As with previous rounds of predictions he has made — like for 2011 and 2012 — some of what he predicts already kind of makes sense if you’ve been paying attention to the way things are going, but will become more pronounced in the coming year. Others are a little more surprising.

1. “Carryalongs” Dominate Global Computer Markets
Anderson lumps notebooks, tablets and everything in between into a category he has labeled “carryalongs,” and he says they will take their place as the largest segment of computing devices. “Surface and slates and iPads and Kindle Fire and Nexus 10 and everything else that’s got a 7-inch screen plus or minus an inch or so, will be the biggest category of computing device.” Okay, then.

2. Intel: Long Live the King, the King Is Dead
Intel may still be the biggest supplier of chips to the world’s computing devices, but if you look at prediction number one, you know that Intel doesn’t yet play a significant role in the “carryalong” market outside of traditional notebooks. “Qualcomm and ARM are the new William and Kate,” Anderson says. Intel is primarily a supplier to the world’s server vendors. With CEO Paul Otellini retiring in May, the one way out of its current troubles will be to name a new CEO with what Anderson says are “real tech chops.” Otellini, he says, “marked the first time a marketing guy got the CEO job at Intel. Before that they were all engineers, except Craig Barrett who was an operating guy.” Intel, he says, “has lost the consumer stuff, the handheld stuff, the slate and tablet stuff. All it has left are servers. It has lost the mastery that it had.”

3. Net TV Dominates
A majority of U.S.-based homes will have Internet-connected TVs and related products like AppleTV, Roku boxes and so on. This will fundamentally change the production of content in new and interesting ways, and the result will be a lot more cheaper content. “This is going to become what TV is, and the result is that the cable and satellite companies are going to have a tough time. With the exception of sports, this is the end of cable as we know it.”

4. The LTE vs. Fiber Battle Creates Regional Revolutions in Broadband
In certain regions where the only broadband Internet option is a DSL line, LTE wireless devices and services will become the standard replacement, where LTE service is available. “In most cases you’ll be paying more, but you’ll also be getting more. This is a really interesting flip in some regions. It will be interesting to see this fight because it has a lot to do with what’s in the ground.” It will mark the start of a fight between LTE and fiber optic technology that will take a decade to resolve and what Anderson says is a “real revolution” in broadband pricing and provision.

5. Google Gets Its Mojo Back.
Google’s efforts in email, video, smartphones, maps and driverless cars have in Anderson’s opinion opened up new long-term paths for expansion at Google. Having killed off several products and services that weren’t seen as core to its operations, Google will in 2013 look a lot more focused and powerful when compared to Facebook, Apple and Microsoft, he says. “Google has turned an important corner where after all the experimentation, it has created a number of true businesses where they have a foothold and terrific products, and there are more to come.”

6. The Driverless Car Becomes a Serious and Competitive Global Project
And speaking of Google’s driverless car, that’s going to become a thing over the long term. Volvo plans to become a player. It’s not just a curiosity, it will in the future become a real market, he says.

7. eBooks Are the books
Total ebook sales in dollars will beat adult paperback sales in 2013, Anderson says, and will continue on a growth trajectory toward dominating the entire book-publishing business.

8. Enterprise IT Struggles to Achieve Very Modest Gains
“Big Data” may be a big marketing cry that keeps people talking about enterprise IT, but combined sales of hardware, software and other enterprise tech will collectively grow very little on a global basis. “The year-to-year spending increase will be very small, maybe only 1 to 2 percent, even though the companies doing the spending are sitting on trillions in cash.” One exception: Security.

9. Hacktivists Rule.
Hacktivists like Anonymous and those like them will take on an increasingly important and, Anderson argues, permanent role in forcing political entities to become more transparent. They’ll cease being annoying and actually become a longer-term part of the political and cultural landscape. The result? After struggling to keep their secrets, governments will be forced, in time, Anderson says, to become more open.

