with industry contacts, coupled with our team’s recent Asia tech food chain trip, indicate that the MacBook sell-in trend continues to exhibit increasing momentum,” Moskowitz says. “Over the next 12-18 months, we think that the average quarterly run rate of the device could reach 700,000 units, which implies a $3 billion-plus revenue opportunity.”

Which, frankly, isn’t that hard to imagine. Certainly not now with the impending launch of iCloud, which will temper the average user’s need for high-capacity hard drives and give the Air storage to match its performance characteristics.

FURTHER READING:

• Apple Reaching for the Cloud With MacBook Air and N.C. Data Center
• iCloud: The Mother of All Halos
• Apple’s Invisible iCloud: The Promise of Simple, Seamless Sync

]]> http://allthingsd.com/20110616/the-macbook-air-apples-3-billion-baby/feed/ 0 http://allthingsd.com/20110610/cafepress-looks-to-public-markets-to-raise-80-million/ http://allthingsd.com/20110610/cafepress-looks-to-public-markets-to-raise-80-million/#comments Fri, 10 Jun 2011 22:03:05 +0000 Tricia Duryee http://allthingsd.com/?p=85674 CafePress, which can print just about anything on a mug, poster or T-shirt, unfortuantely can’t print its own money.

It will have to ask the public markets for that. The San Mateo, Calif.-based company, founded in 1999, has filed to raise $80 million in an IPO.

While a number of companies are rumored to be contemplating filings after LinkedIn’s recent rally, this one wasn’t particularly high on the list. But it looks like CafePress has built a fairly sizable company, according to the document filed with the SEC today.

In 2010, it shipped six million products from a catalog of more than 325 million products, and as of March 31, it had more than 13 million members and more than two million shops.

Also in 2010, the company recorded a profit of $2.7 million on revenues of $128 million. In the most recent quarter, ended March 31, it lost $831,000 on revenues of $32 million. In the comparable quarter a year earlier, it lost $40,000 on revenues of $21.9 million.

However, revenues have not always been on the upward trajectory and were hit hard in 2009 by the recession. Because of that, however, the company adjusted its royalty and pricing structure, which allowed it to increase earnings before some non-cash items by 46 percent, even though revenues dropped by 14 percent.

It believes a key differentiator of its business model is its ability to produce customized merchandise profitably in small quantities.

It said the cash raised from the stock offering would go toward general corporate purposes, including working capital and capital expenditures. In addition, it could acquire or invest in another business.

Underwriters include J.P. Morgan, Cowen and Company and Jefferies.

]]> http://allthingsd.com/20110610/cafepress-looks-to-public-markets-to-raise-80-million/feed/ 0 http://allthingsd.com/20110429/still-not-convinced-the-cloud-is-a-risky-place-heres-some-scary-numbers-to-ponder/ http://allthingsd.com/20110429/still-not-convinced-the-cloud-is-a-risky-place-heres-some-scary-numbers-to-ponder/#comments Fri, 29 Apr 2011 15:15:56 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=5567 The myriad of computing service failures during the last week or so have had me thinking back to my conversation in March with Drew Bartkiewicz. We’ve had Amazon Web services fail and bring down much of the Web with it. Add to that the Playstation Network outage, which is still unresolved and is starting to get ugly in a legal and regulatory sense for Sony. And before that there was the breach at the email marketing company Epsilon.

It’s as though this week was tailor-made for Bartkiewicz (pictured), who argues that companies in the cloud business–and their customers, too–are in denial about risk. And by risk I mean not the technological possibility that a service may fail to work as advertised, but in the financial liability sense.

In Amazon’s case, there’s not been any real discussion of financial liability. Even though several companies effectively had to pause operations during the period of its outage last week, the only compensation they seem to be getting, at least for the moment, is a credit on their bill for the time that affected systems were offline and an apology. Apologies and billing credits won’t work for large companies. In a case like that, someone, somewhere has to be on the hook financially in the case of failure.

