Credit Suisse Reiterates $150 Price Target on Apple

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The analyst is confident that the tech giant has ability to make more sales

Despite reaching at its 52-week low, an analyst at Credit Suisse, Kulbinder Garcha expressed on Tuesday that he is reiterating his price target of $150 on Apple’s shares.

Since last week, after the announcement of the company’s quarterly earnings, its shares have been declining. For the first time ever in thirteen years, the tech giant reported quarterly revenue decline and for the first time ever, the company recorded a decline in the sales of its core product –iPhone –in comparison with the prior year.

But, according to Garcha, a lot of the elements which have been hurting the stock are ephemeral. He is confident that in the upcoming six to 12 months the negative factors can possibly be reversed.

He added that iPhone’s demand is slow due to rate of upgrade. Earlier, the company has impressive rate of upgrade with iPhone cycle while this year, the upgrade was quite modest. Moreover, the Cupertino Calif. firm is expected to release the next generation iPhone, dubbed iPhone 7, sometime later this year.

According to his analysis, the iPhone consumers are likely to change their devices in a span of around 13 months and close to 90 to 95% of them didn’t let go of the brand therefore, in line with this assumption, the stock is likely to revive and the iPhone sales will gain momentum.

He added that since the tech titan’s stock is trading at 9.5 times forward earnings therefore the company’s valuation is duly in line with that of other smartphones manufacturers. He also cited that what distinguishes the company from other competitors is the “strong retention” which the firm has.

Garcha said that in order to shake the firm foundations of the tech behemoth, any rival has to come up with a handset which can easily giver better user experience across TV platforms, computer, and mobile at substantially lower prices.

Credit Suisse put forward their analysis of the probable international growth and cited that, in the next five years, the company has the ability to generate another $90 to $95 billion in China if it can get hold of the Chinese consumers who are willing to spend around $600 a year on Apple products. Additionally, for coherent international growth, the tech titan has to expand in the markets of Brazil, Russia, and India.

According to senior research analyst at Piper Jaffray, Gene Munster, the sales cycle and demand for iPad and iPhone differs at great extent. Therefore, the projection that the tech giant hasn’t been able to revive from the declining sales of iPad couldn’t be iterated on iPhones. He said that having been handling the trends of iPhones for almost nine years, the analysts can easily guess how the iPhones sales will turn out.

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Twitter Opts For Ad Video For Revenue Increase

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The social networking firm has posted disappointing results and now look for other revenue streams to upgrade its performance

 

Last week, Twitter disappointed a lot of its investors when it posted far below than expected results. The company missed its first quarter estimates and reasoned the underperformance to the big advertising brands for not promptly increasing their spending.

For the current quarter, therefore, Twitter’s revenue is expected to shrink around 17% –just eighteen months ago, the company was able to double its revenue. The investors have been quite unhappy about the company’s performance. The ad revenue has been the only beacon of light for the company amidst a large number of issues which the company has been encountering. For a long time now, the social networking firm has been in the vortex of stagnant user growth, unorganized product strategy, and management turnover.

The reason due to which big brand advertisers are not highly interested in the company is that the company’s ad promotions have got a traditional touch. The company’s signature ad product is basically a “promoted tweet” which is similar to the regular but carries promotional images, links, and text. According to Interpublic Group’s executive director of a social media agency, James Douglas, the ad product on which Twitter has been working is not what the brand advertisers are on the lookout for more catchy style of advertising which might include interactive ads or videos.

According to eMarketer, Alphabet Inc.’s YouTube has garnered the largest share of U.S. video ad dollars at 20%, on the video front. However, the social networking giant, Facebook Inc., who has just started video ads in 2013 has gained momentum quiet rapidly. When the company posted its earnings, it showed a revenue jump of more than 50%, such boastful increase has been attributed to the advertisers’ videos.

Therefore, the San Francisco, Calif. firm is looking forward to enter into the revenue stream of ad videos. Meanwhile, around the fall, it is expected to start the live-streaming of the first of 10 National Football League games.