10. Supply Chain Security Becomes a Major Factor in Global Technology Purchases
“Maybe all that outsourcing wasn’t such a good idea after all” will be the thinking of many CEOs who’ve spent the last decade or more arguing that lower production costs brought about by inexpensive labor costs in China, Taiwan and other countries will cause a big re-think over security concerns. Academic researchers in the U.K. claim to have found what many people have only silently worried might be possible: An unpatchable backdoor on a military grade encryption chip built in a Taiwanese fab. Companies in what he calls “inventing nations,” exasperated by the constant theft of intellectual property that is often traced to China, will grow increasingly uneasy at their relationship with that country and look for ways to bring more production back to their own shores. A new phrase — “clean supply chains” — will gain currency in tech manufacturing circles and will amount to an admission across many industries, not just tech, that today’s supply chain arrangements are “virtually all compromised,” Anderson says. This will lead to talk of ways to relocate manufacturing operations back in the U.S. and other countries. It won’t be easy — China will retaliate against companies that say anything like this publicly. “You almost have to decide to do what Google did and all but leave the country.” Apple is already doing it. Others, he said, will follow.

Mr. Kaku, who is 65, enjoys making predictions. In his latest book, “Physics of the Future,” which Anchor released in paperback in February, he predicts driverless cars by 2020 and synthetic organs by 2030. If his forecasts sound strange, Mr. Kaku understands the skepticism. “If you could meet your grandkids as elderly citizens in the year 2100,” he offers, “you would view them as being, basically, Greek gods.” Nonetheless, he says, “that’s where we’re headed” — and he worries that the U.S. will fall behind in this technological onrush.

Read the rest of this post on the original site »

Electronic Arts is predicting that the New York Giants will defeat the New England Patriots in the Super Bowl, by a single field goal.

For the past several years, the videogame publisher has been using its hit title Madden NFL to simulate the outcome of the Super Bowl — and in six out of the past eight matchups, it has guessed correctly.

But unlike the camel in the New Jersey zoo that has picked the winner of five of the last six Super Bowls, EA breaks down the score quarter by quarter.

EA simulates the Super Bowl by using artificial intelligence and real data from each team. It even includes variables such as injuries. The simulation is powered by Madden NFL and Xbox 360, the official console sponsor of the NFL.

EA replays the game’s highlights in a video, including Giants quarterback Eli Manning being named MVP for completing 25 of 39 passes with two touchdowns, and the Patriots’ Tom Brady throwing for 327 yards and three touchdowns.

Spoiler Alert: To win the game, Giants kicker Lawrence Tynes will make a 40-yard field goal, with the final score 27-24.

One example is the annual tech prediction by analyst Mark Anderson, which I wrote about last week. Another is IBM’s recurring “Five in Five” series, wherein Big Blue looks at the unfolding technology landscape and predicts what innovations are still just this side of “gee whiz” today, but will be commonplace within five years.

Think back to what we were doing in 2006, and how far things have come in that short period of time in terms of consumer and enterprise technology. The iPhone existed only as an Apple prototype. Facebook had just opened itself up to the population at large, beyond just college and university students. Twitter was just getting started. And a tablet was a not-terribly-popular PC design.

As you’ll see, some of these five predictions aren’t exactly mind-blowing, especially if you pay attention to general technology trends. Over the past decade, you’ve probably already heard predictions saying that computer passwords will go away and be replaced by biometrics of some kind, whether in the form of fingerprints or voice authorization or some part of your eyeball. Also: Junk mail I actually want? That one I’ll believe when I see it. However, I really like the “think to call” idea, which sounds like a super speed-dial.

Anyhow, here are IBM’s predictions for stuff we’ll see by 2016, and a video explaining them in a little more detail:

You will make your own energy: Anything that moves has the potential to create energy. Your running shoes, your bicycle and even the water flowing through your pipes can create energy. Advances in renewable energy technology will allow individuals and scientists to collect this energy and use it to help power our homes, offices and cities.

You will not need a password: Your biological makeup is the key to your individual identity, and soon, it will become the key to safeguarding it. Each person’s unique biometric data such as facial definitions, retinol scans and voice files will be composited through software to build your DNA-unique online password. You will be able to log into your mobile phone or have access to an ATM machine by simply speaking your name or looking into a camera.

Mind reading is no longer science fiction: Scientists are researching how to link your brain to your devices, such as a computer or a smartphone, so you just need to think about calling someone and it happens. Scientists have designed headsets with advanced sensors to read electrical brain activity that can recognize facial expressions, excitement and concentration levels, and thoughts of a person without them physically doing anything.

The digital divide will cease to exist: In five years, the gap between information haves and have-nots will narrow considerably due to advances in mobile technology. Growing communities will be able to use mobile technology to provide access to essential information and better serve people with new solutions such as mobile commerce and remote healthcare.

