Barclays Capital hardware analyst Ben Reitzes today opines that PC makers need to rethink their business, because just taking market share or expanding profit margin through better component pricing will not be enough to improve their stock prices.

He’s really talking about Dell (DELL) and Hewlett-Packard (HPQ), which trade at 9 times and 8 times projected EPS, respectively.

What should they do? Reitzes offers some things to consider, without explicitly endorsing anything:

Shift from Intel (INTC) microprocessors to chips based on ARM Holdings (ARMH) designs. Those chips might cut processor cost by a third, which would save $25 per PC, 5% of the total cost of the machine, and would add 55 cents a share to HP’s annual profit and $0.45 to Dell’s profit, roughly 10% and 20%, respectively, of their total annual profit.

Switch from Windows to Chrome. Microsoft’s (MSFT) software is $75 per desktop and notebook, on average, for the vendor, and $50 for the average consumer PC. Switching to Google’s (GOOG) “Chrome” OS would save $45, 10% of the bill of materials. That would add $1 extra in profit per share per year for HP, and add 80 cents to Dell’s annual EPS.

HP has the added option of expanding its Web OS software to the PC from the smartphones and tablets it has announced, something it hinted at back in February.

Although Microsoft said at the Consumer Electronics Show in January that it will bring the next Windows (presumably version to ARM chips, this is more of a rearguard action on Microsoft’s part, Reitzes argues, a step that was only taken after the company had been “blindsided” by “the impact of the iPad, the ascent of [Apple's (AAPL)] iOS, and Android as de-facto mobile device platforms, and the inability of Intel to produce a low-cost, low-energy consuming processor.”

Hence, Windows on ARM faces issues, he thinks, even if it continues to dominate unit shipments: “There would be some question as to pricing and Microsoft’s ability to still command $50 per Windows license if overall costs of hardware were to come down by the savings of moving to an ARM processor.”

And, drum roll please …. “We believe that Apple will be the first in our sector to embrace ARM for some Macs, as early as C2H12,” writes Reitzes, with a nod to speculation last week Apple may ditch Intel chips for ARM chips.

We believe that Apple is already working hard on the software to accomplish this feat within the MacBook Air line-up. Through its own development of ARM-based processors and ARM-based iOS software, this migration would be rather natural for Apple. Apple is already moving toward enhanced battery life and ultra portability with its current MacBook Air line, which uses NAND instead of HDDs.

And since you’re probably wondering, no, there is no mention in the note of Intel’s momentous announcement last week of its “Tri-Gate” process technology, which even some bears on Intel stock think could give it an edge on ARM-based chips. A curious omission, on Reitze’s part, to be sure.

In any event, for a different perspective on Intel and Apple, see Piper Jaffray’s Gus Richard’s note this morning.

Article courtesy of Tech Trader Daily

Wedge Partners analyst Brian Blair this morning offers some hopeful, encouraging thoughts on both Nokia (NOK) and Research in Motion (RIMM) as the two pursue overhauls of their smartphone repertoire.

In the case of Nokia, Blair writes that his “checks” (he doesn’t specify, though I have a call in to his office to clarify) suggest that the company may introduce its first smartphones running Microsoft’s (MSFT) software sooner than expected. Blair thinks Nokia will host a “Nokia World” conference, which it does annually, sooner than usual. I’m not quite sure what he means, because he mentions a date of mid-October as being “earlier than usual,” when in fact Nokia World 2010 was in September of last year, in London.

In any event, Blair writes that the company’s “ahead of schedule in terms of development,” and he thinks the show could be used to debut Microsoft-powered handsets.

As for the big picture, “While we continue to feel the next three to four quarters will reflect the company’s transition away from the Symbian OS and show a marked drop in quarterly units for Nokia, we remain positive on the longer-term outlook for Nokia given the Microsoft partnership,” writes Blair. “It is our view that Nokia Window’s smartphones will become the fourth major player in the smartphone space, following [Google (GOOG)] Android, Apple’s (AAPL) iOS and RIM’s Blackberry OS.”

As for RIM, Blair was at the company’s “BlackBerry World” event in Orland, Florida this week and came away impressed with the “9900” version of the BlackBerry Bold that was introduced.

The device has a 1.2 GHz Qualcomm (QCOM) Snapdragon chip that is incredibly fast. The price of this chip is likely 2x that of Marvell’s however and is likely to create gross margin concerns. We moved through every application in our test and there was no lag, no hourglass icon telling us to wait, it was speedy in every way. Leaving Marvell [Technology Group] (MRVL) behind is good news for users. The company’s use of the term “liquid graphics” is legitimate. The transition between apps and opening apps and just generally navigating around the device is smooth in an iPhone-like manner.