The terms of the deal between NFL purports that the company will have approximately 15 slots which it can use to sell commercials during each game. On Tuesday, the $10 billion company expressed that it has already closed an agreement with one of the major marketers to advertise    during live-stream. However, many major marketers are not endorsing Twitter’s statement and they have been reported to have cited that they are searching for other company to expend their dollars on.

eMarketer has reported that in the U.S. during the current year the digital video ad spending is likely to increase by 28.5% and reach at $9.84 billion. Twitter stands amidst strong rivals who are gunning to attract those dollars to them. According to Shelby Saville, president of innovation and investment platforms at Mediavest Spark –an ad buying firm –the Californian firm is “not yet at the forefront of the video content conversation and that is where the dollars are.” She underlined that the platforms like Snapchat, YouTube, and Facebook are the one on which the companies are planning to upload their video ads. Additionally, Twitter doesn’t have large number of users who could engage with the ad.

Last year, Coldwell Banker Real Estate LLC purchased San Francisco, Calif. firms promoted video ads but the users didn’t “engage” –meaning they didn’t share, view, or comment on the video –well enough to cover the marketing cost. However, Coldwell’s chief marketing officer, Sean Blakenship cited that the response had been much favorable on Facebook.

However, there are several brand advertisers who have been happy with their decision of using Twitter for promoting their products. Companies like Bank of America and Heineken NY have been quite successful while using Twitter’s promoted tweets.

The time will tell whether the company has been able to attract the brand advertisers or not. If it couldn’t then it is highly likely to see more fall in the revenue which will ultimately hit hard on the stock. As of now, at the market which closed on Friday, Twitter Inc. stock stood at a price of $14.61.

Yahoo Adds Four New Directors To Its Board

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In an attempt to avoid proxy fight the Internet company has given into the demands of one of its activist shareholders

After giving into the pressures of the activist hedge fund Starboard Value LP, Yahoo Inc. finally agreed to add four new independent directors to its board. Through the move, the company has halted the impending proxy fight supposed to break out during upcoming shareholder meeting.

The agreement clearly indicates that the board of the company along with the management had been subjected to immense pressure from the major shareholders to resolve the disagreements. According to the agreement, the hedge fund proposed to waive off the battle if the struggling Internet company were to add new directors with an immediate effect. Finally, Yahoo settled the battle and make way for the probable auction of its core businesses.

The company announced that the Chief Executive Officer of Starboard –Jeffrey Smith –along with three independent directors who are associated with Mr. Smith will become the members of the board with the immediate effect. These new directors were among the panel formed to threat the Internet company of overthrowing its entire board.

The negotiations had been going on between both parties and the parties spoke frequently in order to find a way which could avert the fate of the company off the hands of the shareholders, according to the sources familiar with the matter. According to Reuters, the source privy to the matter informed that both parties were set to have talks in March but the situation aggravated when Yahoo appointed two new boards members and the talks ended in deadlock.

The takeaway of the agreement is that Starboard’s CEO will also join the company’s strategic review committee which is supervising the company’s sale of the core business –something aggressively favored by Mr. Smith.

According to Eric Jackson, the deal only allows Mr. Smith to be part of the committee without giving him any board control. Mr. Jackson is the managing director at SpringOwl Asset Management –which is a fund that owns shares of the Internet company.

The company further announced that two of its directors –Sue James and Lee Scott –will vacate their positions at the annual meeting. After the inclusion of the four new directors, the Internet company’s board will comprise of 11 members.

Until now, no formal date has been announced by the company of its annual meeting however historically, the meetings have been held by the company during late June.

Starboard owns around 1.% of Yahoo and it has been quite vocal and aggressive regarding few changes which included the removal of some top officials including company’s CEO, Ms. Mayer.

Yahoo had had great performance to its credit but after the financial crisis of 2008, the company couldn’t uplift itself in a more positive way and it angered few of its activist shareholders –which include hedge fund heavyweights Daniel Loeb and Carl Icahn –over its performance.

The positive point for the company is that through this agreement, the company is most likely to put the costly and distracting proxy fight behind it. The Internet giant can now focus solely on the bidding of its core business which has queue of potential buyers including Verizon Communications.

At the market which closed on Wednesday, Yahoo Inc. stock stood at a price of $36.95.

Yahoo! Inc. Might Loose the Symbolic Ticker

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The search engine corporation

Yahoo! Inc. has been in the market for over two decades now making it one of the first internet companies; which makes it difficult to see it struggle in the market. After witnessing the situation that it is currently in, it becomes evident that technology companies need to keep pace with the changing dynamics of the tech world otherwise it would simply be left behind.