Junk mail will become priority mail: Think about how often we’re flooded with advertisements we consider to be irrelevant or unwanted — it doesn’t have to be that way anymore. In five years, unsolicited advertisements may feel so personalized and relevant it may seem spam is dead. Systems will be able to filter and find only the data that’s important and relevant to you and will bring you the information without you having to ask for it.

Piper Jaffray analyst Gene Munster has modeled Apple’s performance for the 2013 calendar year and come up with some very large numbers indeed: Earnings per share of $40.50 on $164 billion in revenue.

That’s about 10 percent above Street consensus on EPS and 8 percent over consensus on revenue. But Munster has his reasons — specifically soaring demand for the iPhone and iPad. He figures that unit growth rates for both devices will be so strong over the next two years that Apple will end up selling 143 million iPhones and 68 million iPads in 2013. What’s more, it will sell them at sales prices far above the industry average for competing devices.

“We believe the markets for smartphones and tablets are big enough to support this growth, even if Apple’s ASP is significantly higher than its competition,” said Munster. “Consumers have demonstrated their willingness to pay up for the best technology, and we expect this trend to continue.”

And if it does, the iPhone and iPad will account for 49 percent and 21 percent of Apple’s revenue for calendar 2013 by Munster’s calculations.

ITG Investment Research tracked point-of-sale data from nearly 6,000 wireless stores in the U.S. from the Galaxy Tab’s November debut through Jan. 15 and found the device to have an unusually high return rate. According to its estimates, cumulative return rates for the Galaxy Tab through December of 2010 were about 13 percent. Worse, that percentage is growing as holiday purchases are returned. ITG figures cumulative Galaxy Tab return rates through January 15 were 16 percent. Ugly, considering the return rate for the iPad at Verizon since its debut on the carrier is just 2 percent.

But perhaps to be expected given Google’s own admonishments about Android Froyo’s tablet suitability. As Hugo Barra, director of products for mobile at Google, said last fall: Froyo is not optimised for use on tablets. If you want Android market on that platform, the apps just wouldn’t run, [Froyo] is just not designed for that form factor.”

[Image Credit: David Lyle/Wooster Collective]

“As you heard, our sell-in was quite aggressive and this first quarterly result was quite, you know, fourth-quarter unit [figure] was around two million,” she said during the company’s recent earnings call. “Then, in terms of sell-out, we also believe it was quite smooth*. We believe, as the introduction of new device, it was required to have consumers invest in the device. So therefore, even though sell-out wasn’t as fast as we expected, we still believe sell-out was quite okay.”

A bit of a paper tiger, then, that two million Galaxy Tabs sold in three months. And the true number? Well, Samsung isn’t even willing to disclose that yet. Said Young-hee, “As you know, the tablet is relatively new and we need to see how the market develops before we give any firm numbers.”

Another reason to look askance at recent predictions that Apple will cede a significant portion of the tablet market to Android rivals in the years ahead.

*It was originally reported that Youg-hee described Galaxy Tab sales as “quite small.” She actually described them as “quite smooth,” as you can hear here.

This research paper was produced by two social-computing researchers at HP Labs: Bernardo Huberman and Sitaram Asur. It’s titled “Predicting the Future With Social Media” [PDF here], and it looks at Twitter as a means of predicting the box-office success of newly release films based on the number of people tweeting about them and the sentiments contained in those tweets.

They argued that Twitter was a far better predictor of box-office success than the motion picture industry’s “tracking” reports that studios have used for years. In fact, the two researchers said at the time that Twitter could predict with nearly 98 percent accuracy whether a movie would be a hit or a flop in its first weekend of release. For the study, they mined nearly three million tweets referring to 24 different movies over a time period of three months.

Fflick does some sentiment analysis of its own, but uses that data to help Twitter users decide whether they are going to buy a ticket to a movie based on whether their Twitter friends liked it. Could it be that Google wants to mine that same sentiment data to help movie studios predict box-office sales?

As I said, this is only a theory–one that I admit I’m stretching to the max. I can’t find any connection between the two researchers and Ffflick’s four founders, or its investors, which includes the Founders Fund, though there needn’t be one for my theory to be close to the mark. Fflick was started in August of last year, about five months after the paper was published. And the paper itself was widely covered at the time, in particular by the Los Angeles Times.