Handing your data over to someone is in a way comparable to handing goods over to a shipping company who promises to get it safely from one place to the other. Something bad can happen along the way, and often does. Trains derail, ships sink or get attacked by pirates. This is why the insurance industry exists. Yes, data is slightly different because it can be copied, but you get the idea.

Anyway, as if on cue, I found in my in-box today a report from Bartkiewicz’s company, CyberFactors, which specializes in risk analysis related to cloud services. It made for very interesting reading: It has estimated the financial costs associated with the Epsilon breach, and the findings should get your attention. The security breach and release of customer data at the email marketing provider has exposed the company to liabilities that could be as high as $225 million. According to CyberFactor’s research, as many as 75 other companies were involved and the total number of affected email addresses may be as high as 60 million.

Dealing with the repercussions of the breach–informing customers about it, making changes to marketing strategies, and so on–could eventually cost those at the affected companies, which included household names like Best Buy, J.P. Morgan Chase, Citibank, Walgreen’s and the Walt Disney Company, as much as $412 million, pushing the aggregate cost of the incident to $637 million. Think about that. The exposure of an email database could wind up costing more than half a billion dollars.

Yet even that isn’t the worst of it. Once you take into account down-the-line costs, such as fines, forensic audits, litigation and loss of business, the total cost could exceed $3 billion. Roughly half of the total costs to the affected companies will occur in the first year after the breach, and the rest will come in the second and third years. Security breaches have a way of costing long after the incident itself fades from the headlines. Cloud companies, CyberFactors argues, are going to have to start thinking more like banks, insurance companies and hedge funds. The cloud is going to have to grow up.

]]> http://allthingsd.com/20110429/still-not-convinced-the-cloud-is-a-risky-place-heres-some-scary-numbers-to-ponder/feed/ 8 http://allthingsd.com/20110418/apple-earnings-expect-another-barn-burner/ http://allthingsd.com/20110418/apple-earnings-expect-another-barn-burner/#comments Mon, 18 Apr 2011 13:30:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=60548 A last-minute forecast ahead of Apple’s second quarter earnings report Wednesday, and one that suggests it will be another barn burner.

With consensus estimates for the quarter hovering around $5.38 earnings-per-share on $23.26 billion in revenue, J.P. Morgan analyst Mark Moskowitz broke away from the pack, raising his projections on strong iPhone and Mac sales. Come Wednesday, he’s looking for Apple to post an EPS of $5.39, up from $5.21 he’d previously expected. And for revenue he’s looking at $24.42 billion, up from an earlier prediction of $23.83 billion. 

Why the 11th hour increase? Though Moskowitz dropped his quarterly estimate for the iPad 2 to 5.4 million from 6 million citing a “temporary stall-out” in shipments, he raised his iPhone projection to 18.4 million from 16.6 million on continuing sales momentum.

“Our research inputs indicate that iPhone shipments were stronger than expected,” Moskowitz says. “The Verizon launch helped, in addition to broader channel fill related to the GSM model. While investors have been concerned over a quicker plateau effect in the Verizon iPhone demand picture, we think that the quarterly run rate still can be 2 million units or higher. We do not believe sales momentum eased as much as investors have feared exiting the quarter.”

]]> http://allthingsd.com/20110418/apple-earnings-expect-another-barn-burner/feed/ 7 http://allthingsd.com/20110210/analysts-dub-hp-touchpad-a-legitimate-contender-for-second-place/ http://allthingsd.com/20110210/analysts-dub-hp-touchpad-a-legitimate-contender-for-second-place/#comments Thu, 10 Feb 2011 21:51:35 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=57612 It might lack a firm launch date and hard pricing details, and its application and content ecosystem might need further work, but Hewlett-Packard’s forthcoming TouchPad looks like it’s got a real shot at becoming the frontrunner in the massing horde of tablet hopefuls trailing Apple’s iPad.

