Tag Archives: Cuts

Haven't We Seen This Movie Before? Ignore Rumors Of iPhone Production Cuts
June 9, 2018 6:02 pm|Comments (0)

Apple’s shares were down almost $ 2, or 0.9% on Friday to $ 191.70 while the NASDAQ was up 10 or 0.14%. At the low point, the company’s shares were down almost $ 4 or 1.9%. The main driver for the stock’s weakness was a report from Nikkei Asian Review that the company would order 20% fewer new iPhones to be built vs. last years 100 million iPhone 8, 8 Plus and X orders.

Apple CEO Tim Cook speaks during the 2018 Apple Worldwide Developer Conference (WWDC). Photo by Justin Sullivan/Getty Images

The report from Nikkei says “For the three new models specifically, the total planned capacity could be up to 20% fewer than last year’s orders” and “The U.S. company last year placed orders to prepare for production of up to 100 million units of the new iPhone 8, iPhone 8 Plus and iPhone X, but this year Apple currently expects total shipments of only 80 million units for new models, two people said.”

There are a few unknowns from the report, which could make for an apples to oranges comparison.

  • Does the order timeframe match the same months as last years?
  • Does the 80 million match what was initially ordered for the 8, 8 Plus and X (which was reported to be decreased) or the final tally?
  • The report also says “could be up to 20%”

There are a few reasons to be skeptical of this report .

  • Over the years many production cut rumors have turned out to be false
  • Earlier this year there were multiple reports, including from Nikkei, that the production for the iPhone X had been cut, which turned out to be incorrect or misleading to Apple’s results
  • Depending on what new models are introduced, demand for older models including the 8, 8 Plus and especially the X could still be strong enough to make up for what is being implied as lower total sales

I don’t believe Nikkei has the best track record scooping Apple’s iPhone production and eventual sales . It was just on January 30 this year, two days before the company announced its December quarter results, that it predicted that iPhone X production would be cut by half for the March quarter.

When Apple announced its December quarter results the iPhone inventory levels were at the low-end of its 5 to 7 weeks target, and the March quarter revenue guidance of $ 60 to $ 62 billion bracketed the $ 61 billion estimate. The stock initially fell but after a week rallied and climbed above the price when Nikkei came out with its article.

Add to that Tim Cook saying the X had been the best selling iPhone “each and every week in the March quarter, just as they did following its launch in the December quarter.” These didn’t match well with an iPhone X cut.

All new iPhone models could be available in September

The Nikkei report included “Apple’s supply chain was told to prepare earlier for the two OLED models, in hopes of avoiding a delay similar to last year’s, two industry sources said.”

This actually makes sense. I’m not surprised that the iPhone X’s availability was later than the 8’s due to incorporating an OLED screen. Just because the iPhone’s cadence has essentially been every 12 months doesn’t mean that production systems can meet that timeframe when new technology is introduced. Now that Apple’s production partners have experience with manufacturing tens of millions of OLED iPhones, moving to the next version shouldn’t be as challenging.

Tim Cook’s warning

Even back in 2013, Tim Cook warned investors about putting too much credence into supply chain checks. On the January 2013 financial results conference call, he said, “I suggest its good to question the accuracy of any kind of rumor about build plans. Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant to our business. The supply chain is very complex and we have multiple sources for things. Yields can vary, supplier performance can vary. There is an inordinate long list of things that can make any single data point not a great proxy for what is going on.”

StockCharts.com

3 year Apple stock chart

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Fingerprint Cards announces new cost cuts amid weak market, price pressure
June 4, 2018 6:00 am|Comments (0)

STOCKHOLM (Reuters) – Swedish biometrics firm Fingerprint Cards on Monday announced a new round of big cost cuts on the back of weak market conditions for capacitive sensors for smartphones and heavy price pressure.

The company said it expected the new cost cuts to yield savings of 350 million crowns ($ 39.8 million) on an annual basis, with full effect at the end of the fourth quarter.

