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November 2017

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Spotify is the biggest service of its kind but Apple Music offers exclusive releases, so we thought we should help you decide

Apple Inc.’s (NASDAQ:AAPL) Apple Music and Swedish music streaming service Spotify are without a doubt the two biggest players in the online music market. Spotify boasts 55 million users with more than 20 million paid subscribers to the service. Apple Music, on the other hand, racked up 13 million paid users in April earlier this year, and both services offer monthly subscription for $9.99. Both services have their merits and unique selling points, so let’s evaluate them and try to reach an unbiased, fair decision (as if!)

Spotify’s biggest merit over Apple Music is its free offering. It offers users the chance to use the service on desktop as well as mobile without paying a subscription fee, but naturally, it withholds some features like unlimited skips and having your playlists available offline. Still, a free Spotify account allows the user to stream his music from Spotify’s library that contains more than 30 million tracks, with some limitations that do not feel out of place for a free account.

Apple Music’s biggest selling points over Spotify is its celebrity endorsement and exclusive releases. The biggest example of which is one of the most influential artist of today’s pop culture, Taylor Swift. It deals other streaming services a deathly blow to see that Taylor Swift’s music is available exclusively on Apple Music, and looking at her huge fan following, subscribing to Apple Music doesn’t seem too bad if you can listen to your favorite artist wherever and whenever you want to.

Another point that gives Apple Music a leg-up over Spotify, is its integration of the iTunes library. Many of us have a lot of our music on iTunes as it is a major player in the music industry today, and Apple Music is the service, not Spotify, that gives the user streamlined access to personal iTunes library as well as the iTunes streaming library.

Both Spotify and Apple Music offer the chance for the user to discover music from their 30 million plus track library. Apple Music’s curation of playlists is done by its team of experts, according to Apple, and its Beats 1 radio is another jewel in Apple Music’s crown. On the other hand, Spotify also features a variety of playlists that cater to a listener’s interests, as well as other genre-based playlists like Jazz, R&B, Pop etc. Spotify also includes its radio service based on genre but Apple Music’s offering is much more streamlined.

Spotify’s radio lacks behind not only Apple when it comes to radio, but other services as well like Pandora. Plus, it is one area where Apple reigns supreme with its expert-handled radio division easily trumping other competitors through sheer force and quality. As we move towards the individual experience of using both services and their apps, we come to find that Apple Music is nothing of an absolute mess when it comes to user interface. Fortunately for Spotify, this is one area where the Sweden-based service excels. Apple hopes to right that wrong soon though, with the iOS 10 update bringing wholesale changes to Apple Music.

In conclusion, both Apple Music and Spotify have their merits and demerits and both have reasons for developing a loyal user base that thrives off their offerings. However, in our opinion, Spotify holds the trump card in the face of its ad-based free service. 55 million users listen to their favorite artists and Spotify’s playlists by virtue of its free service, and it is there that Spotify hopes to convince users to move to a paid account. Apple Music doesn’t offer a free tier, but its family account options make it easier to run multiple accounts for a minimal fee. Spotify’s free account is unmatched though, and it takes the cake for our preferred streaming service.

Huawei wants to surpass Apple as the biggest smartphone maker in the next 5 years

At a time when Apple Inc. is thinking not to bring any innovation in iPhone till 2017, Huawei Technologies seems to bank on it by introducing its Google Daydream based phone this fall. Huawei Technology has plans to integrate virtual reality with its phones. While much information was not available of the new set, Huawei said that it will be partnering with the premier German optics company named, Leica for at least five years. Huawei and Leica’s coordination started when both companies collaborated on the Huawei P9, with improved camera quality. However, that still did not entice many smartphone users.

Google had already announced last month that its VR Platform, Daydream, will succeed Cardboard. Moreover, it also named a selected group of smartphone manufacturers who will use Android N. Virtual Reality, as we all know, is a recently popular concept that has been gaining popularity among tech giants such as Google and Samsung. Huawei does not want to keep itself out of the game. After becoming one of the major players in the global smartphone market with 8.2% market share in Q1FY16, the company realizes the need to continue its innovation to grow its share.

Huawei CEO, Mr. Richard Yu has a vision to surpass Apple Inc. and become the world’s biggest smartphone maker in the next 5 years. While this may seem too ambitious, Mr. Yu did mention that it is not too easy and will require a lot of patience. Huawei may have been able to gain traction among smartphone users in Asia and Europe, its entry into the US region is a big challenge posed in front of the Chinese smartphone maker.

