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January 2019

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With its denial to let the EV maker operate under its unique business model, Connecticut Senate has disappointed Tesla for the second consecutive year

Despite Tesla Motors Inc.’s (NASDAQ:TSLA) back-to-back efforts last year to obtain the direct-sales license, it has recently received a red signal from the Connecticut State Senate. The opposition from CT Automotive Retailers Association (CARA) and traditional automakers was strong enough to put an end to the legislation once again.

According to recent CT Mirror report, Senate Majority Leader Bob Duff (D-Norwalk), the sponsor of the Tesla bill, killed the legislation last week, after the opposing parties effectively lobbied and ensured that the electric vehicle maker does not operate under its business model in the state. Mr. Duff stated: “We’ll come back again and try in another year.”

The young EV maker carried out a similar effort that won support from the House of Representatives, but was not passed without voting. Although Mr. Duff fully supports the bill, he requires projecting the state’s interest and his caucus, which was divided.

The House of Representatives still support the company’s efforts though, as the House Majority Leader Joe Aresimowicz reportedly said that the representatives are prepared to pass the legislation again. Tesla wants no restrictions in the bill, but still had to agree with three stores after recommendation of State Representative Tony Guerrera (D-Rocky Hil), co-chair of the Transportation Committee which sent the bill to the Senate in March.

While the automaker has operated a service facility in Milford for years, it recently received approval from the Greenwich Planning and Zoning Board of Appeal to open its first store in the state. General Motors Company (NYSE:GM), which tried to influence lawmakers to stop Tesla from directly selling in Indiana, was also present in this session to ensure that Tesla does not make any progress in its direct-sale fight.

Tesla believes that the automaker and other car dealers are using legislative bodies and legislators to kill a business strategy, while introducing a competing vehicle, i.e. the Bolt EV. Conversely, General Motors thinks the law should be the same for all the players in the industry and completely opposes a separate playing field for Tesla and other EV makers, along with CARA.

Since the state is not ready to give Tesla the auto franchising licensing, Tesla General Counsel Todd Maron is working with his team to take the direct sales issue to the federal court. The company will fight to gain direct sales approval for six states, including Connecticut.

The next lineup is making its way to the market shortly

Advanced Micro Devices, Inc. (NASDAQ:AMD) has revealed that first “Bristol Ridge” powered systems are being shipped out by OEM partners. These systems are built on AMD’s new AM4 platform with DDR4 support. Currently, only HP and Lenovo are shipping out their systems but more OEM partners will follow.

Bristol Ridge is the codename for AMD’s seventh generation APUs built on the same 28nm process and “Excavator” cores but it has improvements under the hood. The new processors have a TDP of 35W for A12-9800E, A10-9700E, A6-9500E and 65W TDP for A12-9800, A10-9700, A8-9600 and A6-9500. The APU lineup from top to bottom will be available in 2-core and 4-core options and would come with GCN-based Radeon R7/R5 GPUs. APUs carrying the “E” suffix are clocked at a lower frequency, and hence, have almost half the TDP. With the AM4 platform, AMD is consolidating its desktop processors and APUs on a unified platform.

The full list of product lineup of AMD’s 7th gen A-Series processors:

AMD is introducing B350, A320, X/B/A300 chipsets initially. The successor to 990FX and A88X will be announced later, predictably when Zen launches early next year.

The AM4 motherboards support dual-channel DDR4, USB 3.1 Gen 2 and NVMe for high-speed bandwidth. Speaking of bandwidth, the new APU with the new processors show improved bandwidth performance over previous FM2+ platform. And compared to previous 970 chipset, the new B350 chipset delivers 70% lower TDP with 5.8W.

AMD has pitted its A12-9800 and A12-9700 against Intel’s Core i5-6600K, i5 6500, i5 6500T and i5 6600K. The point here is to showcase new APUs’ power and performance-per-watt. In 3DMark 11, A12-9800 achieves 150% higher performance at 65W TDP compared to the i5-6600K at 91W TDP. And in the same benchmark, it achieves 99% higher performance against i5-6500.

Now with Bristol Ridge on the way to market, AMD’s focus is on the highly-anticipated Zen. As confirmed last month, first Zen-based processors will be available in early 2017. The launch of AM4 platform today lays the foundation for Zen’s arrival, which will also use the same AM4 platform.

Sprint Corp’s parent company and its 83% stakeholder, SoftBank, recently sold off its stake in Alibaba worth $8.9 billion

Sprint Corp’s (NYSE:S) parent company and its 83% stakeholder, SoftBank, recently sold off its stake in Alibaba worth $8.9 billion. According to Macquarie analyst Amy Young, the stake sell off underscores her viewpoint on Sprint Corp for two reasons which she mentioned in her sell-side report.

Firstly, Softbank’s lowering of stake in Alibaba from 32% to 28% highlights the parent company’s long term commitment with Sprint Corp, and considers it a key asset for the group as a whole.