Marissa Mayer was appointed the chief executive officer of the search engine organization in 2012; and ever since then the company has been in hot water. Time and time again, she has tried to persuade the board that better days are right around the corner but has been unsuccessful in doing so.

The challenges that were being faced by the company got to a point where the best option seemed putting Yahoo on sale. The CEO made all the efforts to beat about the bush with the shareholders and direct them towards other alternatives but found herself at a hopeless dead end. It is quite surprising as to how a number of large firms are interested in the acquisition of the company despite of the struggles that are being faced by it. It clearly suggests that there is still enough for the acquirers to cash in on.

Presently, the list of companies that are interested in buying the search engine organization are mostly private equity firms. Additionally many believe that it would be a sensible decision on the management’s part to take the company private given the current dilemma.

The shareholders have been on the edge for quite some time now due to the misfortune of the technology company and would actually be open to the idea of privatization. A suitable example will be of Dell, as the CEO Michael Dell recently took the company private in partnership with Silver Lake Partners. It was worth $25 billion however it is debatable whether this was successful move by the organization.

Presently, Yahoo is in the public’s eyes, in case it decides to go private there is a greater chance for it to rectify its problems without making the headlines at the time. However it is still arguable without it would be a smart move by the company or not. Furthermore, if it decides to go forward with that plan, it will get enough room to work on new products with its head low in the game and away from the public eye – currently it is difficult for Yahoo to do so as the investors are always looking for short term gains which doesn’t give enough room to the company to improvise.

The management would need to do some serious convincing with the shareholders but since the move seems like the light at the end of the tunnel, they might just be on board with the idea.

Microsoft First Smartphone In FY16: Not That Impressive

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Lumia 650 seems to be another misery for Microsoft.

Microsoft Corporation has not been doing quite well when it comes to the smartphone business. However, Windows 10 is surfacing among a wider audience thus the company’s interest in standard apps to be present on all the platform makes a lot of sense.

Sadly, the company came up with the first smartphone that was running Windows 10 in 20016 known as the Lumia 650 which failed to garner traction since it was a low end smartphone that failed to highlight the potential of the brand.

Basically, the smartphone has a metal finish and is priced at $200 that has a 5-inch OLED display. Equipped with a 5 megapixel front and 8 megapixel rear cameras. The device is extremely light weight and is thinner than the iPhone 6s- which is certainly not its competitor. The company has spent time on giving the device a premium feel by equipping it with a polished, diamond cut and aluminum frame.

The device has the necessary add on which might intrigue an Apple or Android user to opt for the device. Moreover, it also caters to the needs of the corporate clientele with all the necessary features that make it perfect for enterprise use. It is also priced economically which can tempt all the consumers who want a cheap yet top notch smartphone.

Despite all the advantages and features of this smartphone, it still failed to lure consumer interest. By launching the Lumia 650, the company will not damage any of its rivals. This would have been fine if the company shared insights regarding the target audience of MSFT.

Although it caters to the needs of the enterprise sector but it still misses on certain core requirements that are essential for the corporate sector. The camera is also not on par with other Lumia products and the specifications are rather low end. However, the prices give another reflection altogether.

It won’t be wrong to say that Microsoft has left consumers baffled with this launch. The problem is not that the smartphone which is debuted falls under the category of a bad phone. However, the target audience of the brand is still not clear. A thin smartphone that runs Windows OS is fine but it wishes to sabotage Apple iPhone or Xiaomi is still unclear.

The company at this point of time seems to be extremely confused regarding what it really wishes to deliver. It is quite obvious that Microsoft wishes to redeem itself in the smartphone market but the first step that will contribute towards its success will be coming up with a streamlined strategy that ensures that they are on the right track.

Moreover, the target audience needs to be chalked out and catered as per their needs. Loading a phone with enterprise apps and low end specs will just further ignite the misery.

Thus, the solution to the company’s problem is a Surface Phone which belongs to a range that is said to be a game changer for Microsoft.

Netflix Binge Watch Can Reveal Seriousness Of Relationships

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On the basis of binge watching, Netflix’s survey can determine the commitment and seriousness of a relationship.

Netflix Inc. has made itself significant in almost everyone’s lives. Ever since it started to offer online video content services, it is allowing consumers to not only connect with the entertainment world but with people in their lives as well. Daily Mail says that the company plays an important role in most of the relationships. Last year, a phrase ‘Netflix and chill’ started to gain immense traction amongst the viewers and it was mainly used for a casual date.