Talking about the date of launch for Daydream-ready phones, Mr. Yu said that these phones will rollout as early as fall of 2016. While that may entice many of Huawei fans and smartphone users, we still wait until the smartphone maker sheds light on other specs. We will update you on any developments with regards to this.

The analyst believes Chevron Corporation is about to enter high-margin growth era

BMO Capital analyst Brendan Warn started coverage of Chevron Corporation (NYSE:CVX) with Outperform rating and $120 price target today, reflecting 17.36% upside potential over the stock’s last close. The analyst believes the company has arrived at an inflection point and is now going to witness high-margin growth and declining “pre-productive” capital.

The analyst explained that Chevron is able to report positive organic free cash flow to cover the cash dividend “at $50/bbl in 2017.” He also said that the company is highly-leveraged to a potential recovery in crude prices. He sees Chevron growing production at 4% CAGR through the 2015-2020 (expected) period. The analyst said that the company’s regional base asset investment is witnessing higher pace, and it is also prioritizing value over volume. This led him to suggest that brownfield and unconventional would be preferred.

Mr. Warn also says the company has what it takes to improve margins. He quoted his analysis and said that deep water projects and conventional LNG delivery would bring an improvement of up to $4/bbl by 2020 in cash margins. Chevron can also post unconventional growth in production for the short cycle, which could comprise as much as 25% of production by 2025, escalating the company’s flexibility in terms of capital, he added.

As per the analyst, the company could also raise capital flexibility with investment opportunities having shorter cycles, and this would help it improve its balance sheet. It can also lower employed pre-productive capital from 50% last year to 25% by 2018, expected, and “improve ROACE back to top-quartile performance,” he added

According to the data from FactSet, the consensus has 13 Buy, one Overweight, and 12 Hold ratings on Chevron shares. It also has a $111.39 mean 12-month price target on the stock, reflecting 8.94% upside potential over its last close.

The road to redemption is long, but Ubisoft may well reach its destination sooner than later

It almost seems bizarre when you think about how recent years have seen Ubisoft snatch the unholy gauntlet from Electronic Arts Inc. (NASDAQ: EA). There was a time when the publishing giant EA was in the spotlight alone; winner of the “Worst Company in America” award for two straight years, tagged as a greedy corporate entity, with a global quest of integrating microtransactions and ruining games left and right.

EA, though, seemingly tired of the worsening image of its brand, suddenly began working on its quality standards and communication to patch up the visible cracks in its outer walls. The internet likes to make fun of how Ubisoft suddenly arose that day, intent to substitute itself – much like how there should always be a Lich King present to maintain unholy balance.

The impending chain of events saw Ubisoft – almost purposely – release broken and half-baked products, ensuring at numerous occasions that the PC user-base got the sharp edge of the knife. It’s actually amazing to see how the company always managed to hype up everyone for an upcoming release, citing how it had learned from previous mistakes, making promises and raising expectations. None of them were ever fulfilled, or at least, during the launch period.

The release of Watch Dogs in 2014 was a disaster, from being one of the most anticipated open-world games of the year to an incredibly forgetful experience. Assassin’s Creed: Unity (following in the same year) was supposed to showcase the storyboard’s vision and power, an amassing of knowledge from the numerous preceding installments; it only ended as a rushed game with enough bugs and issues to qualify for a developer’s worst nightmare. Far Cry 4 was different; some were actually able to play without a hitch, while others had to face performance issues and struggled to just get the game up and running (despite multiple post-release patches).

The days leading up to the release of Rainbow Six: Siege last year were of similar nature and carried much concern. For many, the game’s beta sessions were plagued with connection and matchmaking issues. With just days to go before release, many wondered how it was possible to push the product in such a condition. However, Rainbow Six: Siege stuck to its release schedule, dispersing all speculations about a delay, and saw to a smooth launch. For being an online multiplayer team-based game, there were hardly any major issues reported. Players enjoyed the Rainbow Six experience and appreciated the work put in by Ubisoft.

The studio followed it up with Far Cry: Primal this year. Knowingly, the Far Cry engine has always expressed an easier way towards hardware optimizations, despite the issues with Far Cry 4. It, however, was Ubisoft’s notion of escaping the conventional Far Cry formula and switching gears into a brand new prehistoric timeline that captured our attention and respect. It’s always risky to change key aspects of an establish franchise, but Ubisoft took that jump, offering fans a new flavor that proved excellent.