Nokia shares today are down 9 cents, or 1%, at $8.52. RIM shares are up 71 cents, or 1.5%, at $48.08.

Article courtesy of Tech Trader Daily

US Weighs Summer Sale Of GM Stock (WSJ)
To break even, the U.S. Treasury would need to sell its remaining stake—about 500 million shares—at $53 apiece. GM closed off 27 cents a share at $29.97 in 4 p.m. trading Monday on the New York Stock Exchange, hitting a new low since its $33-a-share November initial public offering. “Planning for the sale of our remaining GM stock is still at an early stage, and the IPO lock-up does not expire until late May,” a Treasury spokesperson said. “At that point, we will consider all of our options, based on our twin goals of protecting taxpayers’ interests and exiting as soon as practicable.”

Obama administration officials tried to keep S&P rating at ‘stable’ (WP)
Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits, a Treasury official said. They argued a change in ratings was not needed at this time because the debt was manageable and the administration had a viable plan in the works, the official said.

IMF’s Blanchard Says US Lacks Deficit Plan (Reuters)
“There are reasons to be worried. The United States lacks a credible plan, for the medium term, to reduce its budget deficit,” Blanchard said.

Justice Department Seeks Data In Nasdaq-NYSE Anti-Trust Review (Bloomberg)
Antitrust review is emerging as a key test in the battle for the 219-year-old market, which Nasdaq OMX Chief Executive Officer Robert Greifeld tried to snatch away from Deutsche Boerse with an $11.3 billion offer on April 1. Giving Nasdaq control would create a monopoly in listings, a prospect that may create undue risk the takeover will be blocked, according to NYSE CEO Duncan Niederauer.

Congress Mulls Budget Deal Forcing More Taxes, Spending Cuts (Bloomberg)
Proposals being circulated among the bipartisan “Gang of Six” Senate negotiators, and about 20 other lawmakers in both chambers, would set deficit-cutting targets, according to people familiar with the plan. They would impose automatic, across-the- board spending reductions and higher taxes if Congress failed to meet the goals.

Freshman Republican’s bind: Vote convictions or help economy by rising debt limit? (WaPo)
“I desperately want to vote ‘no,’ ” Rep. David Schweikert said at the town hall. “I also desperately don’t want [the economy] to crash.”

Bank of America Merrill Lynch to Exit Private Equity Business (CNBC)
The unit, BAML Capital, has not been particularly active in recent months, having made its last investment in the fall of 2010. Bank of America, under pressure to conserve capital, has apparently decided it could no longer provide capital to the unit, which has roughly 35 professionals. A Bank of America spokesperson said BAML Capital is being spun off, and will be run by the current management team. The team will continue to manage the $5 billion in assets owned by BofA. Those assets will remain on the bank’s books, with expecations they will be monetized.

London Skyscraper Boom Ends as City Goes ‘From Vanity to Sanity’ (Bloomberg)
“The age of bling is over,” said Shuttleworth, who led the team at Norman Foster’s firm that designed the seven-year- old tower in the City of London financial district. He said it would never get off the ground today. “Money now drives everything, so if you can build something for half the price, you will,” he said.

Mubarak clinically depressed in hospital, officials say (NYP)
Doctors said the ousted leader spends all day in bed and is eating very little with his wife Suzanne by his side, the official added.

Facebook Seeks Friends In Beltway (WSJ)
Until lately, Facebook has spent very little money in Washington, even by Silicon Valley’s frugal standards. The company’s outlays on lobbying totaled $351,000 last year, federal records show. That’s a fraction of the amount spent by other technology giants, including Google Inc.’s $5.2 million and Microsoft Corp.’s $6.9 million. Facebook’s new Washington office, designed to look like a hacker’s lair, with walls of faux construction rubble, is a work in progress. People familiar with the company’s plans said talks to hire former Obama press secretary Robert Gibbs to guide the company’s communications strategy, including with Washington, have fallen apart in the wake of a leak to the media that made a deal for him to join the company sound imminent.

China Speed Yuan Push (WSJ)
A senior Hong Kong monetary official told The Wall Street Journal on Tuesday that China’s central bank is “actively considering” new rules that would make it easier to bring yuan funds raised offshore back onto the Chinese mainland.