Secondly, according to Macquarie’s Japanese Internet analyst Nathan Ramler, the President and Chief Operating Officer (COO) of Softbank Mr. Nikesh Arora has become actively engaged in managing its investment portfolio. This might result in better focus for Sprint Corp, and might end up in a turn-around for the company.

After divesting the stake in Alibaba, Sprint Corp now has around 24% of Softbank’s total value according to Nathan’s estimates. Moreover, he believes that spotlight on the company’s turnaround, including network upgrade, subscriber stabilization, better free cash flow generation capability is much higher.

The sell side believes that near-term solvency issue for Sprint is resolved. It has around $16 billion of liquidity committed for this year, with around $5.7 billion just for 1QFY16. This might be enough to pay down the company’s debt which is to be matured this year.

Management’s expectations for its performance are to break-even, while the analyst appears to be bullish on the company with expected free cash flow of $108 million in 2017. It has made no changes to its Outperform rating for the stock, along with a price target of $4.

The stock currently trades at $3.73. The average price target for the stock by analysts at the Street is of $7.28, with the most bullish and bearish PT of $9 and $6 respectively.

The new patents acquired from Microsoft could likely be to a key step in Xioami’s plans to officially launch in the US

Although Xiaomi’s origins are rather reprehensible, the company has gained stellar momentum over the past few years. Xiaomi started off with blatantly copying the iPhone’s design and interface with its first few devices. During one of its press unveilings, Xiaomi went as far as to have a man dressed in a black turtleneck and blue jeans combo – Steve Jobs’ regular apparel – to unveil one of its new devices. 

These actions were condemned by the Tech community overall, however, the consumers’ wallets spoke for themselves. In late 2015, Xiaomi’s company valuation was pegged at $46 billion. This much growth in just a few years is commendable, and all of this is without capturing one of the top markets in the world, the USA. However, it looks like Xiaomi may finally be about to tip its toes into US waters. 

So why the long wait? If Xiaomi had attempted to foray into the US market a few years ago, Apple, along with other smartphone manufacturers, would have sued the company to kingdom before it even had a chance. Once Xiaomi began to become a commercial success, the company varied its strategy.

While the company’s older devices blatantly copied the iPhone design, the new devices it has been releasing look nothing like the iPhone series. Xiaomi has a killer design team working for it, as the designs for most of its phones are now original and spectacular. Also, the company’s products now feature strict quality control and great build quality, rivaling some of the top smartphone manufacturers in the US. 

Yesterday, it was reported that Xiaomi had just purchased over 1500 patents for Microsoft. Since Xiomi is still a new company, it has little patent protection. This isn’t much of a problem in markets like China, but they are a huge concern in the USA. And now, it looks like Xiaomi is planning to secure itself from all avenues, given it launches in the US.

In order to survive in the US smartphone market, Xiaomi needs to have a deep portfolio of patents, and that’s exactly what the company is set out on doing as shown by this deal with Microsoft.  With this new deal, Xiaomi has made itself secure from numerous potential lawsuits if it launches in the US.

Xiaomi isn’t being shy about its expansion plans as well. While speaking to Reuters, Xiaomi’s Senior Vice President, Wang Xiang said that the 3700 patents Xiaomi has filed in China, along with the ones purchased from China, are an “important step forwards to support our expansion internationally.” 

When Xiaomi finally launches in the US, the ones that will benefit the most are the consumers. Xiaomi offers premium smartphones with superior build quality and top-end specifications, for just a fraction of the cost. This is the main reason for the company’s ascent and the advent of such a competitor in the market is likely to drive down prices for smartphones across the board.

Rumors that Qualcomm was scrapping Snapdragon 830 were false, as the chip is expected to roll out in the middle of next year

Qualcomm, Inc (NASDAQ:QCOM) was rumored to cancel the Snapdragon 830, which has proven to be inaccurate as the product is going to roll out in the middle of 2017. Speculations of the cancelation were made after the company’s announcement of working on the Snapdragon 835 just a while ago, through a partnership with Samsung’s (SSNLF) 10nm FinFet technology.

The chip maker announcement of developing the Snapdragon 835 caused fear of cancellation of 830. According to reports from China and its major social media platform, Weibo , confirmation of the product has been made including numerous features.

The Snapdragon 830 is rumored to consist of Adreno 519 graphics unit,X16 LTE modem, capable of supporting Category 12 baseband. It is expected to be produced with 10nm FinFet tech, which is also being used to manufacture the Snapdragon 835. No word has gone out yet that the 830 chip will be as small as the 835, since it is being developed with 10nm process. Snapdragon 830 will support Quick Charge 4.0 with Intelligent Negotiation for Optimum Voltage.

It is still unknown whether the Snapdragon 830 will be seen in mid-ranged smartphones and other devices or high-end ones. However, it will be seen in numerous future smartphones after its launch. The chip has not been officially confirmed by Qualcomm as of yet, thus it is better not to keep hopes that high. There are rumors that OnePlus 4 will sport the Snapdragon 830 under the hood, which is rolling out in the middle of June and July.