Next comes the recently released, The Division. Ubisoft locked horns with the mighty and lucrative Destiny brand from developer Bungie and publisher Activision Blizzard Inc. (NASDAQ: ATVI). Officials had already expressed confidence how it would cast aside Destiny, and it proved its worth when the Division went on to become the largest selling new IP in Ubisoft’s history. Since its release earlier this month, the developer has also shown a staunch commitment of knowing fully well the downsides of Destiny, and working towards making sure the same never happens for the Division. Ubisoft plans to reveal new content this week for the game’s next major April update, in a way, promising similar attention to ways players can keep themselves busy every month.      

Suffice to say, this short run has thrown a new light on Ubisoft and proves that the company has accepted its faults. It’s now working towards redemption; ensuring stable releases, communicating with its community for features and changes, acting on valuable feedback and more, all for garnering a positive following and finding itself back in the good books of users.

That being said, the road to redemption is seldom short and easy. The Division may have just released, but Ubisoft already has its hands full. With an ongoing drought of content in Destiny, the release of the Division has actually seen many jump over. This has given Ubisoft a timely advantage. Until the release of Destiny 2 next year, Ubisoft can make sure that it fortifies the user-base of the Division, making them think twice to ever leaving behind the post-apocalyptic New York City.

We’re now anticipating an invigorating reveal of Watch Dogs 2 at E3 2016. The first game may have been a disaster, but it laid the foundation to something big. The sequel should take advantage of that, offering us a new look at the series with rememberable characters, a better storyline, powerful visuals, new features, a capturing open-world, and most importantly, a stable launch.  

Tesla Motors is building a massive 10 million square feet Gigafactory in Nevada which it hopes will help slash battery costs by at least 30%. We analyze how that could be difficult to achieve

Tesla Motors Inc (NASDAQ:TSLA) is eyeing transitioning into a mass electric automaker on the back of noticeably larger production and sales volumes of its electric vehicles over the next few years. That goal however depends on Tesla’s ability to ramp up production smoothly. But more so, Tesla needs to keep a tight lid on costs – battery costs in particular that form the bulk of the production costs of these alternate fuel vehicles.

To do that, Tesla is trying to take advantage of in-house economies of scale by building a 10 million square feet, $5 billion lithium ion battery factory it calls the Gigafactory in the state of Nevada, outside of Reno. The company’s CEO, Elon Musk has cited sharply falling battery costs, and says that at optimum production capacity (half a million battery packs a year) the Gigafactory could help slash battery costs for Tesla by at least 30%, thereby making it easier for the company to price its vehicles in mid-ranges to appeal to a larger target market.

However, a core input that goes into making batteries for electric vehicles and other applications (stationary storage), lithium that is, has been on the move up on the price curve as miners and related companies see the burgeoning demand for the what Goldman Sachs calls “white gasoline.”

Consider this: Tesla has already said that its Gigafactory alone will be producing as many batteries as the rest of the world combined. That equation does not factor in other automakers and energy storage players that are ramping up their production to take on Tesla.

According to a report from Bloomberg, lithium carbonate being imported into China alone in the last two months of 2015 saw prices more than double to $13,000 per ton. Bloomberg also quotes some contracts worth more than $23,000 per ton.

Bloomberg claims that for every one percent increase in global market share of electric vehicles demand for lithium jumps by 70,000 tons a year. The data and analytics firm proposes that in the next 10 years, lithium-ion market could literally triple in size.

And the claim is conceivable too. Tesla – arguably the most successful pure play electric automaker – has already reported booking over 300,000 orders for its new mass market Model 3 sedan, slated for a rollout late next year, and unveiled only as recently as March 31.

For Tesla, which plans to make part of the Gigafactory operational later this year, rising lithium-ion costs could quickly mount a major challenge in trying to cap production costs – a goal that lies at the center of the $5 billion Gigafactory project.

Analyst weighs in on GoPro stock after a fireside meet with CFO at Annual Consumer Conference

Erinn Murphy, analyst at Piper Jaffray offered commentary on GoPro Inc. (NASDAQ:GPRO) after having a fireside chat with its Chief Finance Officer, Brian McGee. The meeting took place at the 36th Annual Consumer Conference conducted by Piper Jaffray. The analyst did not make any changes to his Underweight rating on the stock and maintained a price target of $6.5, which reflects a 33.05% downside potential on GoPro stock.

