Week in Review, 10 December 2011

December 10th, 2011
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by Trefis Staff

Below is a summary of the activity on Trefis during the past week that we thought you would find interesting.  Trefis is a financial community structuredtrefis-citigrouparound trends, forecasts and insights related to some of the most popular stocks in the US.  It provides the unique feature of allowing the user to model future valuation based upon projected changes in components of each business.  It also provides communication capabilities among members, including concensus of member analysis compared to Trefis staff analysis and blogging opportunities for members.

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Insights from the Week Technology, Media & Telecom

If Nokia can find success in the U.S., it could boost its stock and if DigiTimes’ report is a good indication of potential demand, this launch could be another catalyst for its stock ...

The Jobs Tab is essentially an add-on tool, which automatically distributes relevant company (employer) updates and job listings to a company’s Facebook page at no additional cost to the employer ...

For a company that generates such strong cash flows, the company’s addiction to acquisitions has led it to lever up an astonishing amount over the last five years ...

Research from Strategy Analytics indicates that Nvidia has slipped in the mobile application processor market and lost its earlier 5th position to Broadcom ...

The acquisition will add multi-channel ad campaign forecasting, execution and optimization capabilities to Adobe’s existing digital marketing offering ...

To stay on the conservative side, we assume the gross margins for NFL Sunday Ticket to be around 30%, an annual costs of $1 billion and gross margins of 30% imply total annual NFL Sunday Ticket revenues of about $1.43 billion ...

Oracle faced a minor defeat against Google in its patent infringement lawsuit related to the use of Java in Android. One of its key patents has been rejected ...

It has also enabled one-click sharing with SkyDrive, its cloud storage offering, for Office and added support for social networks like Facebook and LinkedIn to it ...

Cisco in the past year has focused on positioning Cius as a key component of its collaboration strategy, a $42 billion opportunity according to the company ...

Travelzoo is differentiating itself from group-buying sites like Groupon, Living Social and AOL’s Wow.com by leveraging its existing hotel relationships and offering higher-end deals ...

We believe that this huge subscriber base is what puts China Mobile in a better position to tap the growing smartphone demand than its rivals in the wireless market ...

The company acknowledged that the huge surge in demand was mostly due to the iPhone 4S, 1 million of which it had managed to activate in the first five days of its debut itself in October this year ...

Its decision to go with a smaller carrier first is also in sync with its risk-free plans as it doesn’t want to cause much of a concern to its well-placed rivals right away ...

While Oracle and Salesforce.com have been on an acquisition spree lately, SAP has tried the organic growth route – developing new applications and solutions in-house ...

Checks performed by analysts at Canaccord showed that the iPhone 4S was the best-selling smartphone for November at all the three top U.S. carriers, AT&T, Verizon and Sprint ...

AppExchange will now also host mobile apps for the iOS and Android platforms. It will showcase both HTML 5 mobile apps, as well as native apps for iOS and Android ...

It can be used by customers to refine their security strategies related to mobile device management, data loss prevention, encryption, authentication and mobile anti-virus software ...

RIM had announced a $300 discount across all models of the Playbook to reduce inventory stockpiling and drive sell-through to customers this holiday weekend ...

In a smartphone market dominated by contract buying, mobile operators could continue to have a strong say, especially since they have their own mobile payment platform to promote ...

With its sharpened focus on the tablet and smartphones as well as other connected devices, AMD should also keep its focus on the server business ...

The content among many players is more or less similar and the user interface and convenience as well as the ability to extend the experience beyond current live shows will matter the most ...

Windows 8 is expected to be Microsoft’s biggest launch in years, and one of its most crucial ones, as Windows accounts for nearly 25% of Microsoft’s Trefis price estimate ...

Amazon is also using a disruptive price strategy for promoting the Price Check, offering up to $15 in discounts to customers who download and enable the app on 10th December ...

According to a report, Apple owns about 85 to 90% of total mobile app spending. This is likely to be still more than 70% of mobile app revenue share for the next three or four years ...

Verizon plans to roll out Isis in a few markets next year, and hence it might be tempted to try and put a few speed bumps in front of Google by blocking Wallet service ...

The stock has jumped nearly 10% in the last two weeks, buoyed by a rise in the broader market as well as a series of new product launches which should impact its revenues positively in the coming years ...

While Yahoo’s leadership has been in question for a while, the recent lawsuit points to the more serious question of whether the board (including Jerry Yang) is placing its self-interest before that of shareholders ...

SuccessFactors will give SAP significant headway in the cloud computing software market, which every major enterprise software giant is trying to crack ...