Certainly the hardware and OS seem formidable enough to at least differentiate the device in an increasingly crowded market. And if HP’s integration story proves to be as good in practice as it sounded on stage in San Francisco yesterday (printers, phones, PCs and tablets all connected via webOS), the TouchPad could mount a decent challenge to the iPad–even if it doesn’t arrive at market until after the debut of the iPad 2.

Though he feels the summer ship date is just too late, Barclays analyst Ben Reitzes was impressed by the TouchPad’s hardware and OS. “[The TouchPad] appears to have very good software and syncing capabilities (HP Synergy feature) and some promising features,” he said in a client note today. “Also we point out that HP is clearly still investing not just in tablets but its smartphone business, which provides a good link between products for the future. Along with a nice OS, we believe that HP’s channel strength, link to its printing franchise, and overall brand strength could enable it to be one of the few relevant tablet players far behind Apple over the long-term.”

J.P. Morgan’s Mark Moskowitz had good things to say as well. “Our initial take on the TouchPad: better than expected,” he said. “Beyond Apple’s iPad, we previously had not been impressed with the other tablet entrants. HP’s TouchPad moderately changes this view.”

Interstingly, Moskowitz doesn’t seem quite as concerned about the device’s launch date. His feeling is that with the TouchPad, HP isn’t taking on Apple as much as it is the conga line of vendors chasing it. “For HP,” he said, “we believe the initial mission is to capture meaningful share among the non-iPad tablets, i.e., Android and Windows-based devices.”

Which is an interesting way of looking at the company’s strategy. Perhaps HP isn’t trying to out iPad the iPad–it’s trying to out iPad the iPad’s imitators, a far less daunting task.

]]> http://allthingsd.com/20110210/analysts-dub-hp-touchpad-a-legitimate-contender-for-second-place/feed/ 1 http://allthingsd.com/20110207/hps-webos-app-ecosystem-is-uncertain-and-thats-a-good-thing/ http://allthingsd.com/20110207/hps-webos-app-ecosystem-is-uncertain-and-thats-a-good-thing/#comments Mon, 07 Feb 2011 23:01:23 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=57318 Hewlet-Packard CEO Léo Apotheker says he doesn’t think the company has been telling its story as well as it could have over the past few years. On Wednesday, he’ll have his first chance to begin retelling it when HP’s Palm division holds an invitation-only event in San Francisco, at which it’s expected to introduce its long-rumored webOS tablet. This will be our first look at HP’s new ecosystem–smartphones, connected devices, apps and the OS that ties them all together–and likely be the beginning of a slow untethering from Microsoft’s Windows OS. And if Palm has done it right, webOS could finally become a viable challenger to iOS and Android–particularly the latter, which has had a mixed reception in the tablet market. But that means coming to market with not just a compelling tablet OS and hardware, but a burgeoning applications and content ecosystem–something not easily achieved. As J.P. Morgan analyst Mark Moskowitz wrote today, the ubiquity of HP’s related app ecosystem is uncertain. Whatever hardware the company rolls out on Wednesday needs to spur developers to embrace webOS. “Otherwise,” said Moskowitz, “there is risk that HP introduces a suitable device with a strong operating system, only to be deficient in attracting end users’ ‘eyeballs’ because of a weak applications and content ecosystem.”

The caveat here is that HP’s new tablet (or tablets) presents developers with an enormous opportunity precisely because its app ecosystem is uncertain. It’s going to be a lot easier to score a hit there than it is in Apple’s App Store, where developers must compete for users’ attention with hundreds of thousands of apps. And if you do score a hit there, it might even set the stage for you to translate that success to larger mobile platforms that are generally tougher to break into.

]]> http://allthingsd.com/20110207/hps-webos-app-ecosystem-is-uncertain-and-thats-a-good-thing/feed/ 7 http://allthingsd.com/20110118/apple-shares-down-but-for-how-long/ http://allthingsd.com/20110118/apple-shares-down-but-for-how-long/#comments Tue, 18 Jan 2011 16:57:22 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=55892 No big surprise here: Apple’s stock is slipping this morning following news that CEO Steve Jobs is taking another medical leave of absence. The company’s shares dropped some 6.5 percent this morning as the market mulled Jobs’s health issues and the potential timing of his return to the company. But how long they stay that way is up for debate. Consensus seems to be they’ll come under short-term pressure and then gradually resume trading on results. Fueling that view, Apple’s history as an innovator and the blowout quarter it’s expected to report this afternoon.