The analyst noted that although the conference room had greater volume compared to last year’s room, the number of attendants was not up to the same level as it used to be in the past. GoPro CFO revealed during his talk with Mr. Murphy that the company, “will continue to work through inventory.” He further mentioned that by the end of second quarter, they anticipate the channel inventory to be down 35% which marks the lower end of the expected range of 35-50%. The company is more than expectedly inclined toward the sale of goods to retailers prior selling it to the public, said Mr. Murphy.

For each quarter, the action camera manufacturer continues to expect sequential improvements in gross margins from first quarter’s adjusted rate of 36%. Furthermore, upon being asked about capital allocation, the CFO revealed the company’s plan to continue investments in business in comparison to the repurchase of shares.

On the other hand, GoPro investors expect a strong recovery in the second half of the year as they anticipate great offerings from the company in the form of the upcoming Karma drone and the Hero 5 camera. Also, the GoPro supplier company, Ambarella executives indicated recently that they expect a turnaround in the action camera industry in the second half of this year.

Meanwhile, according to Thomson Reuters, the consensus 12-month price target for GoPro stock stands at $11.88. The figure reflects a 22.34% potential upside on the San Mateo based company’s stock, over the last close.

AirPods were supposed to ship in October, but there’s still no word on when they’ll actually start doing so

As reported by Wall Street Journal, Apple Inc. (NASDAQ:AAPL) is set to miss the holiday season shipping period that it targeted for the shipping of its Bluetooth-powered wireless “AirPods.” Why, you ask? It’s because they can’t seem to sync the audio output on the left and right buds. 

At the launch of iPhone 7 in September, Apple marketing chief Phil Schiller came out and exclaimed that AirPods were the future of wireless audio output and they’d be shipping later in the same month. However, soon after, it was announced by Apple that AirPods have encountered a slight shipping delay, without announcing a new date for shipping. 

An Apple spokesperson stated that the company doesn’t believe in shipping products that are not yet ready, but one has to ask, why announce on stage of your biggest annual event that it would be ready before time? That late-September delay has now found its way to December, and it looks Apple are set to miss the holiday sales season with its AirPods. 

As for why it seems to be missing the holiday period, it is reported that Apple is currently having difficulties syncing the audio between the two pieces of the Pods. Strange as it may sound, Apple is yet to discover a major issue that has hampered the development of the AirPods so much that they’ve not only missed their initial release date, but it looks like they won’t be here this year at all. 

There is no doubt that the delay in release will definitely cause some grief for the Cupertino company, not to mention the loss of revenue that it would’ve otherwise earned from the holiday period. While it is unlike Apple to miss the release date of an apparent ‘revolutionary wireless product,’ users would be hoping that when it finally drops, it is worth the wait.

The Country Caller takes a look at what the technical indicators say about both the companies

Qualcomm Inc. (NASDAQ:QCOM) and Ambarella Inc. (NASDAQ:AMBA) are two prominent chip makers in recent times. Both these competitors have been trying to give a tough time to each other as Qualcomm prides on its low-powered chips while Ambarella prides on its quality. In a recent article, The Country Caller discussed that Qualcomm was trying to get the chip contract from GoPro, as it offered a low cost alternative to Amberella’s chips. Qualcomm has recently been making its way into the patent world as it has registered a number of patents for Original Equipment Manufacturers.

The Santa Clara based image processing product manufacturer Ambarella Inc. has also been in the limelight in recent times. The share prices have gone up more than 30% in the last two months, while the street also has a bullish stance and expects a TP of $61.16. The Country Caller takes a look as to what the technical indicators say about both the companies.

Qualcomm Inc. currently offers an opportunity to the bulls as technical indicators hint a Neutral position of the stock.  The 14-day RSI is 54.69 currently, which hints a Neutral scenario. Moreover, other indicators such as Stochastic RSI and oscillators suggest a significant potential for the bulls. The average directional index indicates that the current trend is weak. The bull/bear power indicator suggests that Bulls are strong.

Major price level for Qualcomm is $54.57, a break above which would lead to $54.96 and $55.97 levels, respectively. major support exists at $53.56, a break below which would plummet to $52.94 and $51.93 levels, respectively. We maintain a bullish stance on the chip maker.

Ambarella  is nearing the overbought region, but the bulls may still dominate for a few more sessions. The 14-day RSI stands at 67.72, which hints a slightly overbought condition. However, other indicators such as Stochastic RSI and oscillators hint that there is potential for the bulls. The Average Directional Index is 27.91, which indicates a weak trend. The bull/bear power indicator suggests that the bulls still are dominant.

