Reasonable numbers but tough outlook. Facebook Facebook reported reasonable results but I still don’t think that the market has fully appreciated the difficulty that the company is going to experience in the medium-term which keeps me cautious. Q3 18 revenues / EPS were $13.7bn / $1.76 compared to consensus at $13.7bn / $1.46. The better than expected profitability caused a...
Red flags everywhere The saga of Faraday Future continues with further evidence of terrible financial management which serves to underpin my view that while Jia Yueting has control, the venture is doomed. The latest twist in the story is a statement from Evergrande Health (see here) that alleges that Jia Yueting has manipulated his majority board seat position in the...
IBM can now lay a claim to the cloud. IBM’s acquisition of Red Hat needs to go well because the $34bn that IBM is paying in cash will all end up on the balance sheet as debt, taking gearing to an uncomfortable 66% of assets. IBM will pay $190 per share to acquire Red Hat which is a premium of...
AMZN & Snap struggle. GOOG is just fine. Performance relative to expectations drove the earnings of Amazon, Google and Facebook obscuring that at least in Alphabet’s case, the results themselves were very respectable. Alphabet. Alphabet reported good results, but the weight of growth expectations left the market wanting more, resulting in a softening of the shares in after-hours trading. Q3...
The assault on the labels begins. Spotify has formally launched what I think is the first element of a strategy that will see the obsolescence of the record labels resulting in the enrichment of both the streaming services and the artists. Spotify has brought out of beta testing a tool that allows anyone with a Spotify for Artists account or...
More excited about its pipe than the contents Verizon reported good Q3 18 results headlining with 510,000 smartphone post-paid net adds, 5G and 6% YoY revenue growth and playing down the awful performance of its digital assets (Oath). Oath is the amalgamation of two ageing giants of the early days of the Internet (AOL and Yahoo) both of which look...
Google, & Co. have their tentacles in almost everything that’s “free” RFM’ use of Google as the developed market’s benchmark for monetisation gains greater foundation as it turns out that 88% of free Android apps available on Google Play can share data with a Google-owned entity. This enables Google to gather data on almost all activities that are being carried...
Even at $15 per unit, the impact is catastrophic. Google’s price list for its apps minus Chrome and Search is an indication that the economics of the EU remedy are completely unworkable, ensuring that everything will continue as before. The price list for what handset makers will have to pay to Google to be able to install Google apps on...
Yet another AI red flag. Another small slip-up by Facebook reveals just how challenging its AI problem is and why it must continue to hire humans to do the jobs of the machines resulting in the announced 1000bp decline in operating margins over the medium term. This slip-up involves only one user but serves as a great example of how...
Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.
Apple vs. Android – The price of price.
Apple benefits but Android suffers. The result of huge increases in device prices is now being felt as data from the US indicates that iPhone users, in particular, are holding onto their phones for longer. For Apple, this is a worthwhile trade as the increase in price that it has been able to push through is greater than the negative...