We expect it to post strong numbers in Q4, but its stock has taken a massive hit in the past month, shedding nearly a third of its value ...

DemandTec has approximately 450 customers worldwide in retail, consumer products and other industries. It also has a portfolio of 31 patents in the areas of pricing, response analysis, and promotion analysis ...

It appears that there is a general concern among investors and analysts about rising competition and the ability of the company to be profitable ...

The new product aims to further close the gap between merchants and consumers by enabling the former to better manage their schedules ...

It seems like Cisco is finally able to bring about the desired operational efficiency as a benefit of its months long overhaul to save $1 billion through layoffs and asset sales are now beginning to show up in its results ...

It got to where it is by sticking to the formula of providing individuals and companies with a forum for buying and selling items ranging from cars to collectibles ...

NetApp, the third largest player in the external disk storage systems market, saw its share increase to 12% in the quarter, up from 11.5% in third quarter last year ...

Assuming that a tiered pricing is implemented and brings in more revenue per broadband subscriber, the company’s results could improve ...

Based on the implications of its credit rating, ADP actually provides a higher dividend yield than the U.S government as well. With a market price just over $50 a share, ADP’s dividend is close to 3% ...

While its software and enterprise focused portion of the business seems to be improving some, the vast majority of revenue still comes from low margin hardware ...

Launching Office on the iPad could lead to a potential decline in the sales of Windows 8 tablets as consumers flock to the iPad, which already has more than 100,000 tablet-specific apps and games ...

All signs continue to point to Sirius XM meeting or beating the 442,000 net subscriber additions it will need to attain to meet its guidance ...

With disk drives prices expected to rise in December and January as output from factories in Thailand to decline, NetApp’s revenue and/or margins are expected to take a hit ...

We believe this is a sensible move by Qualcomm as it strives to capture the growth opportunity in emerging markets where telecom operators have started to adopt the 3G technology ...

We believe the Sharp deal is Apple’s move to diversify its supply-chain as it looks to avoid a possible repeat of these issues next year. It will help Apple maintain its impressive iPad sales growth looking forward ...

As small business hiring picks up, the new iPad app puts Paychex’ payroll offering on equal footing with that of ADP’s, especially for customers looking for increased ease of use and anytime, anywhere ...

Cisco had once enjoyed near monopoly in a number of market segments where it no longer is the leader, so it’s going to be an interesting battle for market share between the two players ...

The ailing wireless provider has only $700 million in cash and short-term investments, which is barely enough for the company to meet its operational costs for the next year ...

The company further mentioned that half customers will not see a pricing change in the bills, implying that the rate increases will be applicable to certain programming packages ...

Disney announced that it will be increasing its annual cash dividend by 50%, up from 40 cents per share to 60 cents per share to be paid in early 2012 ...

In a survey by The Media Audit a couple of months back, Sirius XM’s listener time increased by 19% in the past three years as a sizable number of satellite radio listeners are tuned in to news, sports, and public radio ...

The legal battle between Apple and Samsung continues to intensify as both are looking to gain market share in the highly competitive mobile market ...

The low-power ARM Cortex-A8 processor platform (275 MHz to 720 MHz) is scalable and hence suited for many different industrial automation applications, enabling extensive reuse and compatibility ...

Considering the high quality of journalism New York Times is known for, it is somewhat justified that the company would not be willing to tolerate strong (or even erroneous) language in any forum ...

Given Chrome’s popularity, there is speculation that Google may not enter into an agreement with Mozilla to be the default search engine provider in Firefox, at least not at the price they paid last year ...

Curum Software is used by health and human services, workforce services and social security organizations around the world to deliver welfare, social insurance and both individual and employer based social programs ...

The new look is reminiscent of a “news feed” typical of social networks where users can easily personalize & customize the channels they have subscribed to and get the latest developments on their subscribed channels ...

The move, surprisingly, comes in tandem with a survey from PCWorld on ‘Desktop PC Reliability and Satisfaction’, in which HP’s business and home PCs performed poorly on parameters like durability and product support ...

The Biadu-enabled phone (powered by Dell) would be available at around 3,000 RmB, which is a competitive price compared to other high-end smartphone players in China ...

The AWS spectrum purchase will make the largest national wireless carrier even larger and make it even tougher for smaller wireless providers to compete effectively ...

Given the spate of new initiatives at Google, we believe Wallet will be a little more difficult to tackle and question whether or not Google has the stomach to be in a business that could be very difficult given Amazon’s experience in this arena ...

RIM is however not giving up on the Playbook as it is the only device in the market that runs on the QNX platform, which the company is betting its future on ...