Since neither Google nor Fflick is commenting on this deal, which is supposedly still pending, I thought it was worth suggesting as a possible motivation on Google’s part.

Electronista thinks it may have something to do with forecasting popularity on Google’s forthcoming YouTube movie project and the need to predict.

I did check in with the paper’s principal author, Huberman, by email to ask what he thought. His reply: “Sentiment analysis of tweets is great for marketing studies and Google wants to go there since they have search going on with Twitter.” Time will tell if this is what Google has on its mind.

Near the close of regular trading on Monday, Apple’s shares were trading at $329.43, up $6.87 or more than 2 percent, giving the company a market value of roughly $302 billion.

Meanwhile, Piper Jaffray analyst Gene Munster issued his forecast of what’s coming for the new year, including popular predictions of a Verizon iPhone and new iPad, followed later in the year by an update to the iPhone as well as new Mac lines. As for the Verizon iPhone, it’s not a new prediction, with Munster having already guesstimated that Verizon will ship 9 million iPhones next year.

Munster also sees improved cloud services from Apple as likely, as well as the possibility that we will see iPads offered with a subsidy from carriers, presumably in exchange for customers agreeing to a long-term contract. Currently, iPad owners don’t get a discount (in fact the 3G version costs $130 more), but they also don’t agree to pay each month for the wireless service.

The “What will Apple do” question is likely to preoccupy more than just Wall Street. Expect many of the product introductions at this week’s Consumer Electronics Show to be examined through the lens of how they will compete with both current and expected products from Apple, which is skipping the show as usual.

Longer term, Munster said he still expects Apple may expand its television “hobby” and start making its own line of TVs.

In a survey among mobile executives, the most likely category to break-out this year is mobile payments. In second is the closely related field of mobile commerce. (Mobile advertising and mobile coupons is third and fourth, respectively.)

What’s more, this group of insiders believes that the big winners within the category will be the financial guys: Visa and MasterCard, which garnered more than 30 percent of the votes.

After the large credit card companies, respondents voted for wireless operators, which are working together to build a mobile payments platform called Isis.

Further down the list is Google, PayPal and the handset makers. In sixth, execs placed the well-funded start-ups, such as Boku and Zong, which allow users to make purchases via their mobile phone bill, and Facebook ranked last with less than 5 percent of the votes.

The two companies noticeably missing were Apple, which has a healthy payments platform via iTunes, and Amazon, which also offers developers a mobile payments platform.

So far, the mobile payments industry in the U.S. mostly consists of buying-and-selling digital goods, such as music, or virtual goods in Facebook games. The industry has failed to break into physical goods because of the significant revenue splits demanded by all the parties involved. The cuts make it financially impossible to sell something that doesn’t have ridiculously high profit margins.

But that’s also expected to change, according to more than 30 percent of the respondents, who expect “selling of non-digital goods on mobile” to gain traction in 2011.

The survey was conducted by Chetan Sharma Consulting, which received responses from 225 executives. Thirty-three percent of participants were C-level executives, and 55 percent were from North America.

Another figure that points to mobile’s increasing influence on the retail industry was in response to the question: “Which enterprise segment will mobile impact the most?” The top answer–by far, with nearly half of the votes–was retail. Other answers included: Sales (less than 20 percent) and health (less than 20 percent).

Mopay Managing Director Kolja Reiss told eMoney that 2010 was an instrumental year for mobile payments as it became a major focus for wireless operators. Mopay, a mobile payments provider, recently expanded to the U.S. from Europe after opening an office in Palo Alto, Calif., this year. “I think what has changed is that all the [U.S.] carriers now have mobile payment specialists in house. A couple of years ago, they didn’t know how to treat it or how to maneuver their way around. They have dedicated people and there’s tons of initiatives that are based on those people.”

At the minimum, this year should see heated competition, with many players launching alternative products in the space. “We aren’t alone,” Reiss said, “which makes it even more interesting. There’s a race going on right now on who has the best product.”

Amdocs-owned OpenMarket, which has been handling payments for ringtones and other mobile content for years, is also forecasting that this year mobile devices will increasingly become an alternative to credit cards, especially for purchases under $25. Jay Emmet, general manager of OpenMarket: “Operators appetite for non-traditional services is increasing. They have competitive advantages, that a Google doesn’t have. They have a billing relationship with you.”