“Apple’s stock could face headwinds for several weeks as the media feeds on a yet-to-be-determined mix of speculation and disclosures about Jobs’ future role at Apple,” Oppenheimer analyst Yair Reiner said in a note to clients today. “At the same time, Apple’s investors will theorize and worry about what Jobs’ status will mean for future innovation at Apple. But this worry stage will likely run out of fuel relatively quickly, because convincing evidence of how Jobs’ presence or absence is impacting Apple’s fundamentals won’t present itself for years. Lacking evidence, investors will shortly go back to trading AAPL’s stock based on measurable fundamental performance.”

J.P. Morgan’s Mark Moskowitz was similarly optimistic. “While not knowing the details behind the current medical leave, we point out that Mr. Jobs has demonstrated a great resolve to improve his health previously, emboldened by the attitude and philosophy that helped him lead Apple’s remarkable rise over the past decade,” he writes. “In our view, Mr. Jobs and his team have made Apple become the primal force in shaping consumers’ technology-driven ‘way of life.’ While the competition is increasing in the areas of smartphones and tablets, we do not expect Apple’s technology and user experience leadership to fade.”

PREVIOUSLY

• Steve Jobs’s Finest Product–Apple–Won’t Break Down
• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t

]]> http://allthingsd.com/20110118/apple-shares-down-but-for-how-long/feed/ 0 http://allthingsd.com/20110111/analysts-go-out-on-limb-predict-verizon-iphone-will-be-big-for-apple/ http://allthingsd.com/20110111/analysts-go-out-on-limb-predict-verizon-iphone-will-be-big-for-apple/#comments Tue, 11 Jan 2011 19:41:57 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=55594 Verizon’s announcement of the forthcoming debut of Apple’s iPhone on its network this morning was met with a flurry of analyst notes all saying exactly the same thing: 2011 is going to be a very, very strong year for the iPhone.

After all, the CDMA iPhone Apple’s built for Verizon promises to expand the company’s addressable market domestically and abroad. The device isn’t exclusive to Verizon, which means Apple’s almost certainly going to pursue additional partnerships with CDMA carries in other parts of the world– China Telecom and SK Telecom, for example.

“We see this as the single biggest lever Apple has to pull in calendar 2011,” said Piper Jaffray analyst Gene Munster, who raised his iPhone unit estimates by 2.5 million because of the Verizon deal.

JP Morgan analyst Mark Moskowitz took a similar view, suggesting that the Verizon iPhone could boost Apple’s EPS by at least $1.25 per annum. “For Apple, we believe that this new carrier relationship will be a major catalyst for U.S.-related iPhone sales over the next 18-24 months,” he wrote. “In our view, Verizon’s wireless network offers a higher quality user experience compared to AT&T’s. We expect that this dynamic will drive a significant numbers of subscribers to switch to Verizon, in addition to the adoption rate of the iPhone by existing Verizon subscribers.”

At Standard & Poor’s, Clyde Montevirgen wrote that the deal more than doubles Apple’s U.S. market opportunity and said he expects incremental unit sales of 7 million via Verizon in calendar 2011.

UBS analyst Maynard Um issued this bullish call: “Apple has set itself up for a solid year of iPhone sales. Today’s agreement with Verizon Wireless should provide additional momentum to already strong iPhone unit growth. We also expect the company to launch the iPhone 5 this summer which would serve as another catalyst for this product segment. We currently expect AAPL to ship 67.3mn iPhone units in CY11.”