Leader of Big Mortgage Lender Guilty of $2.9 Billion Fraud (NYT)
After more than a day of deliberations, a federal jury in Virginia found Lee B. Farkas, the former chairman of Taylor, Bean & Whitaker, guilty on 14 counts of securities, bank and wire fraud and conspiracy to commit fraud. Mr. Farkas, 58, faces decades in prison for his role in the $2.9 billion plot, which prosecutors say was one of the largest and longest bank fraud schemes in American history and led to the 2009 collapse of Colonial Bank.

Goldman Luster Fades On Revenue Worries (NYP)
“There’s a possibility that at least over the next six months the bank will have weak earnings,” said Rochdale Securities bank analyst Dick Bove, who cut the firm’s shares to “neutral” from “buy.”

Article courtesy of Dealbreaker

Today’s funding announcements include new solutions for shopping, reading and computing:

Decide gets $6M for eCommerce company: The Seattle-based company has raised a second round of funding led by Maveron with participation from Madrona Venture Group and angel investors. The site, still in stealth mode but expected to go live this spring, was co-founded by Oren Etzioni, founder of airfare prediction service Farecast, and is “bringing unprecedented transparency to electronics shopping.”

Byliner raises $935K for new nonfiction destination: The company behind Byliner.com, a site offering archives of nonfiction writing, has raised a round of seed funding led by Freestyle Capital and SoftTechVC with participation from other investors. The site, which will officially launch in May, plans to offer its users recommendations and discussion forums for nonfiction work. The site will also distribute Byliner Originals, nonfiction pieces published in digital form by Byliner. The company is based in San Francisco.

IO Turbine brings in $7.75M to improve virtualized computing performance: The San Jose-based software company has raised a new round of funding led by Lightspeed Venture Partners with participation from Merus Capital and angel investors. Founded in December 2009, the company has partnered with VMware and Microsoft and is working on a solution to address I/O bottleneck issues by using Flash technology.

Companies: Byliner, Decide, farecast, Freestyle Capital, IO Turbine, Lightspeed Venture Partners, Madrona Venture Group, Maveron, Merus Capital, Microsoft, Softtechvc, VMWare

People: Oren Etzioni

Article courtesy of VentureBeat » deals

Bamboom Labs announced yesterday that it has raised $4.5 million in seed financing for developing technology that allows consumers watch live TV over the Internet. New York-based FirstMark Capital led the round, also participating were High Line Venture Partners, SV Angel, First Round Capital, and Highland Capital Partners.

Bamboom Labs is headed by Chaitanya “Chet” Kanojia who’s last startup Navic Networks was acquired by Microsoft in 2008.

The company’s technologies allow customers to access free over-the-air broadcast signals over the Internet and direct it to connected devices.

The team includes people from Navic and Microsoft as well as RF and digital technology engineers from Andrew Corporation, Lucent and others.

Copyright laws make distributing the TV programming over the Internet quite tricky. There needs to be some creativity from Bamboom’s side. The company cannot just redistribute the TV signal over the internet without facing the wrath of copyright holders. That means Bamboom would need to license content to retransmit it over the net — a costly and complicated process that even Google has had trouble with.

Bamboom’s way around copyright issues at the moment is to rent a personal antenna to the customer. That way the customers, not the company, are responsible for recording and retransmitting. And that should take care of the issue, LA Times reports.

Tags: Internet TV, Seed financing

Companies: Bamboom Labs, First Round Capital, Firstmark Capital, High Line Venture Partners, Highland Capital Partners, SV Angel

People: Chet Kanojia

Article courtesy of VentureBeat » deals

Could GameStop (GME) be the next Netflix (NFLX)?

The company is facing a similar digital transition as it invests in new platforms to complement its packaged media and leverages proprietary information to offer the right content at the right time, according to research by Janney Capital Markets.

With this in mind, Janney analyst Tony Wible sees 10 reasons to own GameStop:

1. Loyalty: GameStop added over 8 million users since its October debut, allowing it to leverage this data to boost digital efforts and improve profitability.

2. Digital Investments : Kongregate, Spawn Labs, Impulse, and Gamestop.com allow GameStop to address the four areas of digital gaming : social/mobile, console/PC streaming, downloads and DLC.

3. Hardware Trojan Horse: Leveraging its refurbishment expertise, GameStop is now planning to refurbish tablets, adding a new product SKU and allowing it to establish an installed base for its digital products.

4. New Product Cycle: The release of the Nintendo 3DS and upcoming launch of Sony’s NGP could generate 14 cents per share in the first year and set the stage for morel growth. A new Microsoft device could be announced at E3 for 2012.

5. Cash Flow and Buyback: The company has purchased 17.7% of its shares in the past 15 months and is on pace to purchase an additional $100 million per quarter.

