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February 2017

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Qualcomm now faces a lawsuit in the US; the company might have forced Apple into an exclusive chip deal

The Federal Trade Commission in the US believes QUALCOMM, Inc. (NASDAQ:QCOM) forced Apple Inc. (NASDAQ:AAPL) into a chip deal to make a WiMAX iPhone,. The chip maker faces a lawsuit in the US with claims that it used its patents unlawfully so that competitors could be forced out of the market. The tech company forced Apple into exclusive usage of its chips for a low license fee, according to the lawsuit filed on Tuesday.

The lawsuit has been filed by the FTC and consists of the said accusations. The major accusation involves the world’s biggest smartphone maker Apple. The FTC says that the chip maker made an agreement in 2007 to refund some of Apple’s patent royalty payments if it agreed to manufacture a WiMAX iPhone.

The FTC’s complaint reads: “Under a 2007 agreement, Qualcomm agreed to rebate to Apple royalties that Qualcomm received from Apple’s contract manufactures in excess of a specified per handset cap. Qualcomm’s payment obligations were conditioned upon, among other things, Apple not selling or licensing a handset implementing the WiMAX standard, a prospective fourth-generation cellular standard championed by Intel and opposed by Qulacomm.”

The chip maker was very well aware that to gain Apple’s business was a massive deal and would make the company stronger, which is why it took advantage of the situation and made Apple exclusive to itself. The company has defended itself against these accusations by saying that the FTC’s complaint is based on flawed legal theory. It even said that it has never withheld chip supply to gain an agreement.

The FTC has held investigation against Qualcomm since 2014 as it believed that it abused fair, reasonable and non-discriminatory patent commitments. This lawsuit might be hard for the chip maker to handle especially as its major client Apple is also involved. The chip maker faced a lawsuit over similar allegations in South Korea for which it was imposed a fine of $853 million.

Until the case reaches a decent conclusion, we cannot say for sure whether Qualcomm actually trapped Apple into doing business with it exclusively. The iPhone maker has not commented on the development yet.

It is our dearest hope that this doesn’t turn out to be true

In what would appear to be a very surprising news, Sony Corp. (NYSE:SNE) is reportedly not very confident about a PlayStation 4 successor. This news is brought to us by Game Informer’s Lorne Lanning (via Attack of the Fanboy), who had a nice private dinner with the President of Worldwide Studios, Shuhei Yoshida.

During their conversation, Lorne asked about the next PlayStation. He asked “What does the PlayStation 5 look like?” to which Yoshida-san replied “You mean if?”

The conversation continued with Yoshida-san reconfirming what he just said and hinting at the possibility that Sony has not yet decided upon a PlayStation 5.

Rumors like these often pop-up and are nothing new to gamers. People went on to say how the previous generations was going to be the last for consoles, but look at where we are now. From “consoles are dying” to the massive success of the PlayStation 4, there is ample evidence to suggest that consoles are going nowhere at least for now. If this generation has taught us anything, it’s that consoles have a dedicated fan-base that demand these boxes.

But perhaps what makes this news more concerning is the possible fact that Sony will be changing strategies this generation. The firm is rumored to launch a version of PlayStation 4 that is not a successor, but an upgraded version of the existing hardware. This is a deviation from the path that Sony and every other console manufacturer usually follows.

From a financial standpoint, it makes every bit of sense for Sony to continue making PlayStation products; it has become the most successful division with the PlayStation 4. Given the mammoth sized success of the console, it must be a challenge for Sony to introduce a successor that matches the momentum, if not surpasses it.

 

The energy stock may perform poorly due to the falling oil prices today.

Chesapeake Energy Corporation (NYSE:CHK) stock has performed well in the market since Election Day. The oil prices have also favored this as they have stabilized amid the recent discussions of OPEC to cut oil supply.