And finally, over at William Blair, analyst Brian Nugent offered a few observations about the Verizon iPhone’s effects on other industry players (beyond AT&T), specifically Research in Motion and Qualcomm. For RIM, he views it as a clear negative. “While dependence on Verizon has declined significantly in the last year, Verizon still accounts for roughly 10% of RIM’s sales (by our estimate),” he said. “An iPhone at Verizon will further pressure RIM’s market share and net subscriber additions in the United States, and could hurt its average selling prices and gross margin.”

But for Qualcomm, it’s a boon. “Although we view the introduction of the iPhone at Verizon as positive for Qualcomm (which we believe is the baseband provider in the iPhone), given that Qualcomm has over 95% of Verizon baseband share, today’s announcement may not be material to the company in the near term,” he said. “On a longer-term basis, we view today’s announcement as the beginning of a closer working relationship between Apple and Qualcomm that may potentially extend beyond the Verizon handset deal.”

PREVIOUSLY:

• AT&T: Verizon iPhone? Whatever.
• Verizon iPhone: What, AT&T Worry?
• Why Verizon’s iPhone Won’t Be So Bad for RIM
• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

]]> http://allthingsd.com/20110111/analysts-go-out-on-limb-predict-verizon-iphone-will-be-big-for-apple/feed/ 2 http://allthingsd.com/20101217/apple-to-dominate-tablet-market-until-2012-at-least/ http://allthingsd.com/20101217/apple-to-dominate-tablet-market-until-2012-at-least/#comments Fri, 17 Dec 2010 12:00:38 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=54501 In 2011 tablet revenues will rise to $24.9 billion, and by 2012 they’ll reach $34.1 billion. And Apple will claim the lion’s share of both, according to J.P. Morgan analyst Mark Moskowitz. Which isn’t all that surprising, really. As Moskowitz observes, while the concept of the tablet has been around for more than a decade now, it wasn’t established and mainstreamed until Apple introduced the iPad in January 2010. And Apple set the bar so high with the device that rivals are finding it tough to match it, let alone surpass it.

“Our assumption is that Apple’s dominance will remain firmly intact in the near to mid-term, but gradually, technology improvements and component cost declines will enable the laggards to offer ‘good enough’ solutions to loosen some of Apple’s grip,” Moskowitz says. “Of note, we expect a host of competitive tablets in 2H 2011, following the release of Android 3.0 this coming spring. The upgraded Android operating system should gradually improve the competitiveness relative to Apple’s iOS. Our conversations with industry contacts indicate that the current version of Android does not provide a computing rich experience, which is a requisite of tablets.”

But a gradual improvement in the competitiveness of Android tablets isn’t nearly enough to slow the iPad juggernaut. Presumably, a lot of those first-generation Android 3.0 tablets will arrive at market about the same time as the second generation of the iPad. That alone should allow Apple to maintain a comfortable lead, but the company has iOS and the iTunes content ecosystem working in its favor as well.

“With tablets, we view form factor, operating system robustness, and content ubiquity as critical demand enablers, and here, we expect Apple to dominate,” Moskowitz concludes. “Similar to the iPhone, the iPad reflects Apple’s ability to introduce unrivaled technology experiences for the customer. The key factor driving the separation from other tablet vendors stands to be Apple’s content ecosystem. With tablets, we think that offering a trove of applications, as is industry practice in smartphones, will not be enough. The ability of the user to access content, such as movies and TV shows, is increasingly important for tablet users. This dynamic is where Apple has fought hard to secure access to content, and we think it will take time for other vendors to establish a similar content ecosystem.”

]]> http://allthingsd.com/20101217/apple-to-dominate-tablet-market-until-2012-at-least/feed/ 0 http://allthingsd.com/20101027/kno-hires-fancy-cfo-as-it-preps-tablet-launch-and-possible-new-funding-search/ http://allthingsd.com/20101027/kno-hires-fancy-cfo-as-it-preps-tablet-launch-and-possible-new-funding-search/#comments Wed, 27 Oct 2010 18:00:51 +0000 Kara Swisher http://kara.allthingsd.com/?p=36347

Kno, the start-up attempting to make and market a student-aimed tablet and learning platform, has hired Stuart West as its new CFO.