Fingerprint Cards said it will cut around 179 staff, and the restructuring costs are seen at 65 million crowns, which will mainly be taken in the third quarter.

“We are continuing to adapt our operations to the fundamental and rapid change in business conditions, with the objective of returning to profitable growth,” Fingerprint Cards Chief Executive Christian Fredrikson said in a statement.

“The cost reduction measures we are communicating today are important in order to strengthen our competitiveness,” he added.

The company also said it would make an inventory write-down of around 336 million Swedish crowns and a 143 million crown write-off of capitalized research and development (R&D) projects.

During the first quarter of 2018, Fingerprint Cards implemented another cost reduction program, seen generating cost savings of 360 million crowns this year.

Fingerprint Cards’ shares are down 60 percent so far in 2018 year on the back of rapidly falling sales and earnings.

Reporting by Johannes Hellstrom

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Apple cuts smartphone power chip orders from Dialog Semiconductor
May 31, 2018 6:01 pm|Comments (0)

FRANKFURT (Reuters) – Dialog Semiconductor said Apple now planned to source the main power management chips (PMICs) for one of its three new iPhone models from two suppliers instead of just from the German chipmaker.

FILE PHOTO: Dialog semiconductor logo is pictured at a company building in Germering near Munich, Germany August 15, 2016. REUTERS/Michaela Rehle

That means that Apple will order 30 percent fewer of the chips from Dialog this year than it had initially expected, Dialog said in a statement on Thursday.

The news sent its shares 3.9 percent lower in late Frankfurt trade. Dialog’s stock has lost more than half of its value over the past year on investor concerns that Apple is working on its own battery-saving chips for iPhones.

Analysts reckon Dialog derives more than half its revenue from supplying Apple with PMICs.

The reduced order volume for the PMICs will shave 5 percent off the chipmaker’s 2018 revenues, but Dialog said it still expected its 2018 revenues to grow year-on-year.

The impact on 2019 revenues is likely to be similar, Chief Executive Jalal Bagherli told analysts on a conference call.

He said Apple had not provided a reason for the change in its sourcing of chips.

“If you think about the fact that we are qualified for all three phones, that means there is no performance-related issue. It might be a statement of intent to reduce risk on having one supplier and have an alternative source,” he said.

He also said Apple had not told him who the second, new supplier of the main PMICs was but said he saw it as very likely that it was an in-house source at Apple.

Apple did not change the projected order volume for the other power management chip that Dialog is supplying for the new iPhone models – the sub-PMIC – nor for all other PMICs, including those for tablets, wearables and notebooks.

Dialog said it would continue to explore new mixed-signal opportunities outside of power management for future Apple products.

Reporting by Maria Sheahan; Editing by Adrian Croft and Alexandra Hudson

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This is How Small Business Owners Can Take Full Advantage of the Tax Cuts and Jobs Act
April 13, 2018 6:00 am|Comments (0)

Tax time is no one’s favorite time of year. But for small business owners, this year’s filing deadline at least comes with the promise of better rates ahead: Many of the changes included in the Tax Cuts and Jobs Act, passed by Congress in December, are going into effect.

As entrepreneurs, we should expect to benefit–at least, temporarily–from the new tax plan. My company, Manta, conducted a poll in January and found that 83 percent of business owners anticipate their companies will be positively impacted by the changes. Nearly as many, 80 percent, said they support the Tax Cuts and Jobs Act.

Some are already feeling the benefits of having more money in their pockets, according to another poll we conducted last month. 34 percent of small business owners said their business income had increased as a result of the tax reform, just three months into the year. 42 percent have already changed their budgeting or financial planning because of the new tax law.

It’s time to start preparing for the changes–if you haven’t already.

For the most part, the provisions of the Tax Cuts and Jobs Act that benefit small businesses go into effect this tax year — meaning they won’t impact the returns that are due this month. 