The oil prices have been falling today. It fell more than 1% on Friday and there are various reasons assigned to this development. One of the main reason attributed to this fall due to the strong dollar, which has reached levels as seen in 2003. A strong dollar means that the countries using other currencies make oil expensivefor themselves. This is a reason attributed by traders for Today’s fall.

International Brent Crude oil futures lost 1.4% as of 0650 GMT and were being traded at $48.31 compared to yesterday’s close. This occurred despite minimal activity over the Thanksgiving Holiday and before the weekend.

There are reports that the Saudi oil giant, Aramco, plans to increase the oil supply in January. OPEC members are due to meet on November 30 where they will decide the framework for the possible oil supply cut. The decrease in oil supply will only be applicable from February next year, as the exporters usually sell ahead two months in advance.

The shares of the energy giant closed after registering a 3.19% increase for the day. The prices stood at $6.64 on closing time on Wednesday.

The market prices have been increasing since Donald Trump won the presidential elections as his policies are seen to favor the non-renewable energy companies. The prices have also been following closely the trend of the oil prices. The fall in oil prices today may lead to a fall in stock prices for Chesapeake Energy.

The Street has majorly held a bullish stance on the energy stock. Research firms, such as KLR Group, Wunderlich, and SunTrust Banks, issued a Buy rating for the stock. The consensus price target stands at $7.34 depicting an upside potential of 10.52% over the last close.

It all started in 2010, when VirnetX Holding Corp. filed patent suits against Apple and some other companies, accusing them of violating five patents on secure communication links

VirnetX and Apple Inc. (NASDAQ:AAPL) have been fighting over patents right for many years since VirnetX, a Nevada-based patent licensor company, filed a law suit against the Californian giant. In 2011, VirnetX targeted Apple solely indicting iPhone 4S of infringing on a single VPN patent. Apple was charged with a $368.2 million suit when the US Court of Appeals ruled in favor of VinetX.

However, the US Court of Appeals for the Federal Circuit in Washington, D.C., reversed that verdict, saying there were some problems with how the trial judge drilled the jurors on calculating damages and were biased towards Apple.

Nevertheless, in February of that year, VirnetX’s lawsuits were combined, and the Jury charged an even bigger ruling of $625.6 million in damages to be paid by Apple to VirnetX. This was one of the highest charges in US patent history.

In the latest court trial, Apple Inc. has been ordered to pay $302.4 million in damages to VirnetX Holding Corp. for using its patented Internet security technology in FaceTime without permission.

Apple representative, Rachel Tulley refused to comment when approached and VirnetX’s lawyer could not be reached either.

The damages amount can increase if it is proved that Apple knowingly infringed VirnetX’s patents. A separate trial is expected to take place soon for the same.

The four patents which VirnetX has sued Apple for are considered invalid by the US Patent and Trademark Office.  However, VirnetX will appeal to the Federal Circuit due to which the patents will still be deemed valid by the court.

Six years have passed in this war between VirnetX and Apple during which Apple has reaped the benefits and profits of its phones and other products worldwide. Although, VirnetX has been awarded a sum of $302.4 million in two out of four patents, the case is still awaiting the verdict of US Patent and Trademark office.

TheCountryCaller takes a look at why Spectra Energy was up today

Enbridge Energy Partners, LP (NYSE:EEP) in a press release today announced that it would acquire the Houston-based natural gas infrastructure company, Spectra Energy Corp. (NYSE:SE). Both the companies have gone into a definitive merger agreement. The agreement is an all-stock deal valuing at around $28 billion (C$37 billion). The value for the deal is derived taking Enbridge’s closing share price on September 2.

 Consolidation in the energy sector continues to gain popularity as more and more companies decided to amalgamate operations to survive the downturn in the oil market. The downfall of the crude market has now extended to over two years and continues to weigh in on the profitability and margins of companies located in the oil and gas industry.