West (pictured here) has worked at Yahoo, InfoSpace, TiVo and J.P. Morgan.

Kno is continuing to make key hires as it prepares to ship the product by the end of the year, after recently raising another $46 million in funding to add to a $10 million round.

Sources said that the Santa Clara, Calif., company could be back out raising even more money early next year.

Its current backers include prominent venture players like Andreessen Horowitz and First Round Capital, along with investors Mike Maples and Ron Conway.

]]> http://allthingsd.com/20101027/kno-hires-fancy-cfo-as-it-preps-tablet-launch-and-possible-new-funding-search/feed/ 1 http://allthingsd.com/20100721/ebay-beats-street/ http://allthingsd.com/20100721/ebay-beats-street/#comments Wed, 21 Jul 2010 21:00:04 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=45286 If eBay was hoping its second-quarter earnings would give it a respite from the beating its shares have been taking since it reported first-quarter earnings in April, it may well get it. After market close Wednesday, the company turned in a profit that exceeded analysts’ expectations.

EBay (EBAY) earned 40 cents a share in the second quarter, adjusted, on revenue that rose six percent to $2.22 billion. Analysts were expecting earnings of 38 cents a share on revenue of $2.16 billion. Good news since according to JP Morgan analyst Imran Khan, any “number below $2.15B would be a disappointment, while anything above $2.2B would be a positive.”

Once again, it is PayPal that seems to be driving eBay’s business. In a statement, the company said PayPal delivered a “record” second-quarter performance, adding a million new accounts each month during the quarter.

“We delivered strong second-quarter results, demonstrating the global strength and increasing diversity of our business,” said CEO John Donahoe. “PayPal is strong and getting stronger, building a robust and innovative global footprint serving all of e-commerce. And our eBay turnaround remains on track, with strong performance in Europe, significant changes in the U.S. and continued improvements to the buying and selling experience. We continue to focus on delivering strong financial results, managing a healthy balance sheet and making the necessary investments to compete, win and satisfy our customers.”

Looking ahead to the third quarter, eBay said it expects earnings of 26 cents to 28 cents a share on revenues of $2.13 billion to $2.18 billion.

Shares of the company, which closed down at the end of regular trading, are up more than three percent after hours.

]]> http://allthingsd.com/20100721/ebay-beats-street/feed/ 0 http://allthingsd.com/20100709/wall-street-yawns-at-googles-china-deal/ http://allthingsd.com/20100709/wall-street-yawns-at-googles-china-deal/#comments Fri, 09 Jul 2010 15:38:35 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=21442 “We view this news as a non-event,” writes J.P. Morgan analyst Dick Wei. Wall Street seems to agree, more or less; it has pushed Google shares up a modest two percent in a flat market. More from Wei: “We maintain our view that Google is likely to gradually lose market share in China, with an inferior search experience.”

]]> http://allthingsd.com/20100709/wall-street-yawns-at-googles-china-deal/feed/ 0 http://allthingsd.com/20100709/wall-street-yawns-at-googles-china-deal-2/ http://allthingsd.com/20100709/wall-street-yawns-at-googles-china-deal-2/#comments Fri, 09 Jul 2010 15:38:35 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=21442 “We view this news as a non-event,” writes J.P. Morgan analyst Dick Wei. Wall Street seems to agree, more or less; it has pushed Google shares up a modest two percent in a flat market. More from Wei: “We maintain our view that Google is likely to gradually lose market share in China, with an inferior search experience.”

]]> http://allthingsd.com/20100709/wall-street-yawns-at-googles-china-deal-2/feed/ 0 http://allthingsd.com/20100611/may-search-metrics-google-losing-share-or-gaining-it-depending-on-how-you-look-at-the-data/ http://allthingsd.com/20100611/may-search-metrics-google-losing-share-or-gaining-it-depending-on-how-you-look-at-the-data/#comments Fri, 11 Jun 2010 12:30:39 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=42351

Getting an accurate read on the tides of search market share these days is no easy feat given the interface changes being rolled out by the major players.