The rise of Android, he said, will lead to a shift among developers, he said. “People are going to have to think of iPhone as not necessarily the first platform anymore and many developers are going to start thinking of Android (first).”

It’s going to take a bit longer for Android on the tablet side, he said, where fragmentation is a bigger issue, with hardware makers building products around different versions of the operating system.

“Frankly I think a lot of the tablet makers are just a cycle behind,” he said.

As for the other big mobile players, such as Nokia, RIM and Microsoft, Wong said, “The jury is really out on whether any of those three are going to succeed.”

Wong also predicted Facebook will play a bigger role on the phone, shifting from being an app that is on a lot of phones to being a true mobile platform, similar to the shift it has made on the desktop.

Here is the interview video:

]]> http://allthingsd.com/20101229/accel-partners-rich-wong-predicts-an-android-new-year/feed/ 0 http://allthingsd.com/20101228/mcafee-releases-annual-top-scary-reasons-to-buy-our-software-list/ http://allthingsd.com/20101228/mcafee-releases-annual-top-scary-reasons-to-buy-our-software-list/#comments Tue, 28 Dec 2010 19:33:16 +0000 Voices http://voices.allthingsd.com/?p=34421 Security outfit McAfee today unveiled its 2011 Threat Predictions report, and sure enough, the biggest threats are aimed at “2010′s most buzzed about platforms and services, including Google’s Android, Apple’s iPhone, foursquare, Google TV and the Mac OS X platform, which are all expected to become major targets for cybercriminals.” Another in a long list of non-shocking (but still sobering) predictions: “Politically motivated attacks will be on the rise, as more groups are expected to repeat the WikiLeaks paradigm.” The report’s bottom line: Anything you do online carries risks. Which is undeniably true.

]]> http://allthingsd.com/20101228/mcafee-releases-annual-top-scary-reasons-to-buy-our-software-list/feed/ 0 http://allthingsd.com/20101104/google-instant-comes-to-mobile/ http://allthingsd.com/20101104/google-instant-comes-to-mobile/#comments Thu, 04 Nov 2010 22:40:40 +0000 Beth Callaghan http://voices.allthingsd.com/?p=32082 Following up the mobile sneak peek it offered during the launch of Google Instant for the desktop, Google today announced the beta version of the utility for iOS 4 and Android 2.2. Like its desktop counterpart, it offers predictions and search results as the user types search terms, but given the keyboard limitations and load times on mobile devices, it promises to be exponentially more useful.

]]> http://allthingsd.com/20101104/google-instant-comes-to-mobile/feed/ 0 http://allthingsd.com/20100330/ipad-expectations-%e2%80%9cover-zealous%e2%80%9d/ http://allthingsd.com/20100330/ipad-expectations-%e2%80%9cover-zealous%e2%80%9d/#comments Tue, 30 Mar 2010 15:22:06 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=37687 The iPad’s debut this Saturday will be a milestone for Apple, but it’s not going to do much to change the company’s overall financial picture anytime soon. That’s the word from Bernstein analyst Toni Sacconaghi, who worries that investors drunk on Apple’s “magical and revolutionary” Kool-Aid might have overzealous expectations for the tablet.

Which is not to say that Sacconaghi disputes the iPad’s potential as a market-defining device. He just wonders if there aren’t a bit too many unknowns at present to make hard and fast predictions about its sales trajectory.

“What will international pricing be?” Sacconaghi asks in a research note issued this morning. “What sort of media content will be available, and how quickly? How rapidly will Apple increase distribution beyond the 10 countries announced so far, compared to the iPhone which is available in 89 countries? How prevalent will non-Apple distribution be?”

Reasonable questions. And without answers to them, Sacconaghi is playing it safe with his sales estimates. He expects Apple (AAPL) to sell between 300,000 and 400,000 iPads over launch weekend–including pre-sales. But he figures the device will sell five million in its first full year at market and 6.8 million in fiscal year 2011.

“We note that the initial iPad launch will be a US only launch and will not include 3G models; we suspect that total (including pre-sales) first weekend sales will be slightly higher than the original iPhone’s first weekend (270K), given the iPhone had a similar price, and was US exclusive (although it did not offer pre-orders),” Sacconaghi writes.