AT&T’s desperation to secure its T-Mobile purchase exemplifies the dire need for spectrum that wireless carriers face and if its deal receives regulatory approval, Verizon will have scored a huge win ...

In the IP edge segment (edge routers and carrier Ethernet switches), which makes up 79% of the carrier router and switch market, Cisco expanded its share to 36.2% in the third quarter ...

Groupon might need to overhaul the terms and conditions provisioned for its merchants and customers, although it’s too early to speculate the exact impact of the OFT investigation ...

We expect Xbox 360 to have around 19% share in the gaming console market in 2011, and expect the share expand to more than 26% by the end of our forecast period ...

It has now unveiled the new Radian6 Social Marketing Cloud, which enables companies to monitor their social network presence and leverage social media to interact and engage with their customers ...

With its recent moves, and acquisitions like Efficient Frontier and Auditude, Adobe hopes to become one of the dominant players in digital marketing and analytics ...

It will offer improved motion sensing and voice recognition capabilities, and will also pack in enough processing power to lip read and gauge emotions of players based on their pitch, volume and facial characteristics ...

The report suggests that iPad will continue to dominate the tablet market with a market share of 66% while Kindle’s market share will increase to around 14% ...

The next versions of Microsoft’s Windows and Office will be compatible with tablets. Microsoft has already launched a cloud based version of Office – Office 365, to take on Google Docs ...

Microsoft has signed a protocol licensing agreement with AgreeYa Mobility, which should increase the usage of Microsoft’s enterprise offerings on other non-Microsoft platforms ...

Getting content for international expansion even though it will lead to losses may be the right move as it will position Netflix for long-term gains ...

DirecTV is taking a conservative approach to guidance and doing the right thing by warning beforehand that it may see a slowdown in growth due to Europe debt crisis and U.S. Presidential elections ...

We believe that iPhone 4S could surprise analysts when Apple announces its quarterly results in January next year. Apple suppliers gives a good indication of how Apple products are faring in the market ...

It seems that as Google Search has no near competitors, the company is increasingly shifting focus toward expanding its media offerings ...

The integrated offering will support both organic and paid search campaigns, and allow users to analyze their paid and organic campaigns using engagement and conversion metrics in a single detailed report ...

The prime concern with the AdMeld deal was that Google might be making the online advertising environment unfavorable for competition by building a big enough moat of resources to deter other companies ...

Disney’s most valuable asset is ESPN which contributes 28% to the company’s stock price and is greatly benefited by the NBA during the winter and spring each year ...

Windows 8, the next version of Windows, is expected to be Microsoft’s biggest release yet, bigger than even Windows 7 which sold nearly 500 million copies to date ...

 

(Trefis Pro Exclusive) Consumer, Retail, & Automotive

Daimler Rationalizes, Shuts Maybach to Focus on Mercedes December 9

We believe this can provide further upside to our price estimate not only as it cuts a decade of losses on Maybach but also as it boosts sales with concerted marketing efforts for the Mercedes brand ...

Target has a wide presence in the U.S. and risks self-cannibalization if it decides to continue expanding at the current rate, and hence it’s critical that the company focuses on diversifying its revenues ...

Shopycat uses social data to recommend items from Walmart.com, Walmart stores and other sites including RedEnvelope, Barnes & Noble and ThinkGeek ...

The dispute with pharmacy benefits manager (PBM) Express Scripts continued to weigh on the company’s sales as Express Scripts’ customers have already started looking at other drugstores to fill their prescriptions ...

Ford has outlined its focus upon emerging markets and Asia-Pacific region to drive its growth over the next ten years given the economic slowdown in developed markets ...

This move is in line with the string of measures taken by companies around the world as uncertainty looms over the health of the global economy ...

The company has now deployed a senior engineering team to develop changes for troubleshooting potential post-crash electrical fires and has established a Volt owner satisfaction program ...

As the highly promotional nature of apparel market continues, a value customer is in the lookout for best promotional deals without caring much about the brand ...

The yet-to-be-named Snacks portion of the business, which will include the chocolate, candy, and gum brands, currently comprises more than approximately 45% of the company’s stock price according to Trefis analysis ...

The shrinking user base could also be explained by the rising popularity of casual social games, which are luring gamers away from traditional MMORPGs ...

Pharmacy same store sales grew 3% with 1% more prescriptions filled by each Rite Aid store, despite a 160 bps negative impact from new lower-priced generic introductions ...

The company is likely to offload more of its food businesses like savory, dressings and spreads that provide it limited growth prospects to instead divert its resources to expand its fast-growing personal care business ...