6. LBO Potential: With its low debt ($250 million), stable free cash generation (greater than $400 million per year), and low valuation,  GameStop could be taken out at a $30 price point and still generate almost 40% internal rate of return for a private equity buyer.

7. Riggio Overhang and Management Responsiveness: Leonard Riggio has liquidated most of his GameStop position, which reduces annual selling pressure on the stock. New management has been more responsive to shareholders.

8. Short Ratio: With a 26% short ratio, quite a few short sellers are already loosing money on the trade and eventual cover could provide a boost to its share price.

9. Holder Concentration: The top 15 holders own 72% of the company and 66% have increased their position in the past year, which could force a short squeeze.

10. Technical Break-out: According to Janney’s Technical Analyst, Dan Wantrobski, GameStop’s formation could result in a break-out and reach the $26 to $28.

GameStop closed up 6.5% at $25.36 and is trading flat after-hours.

Article courtesy of Tech Trader Daily

Google (GOOG) led the U.S. explicit core search market in March with 65.7%  market share, according to data released by comScore.

The search giant’s market share represents a 0.3% gain over February.

Google’s performance was followed by Yahoo (YHOO) sites with 15.7% and Microsoft (MSFT) sites with 13.9%. Those numbers represent a 0.4% decline for Yahoo and a 0.3% increase for Microsoft.

Ask Network accounted for 3.1% of explicit core searches, followed by AOL (AOL) with 1.6 percent.

According to comScore, explicit core search “excludes contextually driven searches that do not reflect specific user intent to interact with the search results.”

More than 16.9 billion explicit core searches were conducted in March. Google ranked first with 11.1 billion searches, followed by Yahoo with 2.7 billion, Microsoft with 2.4 billion, Ask Network with 520 million and AOL with 272 million, comScore said.

Google, which reports earnings tomorrow, closed up 1% at $576.28.

Article courtesy of Tech Trader Daily

Microsoft (MSFT) introduced a new version of its Windows Phone software that allows users to operate multiple programs at once and look up information on items by looking at them through the phone’s camera.

The company, which unveiled the software at a developer conference today, said in a statement that the software would appear on phones later this year.

Microsoft needs the new features to help it compete with popular operating systems from Apple (AAPL) and Google (GOOG).

The company is also hoping to get more developers to create applications for the new software. Microsoft said tools to facilitate that development will become available in May.

Shares of Microsoft closed flat at $25.63.

Article courtesy of Tech Trader Daily

Nokia (NOK) said Tuesday it is releasing two new smartphones, which will operate on an updated version of its Symbian operating system.

The announcement follows an agreement between Nokia and Microsoft (MSFT) in which the Finnish company agreed to use Microsoft’s Windows operating system on its new line of handsets.

But Nokia will continue to sell smartphones with the Symbian system as it transitions to Microsoft, and the updates should help it close the gap with mobile software rivals such as Apple (AAPL) and Google (GOOG).

The updated software has new icons and features such as improved text input, a faster browser and a new maps app.

The two new smart phones, Nokia E6 and Nokia X7, are targeted at business people and entertainment enthusiasts respectively.

Some forecasters are saying that Google’s Android platform will surpass Nokia’s Symbian as the most popular operating system globally this year, but Nokia is apparently on the defensive.

“With these new products and more Symbian devices and user enhancements coming in the near future, we are confident we can keep existing Nokia smartphone customers engaged, as well as attract new first-time and competitor smartphone users,” said Jo Harlow, head of Nokia’s Smart Devices business in a statement.

American depositary shares of Nokia are down 0.9% at $8.95 in early trading.

Article courtesy of Tech Trader Daily

Following on last week’s report by IDC that predicted 45% of the smartphone market may belong to Google’s (GOOG) Android operating system by 2015, research firm Gartner, not to be outdone, this morning offers that Google may have 48.8% by that date, up from 38.5% this year, running 539 million units out of about 1.1 billion units sold in 2015.

Gartner pegs Apple’s (AAPL) iOS at third place by that time, at 17.2%, down from a possible 19.4% this year, despite selling in higher absolute volume, at about 190 million units in 2015.

And Gartner joins IDC in predicting that the alliance between Nokia (NOK) and Microsoft (MSFT) will give Microsoft’s Windows Phone software second place behind Android, with perhaps 19.5% of the market by 2015, up from just 5.6% this year, and ahead of Apple’s share.

Research in Motion’s (RIMM) BlackBerry OS will have slipped to 11.1% by that time, from 13.4% this year, putting it in fourth place.

Article courtesy of Tech Trader Daily