Consider comScore’s May search market report (see tables above; click to enlarge), which shows Microsoft’s Bing and Yahoo gaining share, ostensibly at Google’s expense. For the month, Yahoo gained 60 basis points for a share of 18.3 percent, and Bing 30 points for a share of 12.1 percent. Meanwhile, Google’s (GOOG) share declined 70 basis points to 63.7 percent.

While those numbers seem straightforward enough, they really aren’t, given some of the navigational ploys Yahoo (YHOO) and Microsoft (MSFT) have been using to boost their numbers. Slideshows and contextual search links have helped raise the share of both companies, but they need to be backed out of the data to get an accurate view of the sector, as J.P. Morgan (JPM) analyst Imran Khan explains.

“User interface changes continue to cloud the picture,” Khan said in a note to clients. “Google, Yahoo! and [Bing] all made notable changes in April and May, according to comScore. As such, numbers may not be directly comparable to past months. On a reported basis, Google lost ~70 bps of search share in May vs. April, while Yahoo! was the biggest gainer, up ~50 bps. Excluding the impact of all adjustments, Google gained ~30 bps of share, Yahoo! was down ~25 bps and Microsoft was flat.”

In other words, the numbers here do lie and will continue to do so until measurement outfits like comScore (SCOR) account for context-driven searches and slideshows. ComScore plans to do just that.

“[The] continued evolution of search and emerging innovations in how it is used to enhance user experience, calls for a thoughtful review of how we classify various types of searches, count them and report them,” Cameron Meierhoefer, comScore’s executive VP of analytics, wrote in a blog post released along with the company’s latest search stats.

“We want to ensure that we provide comprehensive and flexible measurement that meets the needs of the various constituencies in the digital marketplace,” Meierhoefer added. “As our thinking evolves, we will include relevant stakeholders in the discussion and clearly communicate our thinking and rationale to the marketplace.”

The timeline? “While we will maintain the current method through the end of the second quarter to avoid reporting disruptions, we will aim to implement proposed revisions in the third quarter, ideally starting with the release of July data in the first half of August.”

]]> http://allthingsd.com/20100611/may-search-metrics-google-losing-share-or-gaining-it-depending-on-how-you-look-at-the-data/feed/ 0 http://allthingsd.com/20100514/2010-could-be-the-year-of-the-display-ad-or-the-cable-tv-ad-take-your-pick/ http://allthingsd.com/20100514/2010-could-be-the-year-of-the-display-ad-or-the-cable-tv-ad-take-your-pick/#comments Fri, 14 May 2010 14:20:06 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19477 There are a whole lot of people–from scrappy start-ups to publishers to Google (GOOG)–betting that display advertising is finally going to start picking up on the Web.

So they’ll be heartened by this table, from a survey of ad buyers conducted by J.P. Morgan’s Imran Khan. It shows display ads picking up 1.5 percent of ad budgets this year (click to enlarge):

Note that comScore (SCOR) says display ad volume (but not overall revenue) jumped 15 percent last quarter, and it’s tempting to believe that this is finally the year when Web advertising really moves beyond search advertising.

Meanwhile, the people who are feeling most confident about their near-term future are the guys selling TV advertising. Broadcast TV is still losing share, but cable TV is up. And most buyers–74 percent–who do pay for spots say they’re spending more than last year.

]]> http://allthingsd.com/20100514/2010-could-be-the-year-of-the-display-ad-or-the-cable-tv-ad-take-your-pick/feed/ 0 http://allthingsd.com/20100330/why-amazon-can-thrive-even-if-the-ipad-eats-its-lunch/ http://allthingsd.com/20100330/why-amazon-can-thrive-even-if-the-ipad-eats-its-lunch/#comments Tue, 30 Mar 2010 12:56:31 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=17863 Amazon owns almost all of today’s e-book business. But by the time Apple’s iPad, the Nook from Barnes & Noble (BKS), and others finish chewing away at its market share, Jeff Bezos and company will end up with something like 30 percent of digital book business, says J.P. Morgan analyst Imran Khan.