“Our analysis suggests that iPhone sales run rates have fallen significantly (i.e., by a factor of 4x – 9x) following launch weekends; we think a drop-off in sales at the high end of this range is likely appropriate for the iPad, given that pre-sales will have boosted first weekend sales. Such a drop-off in iPad sales from our launch weekend forecast would result in unit sales for year 1 of about 5 million units in-line with our estimates.”

That might not be an “over-zealous” estimate in Sacconaghi’s eyes, but it’s certainly a bullish one. Still, the analyst concludes that the iPad’s near term financial implications for Apple may not prove to be as magical as investors hope.

“We believe that while the iPad may evolve meaningfully over time, we expect its impact on Apple’s earnings to be minimal during FY 10,” he says. “In the immediate term, iPad expectations appear over-zealous, which could provide a relative short-term disappointment for investors.”

FURTHER READING:

Launch Day iPads Sold Out

iPad Available at “Most Best Buy Stores” This Saturday

Apple Grabs iPad Trademark From Fujitsu

Apple Now Accepting iPad App Submissions

Early Supplies of iPad Accessories Dwindling?

Initial iPad Demand Greater Than Initial iPhone Demand

iPad TV?

Apple’s Tablet: Read Different?

Rumored Apple Netbook Actually an E-book?

Coming Soon From Apple: Big Touch?

iTablet: Apple’s Killer App for Higher Ed

COMPLETE IPAD COVERAGE

]]> http://allthingsd.com/20100330/ipad-expectations-%e2%80%9cover-zealous%e2%80%9d/feed/ 0 http://allthingsd.com/20100128/more-optimism-for-big-media-and-big-ad-budgets/ http://allthingsd.com/20100128/more-optimism-for-big-media-and-big-ad-budgets/#comments Thu, 28 Jan 2010 11:00:01 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15632 Things looked positively awful a year ago in medialand. So when prognosticators say things are improving, it’s important to remember that it’s all relative.

Still, if you’re among those who, say, make their living working for an ad-supported media outlet, it sure is nice to see this sort of thing: Barclays analyst Anthony DiClemente jacking up his 2010 U.S. ad market estimates from no growth to a 3.5 percent bump.

That’s a reflection of an “incrementally buoyant picture,” DiClemente says in perfect Wall Street deadpan. Why the muted optimism? “We believe corporate America must and will return to market its products and services.”

Interestingly, DiClemente sees the largest increase coming not from Web advertising, but traditional TV ads, pushed up in part because of the Winter Olympics and next fall’s election season. Last week’s Supreme Court decision didn’t hurt either.

That helps explain why DiClemente has also raised his price targets for Viacom (VIA) and News Corp. (NWS) (which owns this Web site). Click on the table below to see a full breakdown of his predictions:

]]> http://allthingsd.com/20100128/more-optimism-for-big-media-and-big-ad-budgets/feed/ 0 http://allthingsd.com/20091208/sprint-undervalued/ http://allthingsd.com/20091208/sprint-undervalued/#comments Tue, 08 Dec 2009 17:05:38 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=30446 If Sprint, as Barron’s recently claimed, deserves more respect on Wall Street, it’s not going to find it at Pali Research, which clearly does not see the same 50 percent upside potential in the company’s shares.

In a note to investors this morning, Pali analyst Walter Piecyk says he’s not buying predictions about Sprint (S) returning to growth in 2010. Sure, the company is improving post-paid subscriber losses, says Piecyk, but not as quickly as it needs to. And its prepaid business, which already faces a fair bit of competition, will be confronted with even more competition next year.

“Over the past six months our concerns have been rising over the slow pace of change at Sprint and what we view as lost opportunities for growth, but we maintained our Buy rating due to the low valuation on the stock and the depressed expectations of investors,” Piecyk writes.

“Those concerns increased in recent months as the pre-paid business, which Sprint has been accessing for growth, became more competitive and Verizon began executing on a more open device strategy,” the analyst adds. “In the past few weeks, investors have become more optimistic about positive post-paid signs early in Q4 and Sprint’s prospects of even stronger pre-paid results in 2010, in the face of increasing competition.”

In contrast, Piecyk notes that “We are less confident about those trends and as we model out a more competitive market in 2010 for all our companies it becomes evident to us that Sprint will be challenged to stabilize EBITDA. Faced with negative catalysts in the months ahead and the challenge of appropriately valuing a company whose EBITDA is in perpetual decline, we believe now is the right time to downgrade the stock to Neutral.”