Major price level for Ambarella Inc. is $54.47, a break above which may lead to $55.15 and $56.88 levels, respectively. major support exists at $52.74 level, a break below which may further plummet to $51.69 and $49.96 levels, respectively. we maintain a Neutral stance on Ambarella  the street is highly optimistic on the stock as it expects a TP of $72.

Let’s see if the bulls can dominate in both the stocks today.

While Lending Club continues to face internal problems, BTIG continues to maintain a positive stance on the stock

After LendingClub Corp. (NYSE:LC) reported strong quarterly results on May 9, 2016, equity firms began updating their stances on the stock. BTIG cut its price target from $21 to $9 last week, cutting it by more than 50%. The equity research firm has now reaffirmed its price target, which indicates a 128.43% upside potential on the stock’s last closing price.

Analyst Mark Palmer at the firm pointed out to a Financial Times article dated May 9, 2016, which had highlighted several issues with the company’s internal controls. In his comments, he said that the incident the Times author had discussed involved just $22 million worth of loans compared to the more than $18.7 billion debt the company has raised since its inception. He also said that he is not questioning the company’s operations, but he did admit that this small amount of loans did raise a red flag. However, he believes that red flag was probably not significant enough to lead to a 51% plunge in the stock.

Pointing out to the media commentary on the company which compares Lending Corp to conventional banks, the analyst said: “What makes LC and its marketplace lending peers different, in our view, is their use of technology to create a cost arbitrage and more efficient capital allocation. While traditional banks have a low cost of capital, LC has a low cost of operation facilitated by its algorithm.”

Mr. Palmer also said that no investor in the company’s loans has been affected from the incident disclosed on May 9. He further added that the news was irrelevant for an average retail investor, as it was not related to loan prices or credit performance.

The analyst reaffirmed his Buy rating on the stock. The Street currently maintains a 12-month mean price target of $8.77, which reflects an impressive 122.58% upside potential over the stock’s previous close.

Back in 2014, Twitter was reportedly considering acquiring SoundCloud. However, it decided against that later

Twitter Inc. (NYSE:TWTR) is reportedly making its own play in the online music streaming business. According to a recent ReCode report, the social media company has invested $70 million in SoundCloud in a latest funding round for the streaming service. The funding round is said to go into the $100 million range as per unnamed sources quoted by the publication.

SoundCloud aims to hit a $700 million valuation through the funding round. Interestingly enough, back in 2014, investors had reportedly put forth the same number with regard to the company’s valuation when it raised around $60 million.

Twitter, in exchange for its investment in SoundCloud, would own a stake in the company. “Earlier this year we made an investment in SoundCloud through Twitter Ventures to help support some of our efforts with creators,” Twitter CEO Jack Dorsey said in an interview with ReCode. Mr. Dorsey went on to regard SoundCloud as one of its “great partners,” adding that both his company and the streaming service have a similar business model.

Meanwhile, SoundCloud, after confirming Twitter’s investment, highlighted that it will allow the company to better streamline its worldwide efforts and concentrate on creating more value for both artists and audiences in a better way. “This investment will enable SoundCloud to remain focused on building value for creators and listeners alike, and to continue the global rollout of many company initiatives such as our recently launched subscription service, SoundCloud Go,” the company said in a statement to ReCode.

At present, it is unknown whether Twitter’s investment reflects a partnership arrangement with SoundCloud wherein both platforms could integrate with each another. It should be noted though, that earlier on in 2014, Twitter was reportedly contemplating to completely buy out SoundCloud, however, it decided to pass on that opportunity.  

There is a strong possibility that with this investment, Twitter aims to improve its own platform in a bid to increase user engagement and subscription. The company’s user base has been stuck in a stalemate since quite a while, with the stock bearing the brunt of investor concerns on Twitter’s ability to turn around its business. In the past 12 months, the microblogging service has seen shares plunge nearly 60% while the S&P 500 has declined a meagre 0.9%.

The idea of Twitter itself being acquired by other major players in the tech industry has been greatly welcomed in business and investor circles. Since LinkedIn’s $26 billion acquisition by Microsoft, investors believe it is quite possible that Twitter might be acquired in a similar fashion. This is well reflected in the stock price, which, for the past two days, has surged by 10%. Many believe that like LinkedIn Corp. (NYSE:LNKD), Twitter may also be forced to sell itself amid increased brain drain in its workforce along with depressed stock levels.