And that will still be a very good business for Amazon (AMZN), Khan says. He figures that a smaller chunk of a much larger market will eventually generate $1 billion in incremental revenue for the e-commerce giant.

You can see his math and assumptions here (click to enlarge):

Khan’s point is part of a larger note making the bull case for Amazon shares, and he argues that his assumptions for the retailer’s e-book business are deliberately conservative.

That sounds right to me, though I’d add one caveat. Khan assumes that e-books will follow the path of music sales, which quickly moved over to digital following the introduction of mobile devices–specifically, Apple’s (AAPL) iPod. But there are several big differences between books and music, and the biggest one is that you don’t need a special device if you want to travel with books–they’re already mobile.

I know plenty of people who swear by their Kindles and tell me that they’re reading more than ever since they got the gadgets. And maybe they’re representative of the larger population. But if it turns out they’re merely very enthusiastic early adopters, we’ll need to rethink some of this math.

]]> http://allthingsd.com/20100330/why-amazon-can-thrive-even-if-the-ipad-eats-its-lunch/feed/ 0 http://allthingsd.com/20100113/how-much-is-google-really-giving-up-in-china-depends-who-you-ask/ http://allthingsd.com/20100113/how-much-is-google-really-giving-up-in-china-depends-who-you-ask/#comments Wed, 13 Jan 2010 16:12:10 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15072 How much money will Google leave on the table if it makes good on its threat to walk away from China?

Depends who you ask.

Last night JP Morgan (JPM) analyst Imran Khan estimated that Google (GOOG) might give up $600 million in 2010 revenue if it bails. Today, Citigroup’s (C) Mark Mahaney ballparks the number in the $300 million to $350 million range.

Both analysts agree with Google’s description of the revenue loss as “immaterial,” though.

For now, that is. The real worry, of course, is that if Google gives up on China now, it will forgo a huge business opportunity in the future.

So the real question–and one we won’t get an answer to for a bit: Does Google think it is still negotiating with China or has it already written off the world’s biggest population of Internet users?

]]> http://allthingsd.com/20100113/how-much-is-google-really-giving-up-in-china-depends-who-you-ask/feed/ 0 http://allthingsd.com/20100112/is-nbcs-jay-leno-disaster-good-news-for-time-warner/ http://allthingsd.com/20100112/is-nbcs-jay-leno-disaster-good-news-for-time-warner/#comments Tue, 12 Jan 2010 16:11:22 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15012 Here’s a take I hadn’t considered on NBC’s Jay Leno/Conan O’Brien debacle: Good news for Time Warner!

So says JP Morgan’s (JPM) Imran Khan. He predicts that Jeff Zucker’s screwup is good news for Jeff Bewkes since Time Warner makes a lot of “scripted programming,” and that’s what NBC will need to replace Leno at 10 pm.

The whole point of moving Leno to 10 pm, recall, was to save money on “scripted programming”–what you and I call “shows that aren’t reality shows.”

But it’s not as if NBC stopped running scripted shows altogether, and at max, the network is going to need an additional five hours a week. Khan says this will represent “incremental spending” for Time Warner (TWX), but it’s not as if NBC’s pressure to save on programming costs is going to go away. And even if the network buys all of five of those hours from Time Warner, it’s hard to see how that does much for a company that generated revenue of $6.3 billion last quarter (not counting AOL).

Khan also thinks the same logic means bad news for Disney (DIS) and News Corp.’s (NWS) Fox because increased demand for nonreality shows “could result in higher talent and production costs.”

Again, this seems like a stretch: It seems like the lesson to draw from all this isn’t that expensive programming is good, but that bad programming is bad.

And as ad dollars inevitably leach out from TV to the Web, the pressure on all the networks will be to keep their viewers’ eyeballs while spending less on content. The real winners will be the ones who figure out how to make good stuff cheaply.

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