J.P. Morgan Equity Research analysts Rod Hall, Ashwin Kesireddy and Greg Schuck take a look at recent news at a few large companies such as Apple Inc. (NASDAQ:AAPL), Cisco Systems, Inc. (NASDAQ:CSCO), Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and more, commenting on the market impact of some recent developments.
Cisco Says Probing Possible Bribery
Cisco Systems, Inc. (NASDAQ:CSCO) is investigating potential violations of US bribery laws by the company and its resellers in Russia, Eastern Europe and Central Asia, but doesn’t expect financial results to be materially affected, it said in its 10-Q. (Cisco, Reuters). Our View: Having had plenty of experience with bribery scandals in telco equipment we aren’t overly worried by this. However, the fact that Cisco chose to flag it in the 10-Q likely means we need to monitor developments here.
Nokia X Pre Orders Reach 1M in China
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) announced that it has received over 1 million pre orders in just four days. (Nokia) Our View: Although Nokia is publicizing this as 1m pre-orders, many tech websites have pointed out that 1m pre-orders may not be equal to 1m sales. The website that is handling Nokia’s Chinese pre-orders reportedly has a button that says ‘pre-order’ which anyone can click without any commitment to buying. If the 1m clicks are legit, then we view this is a slight victory for Nokia although it is too early to say.
China Mobile Requires 5-Mode Support for TD-LTE Smartphones
China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:0941) requires that all TD-LTE smartphones to be certified beginning May 31, 2014 support five mobile communication standards: TD-LTE, FDD LTE, TD-SCDMA, WCDMA and GSM. As of the end of 2013 it still required 5-mode support only for models priced at over CNY2,000 (US$326) but only 3- mode (TD-LTE, TD-SCDMA, GSM) support for models priced at about CNY1,000, in order to accelerate TD-LTE promotion, according to Taiwan-based supply chain makers cited by Digitimes. The policy shift from 3-mode to 5-mode support will entail additional licensing fees for FDD LTE and WCDMA patents as well as reduce room for choosing chip solution suppliers, the article said. (Digitimes) Our View: If this turned out to be true it would be a clear positive for Qualcomm in our opinion, although we are unable to verify the accuracy of the Digitimes story.
Apple Reportedly Shelving Plan to Launch 12 Inch Tablet
According to Digitimes, Apple Inc. (NASDAQ:AAPL) reportedly shelved its large-size tablet project because of lack of support from related platform developers and ecosystems. (Digitimes) Our View: This is consistent with supply chain data we have been hearing – namely, that component producers like battery makers have shelved production plans. This doesn’t mean that the product can’t be revived later this year but we do believe production has been pushed. Our Asian team’s checks suggest that the problem was software which, if true, would support our iAnywhere thesis. However, we acknowledge that development of a combo OS with both iOS and OSXlike interfaces would be non-trivial and could end up slipping.