While news of an Organization of Petroleum Exporting Countries (OPEC) and a Russian collaboration has allowed crude oil prices to trade in the green, they still remain at extremely low levels. The US benchmark for crude oil, West Texas Intermediate (WTI) as at 3:03 PM EST was up 0.97% at $44.87 per barrel, while the global benchmark for crude oil, Brent Crude was down 0.61% at $47.34 per barrel.

The deal would allow both the companies to diversify their operations and mitigate risk in the process. In addition to the diversification, the combined entity would bring itself numerous other benefits as well.

The company would be able to further improve its investment grade balance sheet, pay higher dividends, dominate the industry in terms of returns and secure its incoming cash flows. CEO and President of Enbridge, Al Monaco regarding the deal said that “This transaction is transformational for both companies and results in unmatched scale, diversity and financial flexibility with multiple platforms for organic growth.”

Greg Abel, President and CEO of Spectra also expressed optimism and said that: “The combination of Enbridge and Spectra Energy creates what we believe will be the best, most diversified energy infrastructure company in North America, if not the world. This is an incredible opportunity for both companies and we at Spectra Energy could not be more excited about what it means going forward.”

Shares of Spectra were skyrocketing after the news as they soared 13.89% at $41.16.

Tesla is revolutionizing the automobile market via three different generations of electric cars under the Master Plan

Tesla Motors Inc (NASDAQ:TSLA) has been operating for roughly a decade and in such short period, it has shaken the dynamics of the automobile market. Once lampooned for building expensive, impractical electric vehicles (EVs), the company is now admired by executives of leading car brands, which are following its footsteps to make the world a better place to live.

Technically, the Tesla man, Elon Musk has single-handedly brought the entire auto industry to its knees. While many countries around the world, including India and the Netherlands, plan to promote green-energy vehicles, some of them also plan to completely ban gasoline-driven vehicles.

Apart from Mr. Musk and his team’s battle against the fossil fuel companies in public forums and legislatures, Tesla developed a “Secret Master Plan” which is wobbling the traditional, internal combustion engine (ICE) companies around the globe. The plan that aims to accelerate the transition of sustainable energy and transport consists of three steps.

Step 1: Low-Volume, High-Price Transport

To make a difference with tiny company having limited resources, Tesla introduced a low-volume, high-price vehicle, Tesla Roadster, in 2006 from the group up.  Mr. Musk stated at Model 3 event: “With any new technology, it takes multiple iterations and takes economies of scale before you can make it great and affordable.” )

Despite being extremely expensive and catering to limited customers, the Roadster showed the world that Tesla can make a compelling EV, as it was the first “really amazing electric car.” Before Roadster, EVs were considered as slow and ugly machines, with low-range and poor-performance. Tesla broke this “mould,” because the vehicle was a fast, beautiful, high-performing roadster.

Despite just 500 production units per year, the Roaster had “very leveraged effect,” as former GM Vice Chairman Bob Lutz accredits it with Chevy Volt program, which led to Nissan LEAF program. However, at the end of the day it was just a toy for rich men.

Step 2: Mid-Volume, Less-High Price Transport

To offer a daily-use car, Tesla rolled out a mid-volume, less-expensive sedan, the Model S, in 2012. The premium sedan received innumerable awards and superior ratings from almost all of the testing agencies on the back of its great handling, safety, Ludicrous mode, and Autopilot features.

Mr. Musk clarified that the vehicle was not build to attain these milestones, but to show the world an EV’s capability. Since half of the market required sedan and half the market required SUV, Tesla extended the Stage 2 from Model S to Model X, which was launched recently and has already broken several records.

Step 3: Mass-Market Transport

Model S/X sale proceeds will be used for development of Tesla’s first high-volume, affordable-price (mass-market), vehicle, the Model 3. The compact sedan, a 5-seater which can do 0-60 mph in less than 6 seconds and gives 215 mile range, will have all the key features, including 5-star safety rating, Autopilot features and Supercharging, like its predecessors.

Tesla’s final piece of the puzzle will be delivered by 2017-end and claimed to be better than its existing/upcoming rivals, even without options.