The 58 percent of small business owners who have not yet adjusted their budgets should get started, however. While that big refund check may be a year away, it’s not too early to plan accordingly and make sure you take full advantage of the potential savings. 

The first step is to review your company’s legal structure and determine how it will affect your taxes. One of the most important changes in the new tax law allows pass-through entities (such as S corporations and LLCs) to deduct up to 20 percent of their business income.

However, this doesn’t apply to certain professional services firms. Review your situation with a tax professional or attorney–you might be able to adjust your business structure to take advantage of this deduction. 

Make the most of your company’s tax savings.

The Tax Cuts and Jobs Acts allows businesses to immediately write off the full cost of new equipment and other property, instead of depreciating the expense over five or more years. The new law also protects these write-offs from being rescinded in the future. 

This is great news for business owners who want to invest in their growth. According to our polls, 28 percent of small business owners plan to use their tax savings to invest in new technology and 21 percent plan to open a new location or expand. The immediate write-off should make these investments (and your cash flow) much more manageable in the short term.

Just check with your tax advisor before making a major purchase–you could run into unforeseen obstacles. For example, the depreciation rules for “heavy” SUVs–those with a gross vehicle weight above 6,000 pounds–are different than for light trucks and vans. You want to be prepared for the potential impact on your taxes.

Streamline your expense tracking and tax prep.

Make sure you accurately track and document all business expenses. Our polls found that 21 percent of small business owners still use paper receipts to track expenses.

Think about that for a second. It’s messy and inefficient, and you risk losing receipts or miscategorizing expenses.

Hiring a pro is probably the best way to ensure that you take full advantage of the new deductions and stay on the right side of the law. The U.S. tax code is confounding to even the most experienced business owners–20 percent of poll respondents told us they didn’t understand all the deductions available to them. Whatever else Congress accomplished with the Tax Cuts and Jobs Act, they definitely didn’t simplify things.

Use a mobile application or accounting software to scan and save digital copies of your receipts and categorize the expenses. Then, when tax time rolls around, you can output a well-organized report or import the data directly into your tax prep software. And if you use an outside accountant or tax preparer, they’ll greatly appreciate you providing a digitized expense report instead of handing over shoeboxes full of paper receipts.

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Microsoft cuts deals in China with government organizations and companies
January 31, 2016 9:35 am|Comments (0)

Microsoft announced three new tie-ups in China on the same day that the country’s President Xi Jinping and a delegation visited its campus at Redmond, Washington.

The seven deals with Chinese companies and government institutions will likely give Microsoft greater access to the country’s large market. Other companies like Cisco Systems and Hewlett-Packard have also announced ties with Chinese companies, a market that has been proving complex for U.S. companies because of the strong backing of the government for local players.

Microsoft, for example, announced an agreement with its cloud partner in Beijing, 21Vianet, and IT company Unisplendour to provide custom hybrid cloud solutions and services to Chinese customers, particularly state-owned enterprises.

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Microsoft cuts deals in China with government organizations and companies
January 28, 2016 3:25 pm|Comments (0)

Microsoft announced three new tie-ups in China on the same day that the country’s President Xi Jinping and a delegation visited its campus at Redmond, Washington.

The seven deals with Chinese companies and government institutions will likely give Microsoft greater access to the country’s large market. Other companies like Cisco Systems and Hewlett-Packard have also announced ties with Chinese companies, a market that has been proving complex for U.S. companies because of the strong backing of the government for local players.

Microsoft, for example, announced an agreement with its cloud partner in Beijing, 21Vianet, and IT company Unisplendour to provide custom hybrid cloud solutions and services to Chinese customers, particularly state-owned enterprises.

To read this article in full or to leave a comment, please click here


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Microsoft cuts deals in China with government organizations and companies
January 25, 2016 8:00 am|Comments (0)

… with Xi’xian New Area, a special development zone, on a variety of projects including big data, cloud computing and “smart” urbanization.


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