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IBM has a tough week

Paul Booth
By Paul Booth
Johannesburg, 27 Oct 2014

IBM's disposal of its chip business and its poor financial results dominated the international ICT market last week.

At home, the acquisitions by Dimension Data and Vox Telecom were the main stories in a quiet week.

Key local news

* A positive trading update from MTN that shows a 2% subscriber growth in the latest quarter.
* Dimension Data acquired Agile Business Solutions, an Oracle consultancy that focuses on Peoplesoft and Oracle HCM; and Xpedia Fusion, an Oracle ERP and business systems provider.
* Vox Telecom bought Computer Initiatives and Two IT, both of whom specialise in consulting and solutions in Microsoft Dynamics and business applications.
* A tribunal of independent arbitrators has ruled against Turkcell regarding its claim that MTN acted illegally in order to have the Iran GSM licence awarded to it.

* A new JSE cautionary by Adapt IT.
* The appointment of Graham Parker as MD of 3fifteeen.

Key African news

* Good quarterly figures from Millicom International Cellular, with revenue up 21% and EBITDA up 12.7%.
* Econet Wireless Global purchased VimpelCom's operations in Burundi and the Central African Republic for $65 million.

Key international news

* Citrix Systems acquired RightSignature, a cloud-based electronic signature company.
* Datalink bought Bear Data Solutions, an IT solutions provider.
* Deezer, a French music-streaming firm, purchased Stitcher, a talk radio and podcast service provider.
* EMC acquired much of Cisco's stake in their joint venture, VCE.
* Canadian Mitel Networks bought ShoreTel, a smaller US rival, for $540 million.

Google (Nest) purchased Revolv, a smart home gadgets start-up.
* Nihilent Technologies acquired GNet Group, a US-based BI and SharePoint solutions provider.
* Progress Software bought Telerik, a provider of application development tools, for $262.5 million.
* A Siris Capital Group-led consortium purchased Digital River, an e-commerce services provider, for $840 million.
* Yahoo acquired BrightRoll, an online search and advertising company, for $700 million.
* Google made a $542 million investment in Magic Leap, a virtual reality company.

* Sony Pictures TV invested (50%) in two Israeli telenovela cable TV channels.

* UK-based Daisy Group, a telecoms company, is going private in a £500 million deal from a consortium of shareholders, led by its CEO.

* GT Advanced Technologies has reached an agreement with Apple regarding its production of sapphire materials.

* IBM is paying Globalfoundries $1.5 billion to acquire its chip-making business.

* Excellent quarterly results from Yelp (back in the black).

* Very good quarterly figures from OpenText.

* Good quarterly numbers from Amphenol, Apple, ARM Holdings, Broadcom (back in the black), Idea Cellular, Infinera, Mail.ru Group, Manhattan Associates, Micrel, Nokia, Omnicom Group, Teradyne and Unisys (back in the black).

* Satisfactory quarterly results from Avnet, Check Point Software Technologies, Comcast, Datalink, EMC, Equifax, Gemalto, Informatica, Lexmark, PC Connection, Riverbed Technologies, SAP, SK Hynix, Texas Instruments, VeriSign, Wipro and Yahoo.

* Mediocre quarterly results from Celestica, China Mobile, Compuware, KLA-Tencor, Lam Research, Lockheed Martin (Information Systems & Global Solutions unit), Maxim Integrated Products, Orange, Polycom (although back in the black), Rambus (but back in the black) and Xerox.

* Mixed quarterly figures from Altera, with revenue up but profit down; America Movil, with revenue up but profit down; AT&T, with revenue up but profit down; CA Technologies, with revenue down but profit up; Cadence Design Systems, with revenue up but profit down; China Unicom, with revenue down but profit up; Citrix Systems, with revenue up but profit down; Cree, with revenue up but profit down; EFI, with revenue up but profit down; Fortinet, with revenue up but profit down; Ingram Micro, with revenue up but profit down; Juniper Networks, with revenue down but profit up; Lattice Semiconductor, with revenue down but profit up; Logitech International, with revenue down but profit up; Microsoft, with revenue up but profit down; Netgear, with revenue down but profit up; Rogers Communications, with revenue up but profit down; Synaptics, with revenue up but profit down; Tessco, with revenue up but profit down; Verizon Communications, with revenue up but profit down; VMware, with revenue up but profit down; and Yandex, with revenue up but profit down.

* Very poor quarterly figures from IBM, NCR and Mellanox Technologies (although back in the black).

* Quarterly losses from Amazon.com, Avid, NetSuite, Pandora Media, Qlik Technologies and ServiceNow.

* The appointments of Frank Martire as executive chairman of FIS (was CEO and chairman); Gary Norcross as president and CEO of FIS; and Jay Samit as CEO of SeaChange International.

* The resignations of Marc Andreessen, a prominent investor, from the board of eBay; and Raghu Rau, CEO of SeaChange International.

* The retirement of Craig Muhlauser, CEO of Celestica (by the end of 2015).

* A planned IPO from Roku, a TV start-up.

Research results and predictions

EMEA/Africa:

* Only 3.6% of Africa's telecoms subscribers use fixed lines and may be attributed to state-owned companies dominating Africa's fixed-line market, according to Frost & Sullivan.

Worldwide:

* Global notebook shipments, excluding two-in-one models, are expected to drop 4.4% in Q4, according to Digitimes Research.
* Advanced analytics is a top business priority, fuelled by the need to make advanced analysis accessible to more users and broaden the insight into the business, according to Gartner.
* Worldwide revenue for marketing software solutions are expected to grow from approximately $20.2 billion in 2014 to over $32.3 billion in 2018, a CAGR of over 12%, according to IDC.
* Global smartphone shipments will grow 9.1% in Q3 to reach 310 million units, according to WitsView.

Stock market changes

* JSE All share index: Up 0.1
* Nasdaq: Up 5.3%
* NYSE (Dow): Up 2.6%
* S&P 500: Up 4.1%
* FTSE100: Up 1.2%
* Top SA share movements: Gijima (-28.6%), Jasco (-7.6%), Net 1 UEPS Technologies (-9.1%), Pinnacle Holdings (+9.2%) and Telkom SA (+10.6%)

Look out for

International:

* A possible bid for BlackBerry by Lenovo.

Africa:

* The impact of the Tanzanian ruling that its mobile phone operators must list next year on its stock exchange.

South Africa:

* Further news on the consolidation of the local telecommunications sector.

Final word

Interbrand has recently announced its annual 'Global Top 100 Brands' listing. From a technology perspective, the following are in the top 25.

1: Apple
2: Google
4: IBM
5: Microsoft
7: Samsung
12: Intel
14: Cisco
15: Amazon
16: Oracle
17: HP
25: SAP

Also included are (alphabetically): Accenture, Adobe, Canon, eBay, Facebook, Huawei (a new entrant), Nokia, Panasonic, Sony and Xerox.

There are no telecommunications companies in the list.

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