Wall Street, then, isn’t underestimating Sprint’s prospects for 2010. It’s overestimating them–or at least it certainly was yesterday.

“For 2010, we expect post-paid losses to be pared by 35% to 2.3 million subs lost compared to our prior estimate of less than 2 million subs lost in that year,” Piecyk concludes. “While pre-paid net adds might offset the losses or even top post-paid losses in Q4 we expect the total customer base to decline by 700,000 in 2010.”

]]> http://allthingsd.com/20091208/sprint-undervalued/feed/ 0 http://allthingsd.com/20090423/netflix-delivers-revenue-on-target-earnings-way-above/ http://allthingsd.com/20090423/netflix-delivers-revenue-on-target-earnings-way-above/#comments Thu, 23 Apr 2009 20:14:12 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=6629 Netflix has been one of the rare winners during the recession/depression: Customers are flocking to the movie rental service, even while competitor Blockbuster (BBI) struggles, and investors love the stock. The company turned in a gangbusters performance at the end of last year, and expectations were very high for today’s Q1 earnings report.

At first glance, it looks like the company beat them. Netflix (NFLX) posted earnings of 37 cents a share on revenue of $394.1 million. Wall Street had been looking for 31 cents and $390 million, respectively. The company said it ended the quarter with 10.3 million subscribers, which is the high end of the range it had promised to deliver.

And guidance was strong, too. From the company’s press release, here are Q2 predictions:

– Ending subscribers of 10.4 million to 10.6 million
– Revenue of $403 million to $409 million
– GAAP net income of $27 million to $32 million
– GAAP EPS of 44 cents to 53 cents per diluted share

And here’s the company’s revised guidance for 2009 (full year), which it increased:

– Ending subscribers of 11.2 million to 11.8 million, up from 10.6 million to 11.3 million
– Revenue of $1.63 billion to $1.67 billion, up from $1.58 billion to $1.635 billion
– GAAP net income of $96 million to $106 million, up from $88 million to $98 million
– GAAP EPS of $1.56 to $1.72 per diluted share, up from $1.43 to $1.59 per diluted share.

All of this seems to compare favorably with Wall Street’s expectations. Via Citibank’s Mark Mahaney, here’s what investors were looking for (click to enlarge):

Netflix shares have been bouncing around in the aftermarket following the earnings release, and last I looked, they’re just about flat. It will probably take investors a while to figure out if they’re disappointed that the numbers aren’t even bigger.

UPDATE: The stock is now down around 5%, presumably because guidance wasn’t strong enough. I’m back for the earnings call, which I’ll live blog part of: I’m particularly interested in Netflix’s digital strategy, so I’ll be focusing on that.

CEO Reed Hastings: Subscribers renting more DVDs and Blu-rays than ever. Disc rental will continue to grow for many years, so we’re investing in that.

More realistic Blu-ray pricing (previously discussed) of 20% to 25% premium for subs. Though we’re paying the studios a higher premium for Blu-ray. If we can get those costs in line, we can promote Blu-ray more agresssively [i.e. bring down your prices, Hollywood, and we'll push more of your high-margin discs].

We are losing customer to $1 kiosk rentals. “By end of they year, kiosks will likely be our #1 competitor,” as rental stores fail. “Longterm effects,” of cheap kiosks “are not positive for us, or the industry as a whole.”

Streaming: Overall consumer embrace of online video growing. “Not hard to believe that online video will grow substantially every year for a long time”. [Duh]. Important for us to be spending “aggressively” on streaming content. “But that means we are essentially buying many titles twice now”. Buying once on DVD, and again on streaming. Great for content owners, ok for us since costs for streaming are lower than physical distribution.

We believe we’ll get more streaming licenses as TV networks, who control titles, look to increase distribution. We are looking to a day, when we have plentiful content for streaming… “we will simply be a fourth option for consumers and a fourth revenue source for networks and studios”. It’s possible that within a few years, all CE devices sold will include a Netflix component.

It’s easy to focus on the Internet for its distribution abilities, but its important to think about social possibilities. Future of Internet TV is closer to Facebook and social networks than the standard grid lineup. Social, social, social. Long term outlook for Internet TV is very promising.

[Join to pass on most of CFO notes] No “cocooning” effect from recession apparent in DVD usage. Acquisition costs “record low” in part because of depressed online ad pricing.