The chip maker has very little information that has been made public regarding the chip, thus interested customers are relying on speculations and leaks. The leaks suggest that the upcoming chip will bring an increase of almost 27% in performance, 40% decline in power consumption and even a 30% increase in area efficiency. One thing can be said for sure: the chip has not been cancelled and will be tasted by the market next year.

Fitbit Inc (FIT) Blaze is experiencing better than expected sales and might be just what the company needs to show investors for the stock price to recover

Fitbit’s Blaze could be the product the company needs to turn into a leading smart watch maker and help its stock recover from its 56% slump this year, according to Dougherty & Co. The Blaze has taken Fitbit’s fitness watch credentials and packed into them all the other features desirable from a mid-range smart watch device; giving the company a catapult into the smart watch segment.

The Blaze watch did not receive the reception it deserved from investors when it was showcased for the first time at CES, earlier this year. Investors looking for some unique Apple Watch-ish bells and whistles were disappointed with the standard features of the watch. The watch maker’s stock plummeted 18% as a result, over the next week.  However, analyst Charles Anderson at Dougherty & Co. feels that the Blaze has had excellent reception in the market and is already creating potential upsides for the stock. Anderson maintains that the firm has reaffirmed that Fitbit can trade in sympathy regarding product reception due to its rock star like position in fitness wearables.

According to Anderson, Blaze is already performing better than expected in the market and it is likely that its stock will soon benefit from investors realizing this. The reason for this is that apart from being a Fitbit fitness device, the watch also provides a lot of value in terms of useful features such as its 5-day battery life, full notification pushing abilities, music control and of course its patient activity recognition all for an affordable $199.

 According to the company’s analysis of customers’ reviews by repeat customers of Fitbit, the Blaze is seen as an improvement over all of Fitbit’s previous market offerings. Amazon figures show 87% of 654 people who reviewed the watch gave it 4 or 5 stars according to the analyst; compared to the 47% 4 and 5 star rating for the Fitbit Charge HR. To further establish the watch’s popularity, Fitbit’s earnings show that the Blaze’s pre order sales have surprised the company’s expectations. Fitbit investors should have faith in the company as long as it keeps rolling out products like the Blaze.

 

 

The Model S demand might have reached its peak for now, but Tesla has ways to create more demand for its flagship sedan

It has only been five days to the month and July has proved to be a devastating month for Tesla Motors Inc (NASDAQ:TSLA) already. The automaker not only saw its first fatality in one of its flagship sedan, the Model S, which was operating in its popular autonomous driving system, the Autopilot, it also missed its quarterly delivery guidance for the second straight quarter for the first time.

By 11:12 AM EDT, the stock was trading down 3.25% at $209.46. The shares tumbled as much as 3.92% and hit an intra-day low of $208.

Tesla guided to deliver 17,000 vehicles after producing 20,000 units during the second quarter of fiscal year 2016 (2QFY16) and reported 14,370 deliveries with 18,345 produced vehicles. While the company’s overall deliveries fell for two quarters in a row for the first time, deliveries of its premium sedan, the Model S came at its lowest point since 3QFY14.

There are two explanations for poor quarterly performance with its most successful vehicle, namely production constraints or demand reaching its peak. Since Model S and Model X use the same final assembly line, we can assume that the sedan’s deliveries were compromised in favor of the SUV, the Model X, whose delivery numbers almost doubled during the quarter to 4,465 units.

Additionally, the company said that half of the vehicles delivered during the period (about 7,185) were produced during the last four weeks, implying that production of both the models were likely affected. If the automaker would have solely produced the Model S, the number would have been far from its record-high 17,272 units in 4QFY15.

Interestingly, there were large number of vehicles in-transit by the end of the quarter. However, since this happens in every quarter, we can take into account the difference. The vehicles in-transit almost doubled quarter-over-quarter (Q/Q) to 5,150 units. Even if we add the difference to the 14,370 units delivered during 2QFY15, the total Model S deliveries are less than its record-high. Unless the management releases the sedan’s order, it is clearly evident that the Model S demand has surpassed its peak.

Nevertheless, Tesla can easily generate more demand for the Model S if it wants to. The company is gradually expanding its global footprint, introducing the sedan to new markets like Eastern Europe, Middle East, Mexico, South Korea, and Taiwan.

Historically, the company has generated more demand for its sedan by launching a new top-of-the-line version, such as P85D and P90D. The leaked P100D could be a demand driver for the company. Additionally, the company is targeting large base of Model 3 reservation holders with its recently revived the Model S 60. Tesla plans to deliver about 50,000 vehicles (25,000 per quarter) in the second half of 2016, though the prospect of achieving that target and hit the lower-end of the full-year guidance looks gloomy for now.