The upgrade was in response to management’s continued efforts to reinvent its strategies from a new national re-branding campaign, to store upgrades and roll out of powerful online tools like ‘MyLowes’ to engage customers ...

The charges failed to deter the enthusiasm of the investors who see this stock rising in the long term despite the ever increasing taxes and a stringent regulatory environment ...

While Mercedes made impressive gains in the U.S. and China, the brand foundered in Germany which has traditionally been its largest market ...

Mulally, credited for Ford’s turnaround over the last 5 years, could be retiring from Ford within two years, leaving big shoes for the incoming CEO to fill ...

By engaging this target market online P&G is showing that it is thinking ahead on how to engage in target customers as well as promote another sales channel online ...

This is certainly a good time for Kraft Foods to launch new products. In a recent survey, Kraft was ranked as having the second most innovative equity with consumers ...

The latest Bureau of Economic Analysis data for July-September shows a 3% y-o-y increase in annual private residential fixed investment and expects Americans to spend about $340 billion on their houses next quarter ...

Half of the company’s skin-care business comes from anti-aging products, of which global anti-aging has emerged as the largest, most dynamic and fastest growing sub-segment ...

P&G opened a new detergent production plant in Peru last week, which will more than triple Peru’s production capacity and help deepen P&G’s market share in Latin American laundry market ...

P&G may consider a fresh search for buyers or revise its terms of agreement in light of the recent developments and plunging Diamond stock, that has lost 60% value last month ...

The in-store TV channel, known as McTV, is part of $2.9 billion that the company aims to spend in 2012 as part of its capital expenditure ...

The latest patent law shift from “first-to-invent” to “first-to-file” system will surely benefit Kimberly-Clark that relies on its product patents and strong product innovation pipeline to maintain its market share ...

Coca Cola Singapore is making efforts to reduce the weight of soda cans so that it uses less raw materials. Currently, all of its bottles and cans are recyclable ...

Higher customer traffic and strong domestic and international sales helped Costco to post better-than-expected same store sales in November surpassing 6.5% as predicted by the analysts polled by Thomson Reuters ...

Unilever may look to divest its regional food businesses and use the proceeds from the sale to fund acquisitions in the personal care segment ...

The U.S. energy drinks sector represents about $6 billion in annual sales, so a slight market share might still generate significant revenues ...

The fact that the company is under investigation by the SEC accused with possible violations of the Foreign Corrupt Practices Act has added to further complications in business recovery ...  

 

(Trefis Pro Exclusive) Financial Services

The company increased overall commercial rates by 4.6% in the U.S., with property-insurance prices rising by 8.8% and is also passing along more risk to reinsurers in the U.S. ...

As the holiday season is off to a good start, these arrangements hope to better serve customers while motivating them to shop more using their AmEx cards as opposed to cash ...

This lawsuit was filed by the Monaco-based investment firm in retaliation to the one filed by Deutsche Bank in early 2009, alleging that Sebastian Holdings owes the bank $245 million over a failed margin call ...

For 2012, the company expects operating earnings to be between $5.1 billion and $5.6 billion, again about 7% increase over the 2011 adjusted results ...

Apart from this push, BATS also plans to distinguish itself with lower fees and size requirements than the New York Stock Exchange and Nasdaq stock markets ...

Assets under Blackrock’s iShares and State Street’s SSgA declined by less than 5% this month compared to October 2011 while Vanguard and Schwab saw around 1-2% increase in their assets ...

The virtual tool will be available on its website and will present a customized list of coverage and information specific to insurance at different stages of life ...

The collaboration of mFoundry with MasterCard will enable more banks and credit unions to give their customers the option to pay for items using their mobile phones ...

This shake-up is definitely not what Goldman needs now; it is already under immense pressure from investors to bounce back from its rare loss in the third quarter ...

The current share prices hardly do justice to the value of the bank, which holds the distinction of being the largest custodian bank in the world ...

As markets across the globe cheered the developments in Europe with significant rallies to the various reference indexes, S&P warned that it may cut the credit ratings of 15 nations in the region ...

The plan includes steep budget cuts and a delay in the retirement of workers to rope in expenses, while introducing various taxes to help fill government coffers ...   (Trefis Pro Exclusive) Energy & Natural Resources

For the US market alone total installations in 2011 are expected to come in at 1.9 GW. However, the issue for the outlook for the US solar sector continues to be uncertainties regarding the policy environment ...

Chesapeake recently sold $750 million worth of shares in its Utica Shale Holdings to a group of private investors to fund the project development of the shale oil and natural gas deposit ...