Q&A: “Tremendous amounts” of hardware partnerships in the pipeline. Xbox renewal? No answer.

Have sub growth slowed at end of quarter? No. Q4 growth back-end loaded because of holidays, and Q1 growth front-end loaded for same reason.

How about a fee-based service for a streaming only service by year’s end? We talk about that from time to time, but not pressing. For now, combination of DVD rental and streaming is what consumers are interested in. A streaming-only service would be a “sweetner” to what we have now. We don’t think it would cannibalize, though.

Can you talk about streaming-enabled devices’ contribution to subscriber additions? No details, but we think it’s helpful to have Xbox, Blu-ray players, etc. “It’s definitely a very positive part of the ecosystem for us”.

What are dynamics to adding more content to streaming library? More money.

Can you talk more about new marketing efficiencies? There aren’t any new ones, really. Weak economy, lower ad prices, plus consumer excitement about streaming product.

What does competition look like on streaming front from Apple and Amazon? Right now, “all three of us are three drops of water in the pool that is watching television”, … “we all recognize in the long-term there will be competition between us” but we’re all “so tiny” compared to TV-viewing that that’s what we’re focused on.

That appears to be it for streaming-related queries. I’ll check back in with the full transcript later on.

]]> http://allthingsd.com/20090423/netflix-delivers-revenue-on-target-earnings-way-above/feed/ 0 http://allthingsd.com/20080515/at-the-churchill-club-the-top-10-tech-trends/ http://allthingsd.com/20080515/at-the-churchill-club-the-top-10-tech-trends/#comments Thu, 15 May 2008 07:01:29 +0000 Eric Savitz http://voices.allthingsd.com/20080515/at-the-churchill-club-the-top-10-tech-trends/ I’m at the Fairmont Hotel in San Jose, Calif., tonight, for the Churchill Club’s annual Top 10 Tech Trends Dinner. This is the club’s 10th annual tech trend panel. Making the picks:

• Steve Jurvetson, Draper Fisher Jurvetson.
• Vinod Khosla, Khosla Ventures.
• Josh Kopelman, First Round Capital.
• Roger McNamee, Elevation Partners.
• Joe Schoendorf, Accel Partners.
• Tony Perkins, of Always On, is the moderator.

Perkins, McNamee, Jurvetson and Schoendorf have done this before. Kopelman and Khosla are the panel newbies.

Lots of mobile phone predictions. Green energy. Water. And more phones.

Here’s the pundits’ list of trends, with some responses from their fellow panelists.

Read the rest of this post

]]> http://allthingsd.com/20080515/at-the-churchill-club-the-top-10-tech-trends/feed/ 0 http://allthingsd.com/20071227/my-predictions-for-2008-that-there-wont-be-any-from-boomtown/ http://allthingsd.com/20071227/my-predictions-for-2008-that-there-wont-be-any-from-boomtown/#comments Thu, 27 Dec 2007 08:13:41 +0000 Kara Swisher http://kara.allthingsd.com/20071227/my-predictions-for-2008-that-there-wont-be-any-from-boomtown/ Predictions, schmedictions.

As a holiday gift to all readers, BoomTown will refrain from making any big pronouncements about what’s coming in 2008 in the tech sector, because, um, well, I have no idea what’s coming in 2008 in the tech sector. No one could have Miss Cleo-ed all the twists and turns of 2007, for certain.

Could we have predicted a tiny start-up with negligible revenues but explosive growth could be valued at $15 billion? We swear on our Facebook profile we could not!

Could we have shamanized that Yahoo CEO Jerry Yang would have promised there were no sacred cows at the struggling Internet giant, even though there apparently are herds of them? It’s a mooot point that we would have been unable to do so.

Could we have guessed that Apple stock would be up 135%? You can iTouch my iPhone if I am lying!

Could we have foreseen that a devastating writers’ strike in Hollywood would be waged over nonexistent Web revenues? It’s a tale we could not have created, even with special effects.

Could we have pontificated that Google would take on the cellphone industry? You can ring our bell, but no, ma’am.

Could we have imagined that unusually enthusiastic entrepreneur Mark Cuban would lose his step on “Dancing With the Stars”?

Well, OK, we figured that one out, right after watching the painful “I Dream of Jeannie” dance number, pictured here. (But then again, we were rooting for Marie Osmond.)

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