 

The latest rumors point to a 2017 arrival for the highly anticipated Surface Pro 5

Microsoft Corporation (NASDAQ:MSFT) is highly rumored to be working on a host of its next generation devices including the highly anticipated Surface Pro 5 during its upcoming event. The current-generation Surface Pro is one of the best, if not the best performing hybrid device which is why users expect so much from its succeeding model. Earlier, it was highly reported that Microsoft just might launch its upcoming Surface devices before the end of the year but that looks highly unlikely after the latest speculation regarding the upcoming devices. Even though the Redmond-based tech giant has kept us all in the dark regarding its upcoming projects but the latest rumors have helped estimate when the next generation Surface Pro could possibly release.

Its October already and Microsoft is still yet to unveil any details regarding its upcoming projects which indicates that the next generation Surface Pro will not hit the markets before the start of 2017. Also, the company usually releases teasers related to its upcoming devices but 2016 is almost over and we are yet to see any promotions regarding the highly anticipated Surface Pro 5.

Interestingly, reliable sources have gone fairly quiet regarding the upcoming Surface Pro 5 which also indicates that Microsoft is yet to finalize the upcoming hybrid. There have been no official reports regarding the possible features of the upcoming Surface Pro 5 since the tech giant patented a new magnetic Surface Pen which could be incorporated in the device. Interestingly, one of the most popular rumored specs for the next generation Surface Pro is that the device will be powered by the latest generation Intel Kaby Lake processing chipset. However, the hardware giant will not start mass producing its latest processor until the start of 2017 which probably is the biggest indicator for a 2017 release for the Surface Pro 5.

Furthermore, there are popular rumors regarding the next generation Windows 10 Redstone 2 operating system coming pre-installed with the Surface Pro 5. However, the tech giant is not scheduled to roll out its next major software update to Windows 10 before early 2017 which basically confirms that we will not see the next generation Surface Pro before early 2017.

Judging by the rumored specs for the next generation Surface Pro, the device could turn out to be the greatest hybrid to have ever released in the market. Hopefully, Microsoft will incorporate substantial upgrades in its Surface Pro 5 which will make the upcoming hybrid device worth the wait.

Obama Administration scrambles to close similar cases before January

Obama administration has moved in to solve the crisis relating to banking mortgage cases as the current fiscal year is about to end. In a latest series a settlement has been reached by the government with Deutsche Bank AG (USA) (NYSE:DB) in this regard. The financial giant has agreed to pay a fine of a massive $7.2 billion over toxic securities.

The announcement shows that senior officials in the Department of Justice (DoJ) are scrambling to solve the cases before they leave offices by mid-January, next year.  They are trying to settle the cases with major banks as the future of these probes is uncertain under the next administration. Donald Trump’s administration may wish to settle, pursue, or totally drop these cases altogether.

The settlement can be marked as a win for the German shareholders as DoJ earlier sought $14 billion; back then it seemed difficult to negotiate the amount down. The settlement will have a lower effect on its bottom line figures immediately as only half is required to be paid in cash. It has been divided into a $3.1 billion penalty along with a $4.1 billion pledge to a consumer relief fund, which will be distributed by the government.

The terms regarding the loan modification and the pledge are yet to be finalized between the two parties. The banking giant announced the settlement yesterday evening, saying that it has reached an agreement with DoJ. The settlement is similar to those that DoJ has made with other banking giants, such as J.P. Morgan Chase & Co., Citigroup Inc., and Goldman Sachs Group. Inc.

Deutsche Bank shares fell in the last session yesterday, losing 0.91% of their value and closing at a price of $18.54. The stock, as of 7:49 PM EST has started to recover as it has gained 0.32% and is trading at $18.60 in the after-market hours today

Analyst thinks Samsung’s missteps are not likely to have a materially positive impact on iPhone units

Nomura Securities reviewed Apple Inc. (NASDAQ:AAPL) stock with a positive note as the firm noted that the Samsung Electronics’ (OTCMKTS:SSNLF) failures are unlikely to have a materially positive impact on Apple’s iPhone units. The firm reiterated a Buy rating on Apple stock and affirmed a $135 price target, reflecting 14.84% upside potential over the closing price of $117.55.