Since then, the concept of ‘Netflix and chill’ has really taken over the minds of viewers and the company now promotes it as well considering its advantages. Now, the streaming company provides access to a great entertainment catalogue, which comprises of online movies and TV shows. According to a researcher, it is believed that it has become acceptable now as a casual date activity. It used its popular phrase in order to determine how its service affects the dating habits of users.

The company gathered 1,008 participants from its 40 million American users to take its survey. All participants aged between 18 and 29 and were asked a set of questions. Netflix stated that binge watching on its platform could easily reveal the seriousness of relationships among its consumers.

The survey asked users if sharing Netflix passwords with their partner means that the relationship is serious or holds no significance. More than half of the 1,008 participants believed that sharing passwords show that the relationship is serious. On the other hand, a few users refused to give up their account information to the other person until they are married.

Furthermore, almost 75% of the participants said that Netflix is now acceptable for casual dating purposes and it is being done now mostly. Almost 51% of the people also mentioned that sharing account information is like achieving a milestone in a relationship and it is similar to that of Facebook’s relationship status.

A fair number of people decided to stay ‘pure’ until they tie the knot with their partner. Nearly 17% of the participants refused to share credentials.

58% Netflix users surveyed feel that watching a movie or TV show on the streaming service with the person they are in relationship is not only a great method to save money but also strengthens the bond between them. Binge watching means to watch a series for long hours and staying up long hours with partner would surely ignite the spark in the relationship.

The survey concluded that the company could reveal seriousness about a relationship. It has had an impact on not only the individual lives but proved to be as significant in a relationship as well. The firm mentioned that one in every ten persons would choose to go out based on TV shows and movies preferences.

Netflix is massively growing across the globe. It provides services to 190 countries now having nearly 75 million subscribers from all over the world.

 

Facebook Inc. To Launch Data Center In Ireland

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The social media network is expanding its data center reach and next stop is Ireland.

Facebook’s next stop seems to be a small village in Ireland.

The social media giant announced over the weekend that it will be opening a new data center in a small village in Ireland. This data center will be built on a 227 acre area which will entirely be run on wind energy.

In a blog post, the Vice President of Site Operations Tom Furlong stated that by the year 2018 the site will be all set to handle web traffic. These data centers that the company has been opening all around the global clearly show that it handles way too much data. Currently there are data centers in Sweden, North Carolina, Iowa and Texas that manage all this data this crosses its network day in and day out. As of 3QFY15, the networking website had reported over 1.54 monthly active users. This will be the sixth location in which the social media network opens yet another data storage outlet.

This data center will be the second for the social media in Europe. The construction is expected to begin in the next few months and according to Facebook Inc. it will have top of the line technology making it the most efficient and sustainable place in the world. Since 2009 the social media has had its headquarters in Ireland which is led by Gareth Lambe who stated that he is quite exited for this investment. Additionally, he stated that with the investment of thousands of dollars put into the data center; it will be generating hundreds of jobs for the local community along with thousands of euros for the economy.

Presently, the cost of the project has not been revealed by the Site Operation’s president but according to VentureBeat, the data center in Fort Worth, Texas cost as much as $1 billion – so this project must be along those lines as well. Ever since the world moved towards the cloud computing technology; Facebook though it best to make its own location where it could store its websites data.

Despite of the fact that dealing with cloud storage is a tricky job but the social media is working on building reliable centers as it the website with a billion users cannot afford for the website to crash even once hence the major investment globally on these data centers. The website is following in the steps of Google – relying on its own cloud infrastructure for better productivity and increased efficiency.

A number of rumors have been circling around of Facebook opening a data center in Asia – according to the latest rumor, people were quite confident that the networking website will be opening one in Taiwan but after the weekend it was confirmed that Europe was the lucky continent.

On the other hand, the networking site has expected to report its earnings for the fourth quarter FY15 on January 27, 2016. Analysts remain quite optimistic about Facebook stock and are expecting that it will reveal improved results from the previous quarter. It is on its way to take over the virtual reality world as well with its Oculus Rift which, according to a number of people will release on March 28, 2016 – this launch is likely to up the game for Mark Zuckerberg’s creation.