Anadarko may look to sell part of its holdings in the offshore Mozambique gas fields, which are estimated to hold between 15 to 30 Trillion cubic feet (Tcf) of natural gas ...

The fact that the company was able to so easily complete a debt offering has raised questions regarding the Chinese government’s involvement ...

The ITC voted unanimously on a petition from German player SolarWorld that calls for tariffs to be placed on Chinese solar imports because the companies benefited from unfair government subsidies ...

The company has been asked by the new government to return to the country to continue its drilling plans that were part of a 2007 agreement with the prior regime ...

As its easy-to-extract resources are growing more scarce, the Middle East is looking to oil majors for help in developing its remaining resources ...

The company continues with its strategy of acquiring land and then re-selling it to third party buyers or investors for development of the projects ...

The move comes in reaction to the leak, which took place 70 KM offshore from the Brazilian coast and resulted in 3,000 barrels of oil leaking into the ocean ...

Duke has faced a lot of criticism in the past few weeks for its plan to pass on the incremental costs of development of the coal gasification unit at its Edwardsport plant to its customers ...

The U.S. International Trade Commission (ITC) launched a full-fledged investigation into a number of Chinese firms accused of benefiting unfairly from government subsidies ...

The move is also seen as the company’s latest attempt to focus on the high returns upstream exploration business by selling off downstream assets ...

Suntech cautioned investors that the tough industry conditions would continue for the next couple of quarters as the industry continues to battle with overcapacity ...

ConocoPhillips may see costs from its multi-billion dollar Australian LNG project escalate in the future as players compete for materials to complete $180 billion worth of projects by 2017 ...

The company plans to start an extensive exploration program in the region next year if it can win the required U.S. government permits to do so ...

 

(Trefis Pro Exclusive) Basic Materials

U.S.Steel has been having a rough time of late, battling a decline in demand from European customers as well as a potential decline in domestic sales ...

In 2010, it recorded revenues of over $10 billion and a gross profit of around $4.7 billion and had market share of over 14% in the global $40 billion semiconductor equipment manufacturing industry ...

In a recent update, the company has agreed to pay $200 million as penalties and other liabilities to resolve several criminal and civil charges related to the Upper Big Branch accident ...

Although the workers and the company were unable to reach a resolution on the wage hike demand, the workers were given assurance by the regional government of Arequipa ...

The move further strengthens the company’s strategy of backward integration, with an aim to optimize profitability and brace for potential price fluctuations ...

Once a center of North America’s copper operations in the 19th century, Michigan’s Upper Peninsula region has caught the attention of the mining giant Rio Tinto ...

Now the company has only two options here that either there is an amendment in the law or it finds a Canadian partner to operate the mine with ...

Vale plans to invest $6 billion in the expansion of its Moatize coal project in Mozambique in a bid to increase the output to 22 million tons from the initially planned 11 million tons ...  

 

(Trefis Pro Exclusive) Industrials & Transportation

November traffic gains barely aided recovery and the industry earnings forecast downgrade by International Air Transport Association (IATA) further weighed on the sentiment of airline stocks during the week ...

Delta is entering into a long-term exclusive commercial alliance with GOL to leverage its vast network in Brazil, an increasingly popular travel destination from the U.S and touted to be the leading engine for economic growth in Latin America ...

Halliburton spokesperson Beverly Stafford said that BP was trying to pull attention away from its own engineering mistakes that had led to the disaster, and that BP had withheld data that was needed to design the cement slurry ...

The settlement brings relief as a day’s strike during the on-going holiday shopping period would have been critical to the retailers and could have cost the economy billions of dollars ...

Some of these issues include the higher population density in European nations impeding the use of land and less available water, which is necessary for the hydraulic fracturing (or fracking) process ...

In the latest salvo against Halliburton, BP has accused the company of deliberately destroying and suppressing evidence to eliminate the risk of it being used against the company ...

By teaming up with carefully selected rivals, airlines can tap into competitors’ route networks while also pooling resources for everything from ticketing to labor ...

Caterpillar hopes to continue this trend going ahead into 2012 supported by strong demand for mining and machinery equipment from emerging markets such as India and China with expanding urbanization ...

The company’s performance fell short of our estimates which were based on the assumption that it would effectively exploit the synergies in operations from its acquisition of BJ Services last year ...

UPS has increased capacity on flights between Asia and North America after determining that a Q3 slowdown in volumes was an isolated occurrence ...

Though less worrisome than the pay row which felled American Airlines, the dispute has already undermined operations and risks derailing future merger bids ...

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