Noting the battery challenges faced by Galaxy Note 7, Jeffrey Kvaal of Nomura Securities commented that even with the worst case scenario of 28 million total Note phones, the opportunity does not translate to a material benefit for Apple. Mr. Kvaal’s channel checks indicated that to date, around 90% of users who returned Galaxy Note 7 have opted to stay within the Samsung family. This reflects that the unit sales bump may be negligible.

On the contrary, many analysts believe Apple to be the primary beneficiary of Samsung’s Note 7 recall. Street analysts hope to see around 5 to 7 million iPhone 7 orders to generate from ex-Note 7 users. Drexel Hamilton analyst, Brian White, estimated that the Apple may ship 8 million extra unit sales in 2016, out of the 10–14 million Note 7 phones that were expected to be sold this year.

Samsung is pushing its consumers to return back Note 7 phones as it is well known that it could pose a safety risk. Since its original recall to September 27, the smartphone manufacturer was able to get back more than 60% of its phones back. Remaining 40% users have opted to keep the phone despite reports of overheating, catching fire, and explosion.

“People really need to take it seriously. We don’t believe in recall fatigue. There are certainly a lot of recalls announced, but each and every one is important to respond. You don’t know when or where the phone could overheat,” said CPSC deputy director, Patty Davis.

Tesla’s Elon Musk tweets an unexpected product unveiling event on October 17, a week before the unveiling event with SolarCity

Tesla Motors Inc (NASDAQ:TSLA) has already scheduled an unveiling event along with its planned acquisition and sister company SolarCity Corp (NASDAQ:SCTY) on October 28 in San Francisco. During the past week, Tesla CEO Elon Musk announced another product unveiling ahead of the October event. Mr. Musk announced via a Tweet on Sunday that the electric vehicle (EV) company will hold a product launch “unexpectedly” on October 28, just a week ahead of the unveiling of new Tesla Energy products and solar products.

In his previous tweet in September, the Tesla man wrote that the company will unveil a solar proof that will be compatible with the Powerwall and a new Tesla charger, which would provide more colors on the solar and storage combination. Earlier today, The Country Caller reported that Powerpack 2.0 and Tesla Inverter are also been prepared to be unveiled.

We think that all of those products will be unveiled on October 28 in the event that will be focused on Tesla’s vision to become the world’s first sustainable, vertically integrated energy company. For the October 17 event, we think that product will be not related to Tesla Energy or Tesla Solar, and will be related to Tesla cars, battery technology, or autonomy.

Firstly, it has been quite a while since Tesla gave an update on the Model 3, whose higher-end versions are expected to have better acceleration and range. The automaker could unveil the higher-end variants of the compact sedan or showcase the production candidate versions of the vehicle.

Secondly, Model Y, the compact SUV, has been in the plans for years and it is expected to be introduced after the Model 3’s launch and is known to be equally important to the company. Tesla could demonstrate the first prototype version of the vehicle. It can also unveil the future cars that are included in the Master Plan; Part Deux, Tesla Bus, Tesla Pickup, and Tesla Semi; it could also be the long-awaited second generation Tesla Roadster.

Thirdly, Tesla Autopilot has gotten most of the spotlight in recent months on the back of accidents and new features incorporated via v8.0 software update. The company has been expected to roll out the Autopilot 2.0 hardware suit, as well as retrofit upgrade for the current hardware.

Fourthly, Tesla expects to start production of its new 21-70 cells at the Gigafactory later this year and the event could be a appropriate time to unveil the new cell technology, which is claimed to greater energy density leading to cost savings.