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Tencent calls the tune

The company pays $2.7 billion for a majority stake in China Music Corporation.

Paul Booth
By Paul Booth
Johannesburg, 18 Jul 2016

Tencent's investment in China Music Corporation was the main story of the international ICT market last week.

At home, it was very quiet.

Key local news

* A positive trading update from Ellies, although still forecasting a loss.
* Decision Inc established a partnership with US-based Adaptive Insights, a company with a worldwide footprint and a cloud-based corporate performance management system.
* Renewed JSE cautionaries by Blue Label Telecoms and MTN Zakhele.
* The appointment of Thinus Mulder as CEO of Dark Fibre Africa.
* The retirement of Gustav Smit, CEO of Dark Fibre Africa.

Key African news

* The appointment of Brent Cary as regional sales manager sub-Saharan Africa for Genetec.

Key international news

EU regulators have brought a third anti-trust charge against Alphabet's Google.

* Atlassian, a provider of team collaboration and productivity software, acquired StatusPage, a fast-growing status and incident communication platform that enables companies to share real-time status for cloud services with external customers and internal employees.
* Cellnex Telecom bought 230 telecommunication towers in France from Bouygues Telecom, a number that is likely to grow to 500. The deal was worth EUR80 million.
* Earthlink bought Boston Retail Partners, a highly regarded management consulting firm focused on the retail vertical.
* Infineon Technology purchased Cree's Wolfspeed Power and RF division for $850 million.
* Netcracker Technology, a wholly-owned subsidiary of NEC, acquired CoralTree Systems, a systems integrator and service provider.
* Playtech bought Best Gaming Technology, a rival company, for EUR138 million.
* Synnex purchased Canada-based Minacs for $420 million, and will integrate it into its Concentrix business segment.
* UK-based Unit4, a fast-growing provider of enterprise applications for service organisations, acquired German-based prevero, a provider of corporate performance management and business intelligence solutions.
* Virgin Media, a company owned by Liberty Global, bought UTV Ireland, which is owned by UK's ITV, Britain's biggest free-to-air commercial broadcaster.
* Tencent Holdings made a $2.7 billion majority stake investment in China Music Corporation.
* Samsung Electronics made a $449.1 million investment in BYD, a Chinese automaker and electric vehicle battery maker.
* A strategic partnership between Arkena, a European provider of media services, and Akamai, a global provider of content delivery network services, in a move designed to accelerate the deployment of advanced media services worldwide.
* Cellcom Israel has instigated legal action against Golan Telecom regarding the latter's hosting agreement with Hot Mobile.
* A federal appeals court has said the US government cannot force Microsoft and other companies to turn over customer e-mails stored on servers outside the US.
* EU regulators have brought a third anti-trust charge against Alphabet's Google, accusing it of blocking rivals in the lucrative online search advertising market.
* AT&T and IBM this week struck a partnership that will combine the companies' respective Internet of things (IOT) capabilities, to offer developers a powerful set of open standards-based tools and a starter kit to simplify and accelerate the development of new IOT services.
* Telefonica has raised EUR322 million from a sell-off of a 1.51% stake in China Unicom.
* Satisfactory quarterly results from Adtran, Infosys and Omantel.
* Mixed quarterly figures from TSMC, with revenue up but profit down; and WNS, with revenue up but profit down.
* The appointments of William Amelio as interim CEO of Avnet; Mark Evans as CEO of O2; Michael Fey as president and COO of Symantec; and Supun Weerasinghe as group CEO of Dialog Axiata (as of 1 January 2017).
* The resignation of Ronan Dunne, CEO of O2.
* The departure of Hans Wijayasuriya, group CEO of Dialog Axiata (as of 1 January 2017, but stays within the parent group).
* An IPO filing for Nasdaq from Aegis Identity Software, a provider of identity and access management products and services for education IT environments, including software applications, platforms and infrastructure.
* A very good IPO on the NYSE by Line, the Japanese social media player.

Research results and predictions

EMEA/Africa:
* PC shipments in EMEA totalled 17.8 million units in Q216, a decline of 4.3% from the same period in 2015, according to Gartner.

Worldwide:
* Worldwide PC shipments totalled 64.3 million units in Q216, a 5.2% decline from Q215, according to Gartner.
* Worldwide security software revenue totalled $22.1 billion in 2015, a 3.7% increase in from 2014, according to Gartner.
* According to a recent Gartner survey, 41% of surveyed IT professionals believe their IT organisation to be ready for the digital business of the next two years. A total of 29% of those surveyed said engagement with the demands of digital business would be their primary duty or a significant part of their duties.
* Worldwide PC shipments totalled 62.4 million units in 2Q16, a year-on-year decline of 4.5%, beating the forecast of -7.4% by roughly 3%, according to IDC.
* Public cloud infrastructure as a service (IaaS) offerings are rapidly gaining acceptance among enterprises as a viable alternative to on-premises hardware for IT infrastructure, according to IDC. A recent survey of over 6 000 IT organisations found nearly two-thirds of the respondents are either already using or planning to use public cloud IaaS by the end of 2016. It forecasts public cloud IaaS revenue to more than triple, from $12.6 billion in 2015 to $43.6 billion in 2020, with a compound annual growth rate of 28.2% over the five-year forecast period.

Stock market changes

* JSE All share index: Up 3.5%
* FTSE100: Up 1.2% (highest weekend close since August 2016)
* DAX: Up 4.5%
* NYSE (Dow): Up 2% (highest weekend close)
* S&P 500: Up 1.5% (highest weekend close)
* Nasdaq: Up 1.5% (highest weekend close since December 2016)
* Nikkei225: Up 9.2%
* Hang Seng: Up 5.3%
* Shanghai: Up 2.2%

Look out for:

International:
* The possible acquisition by Xerox of RR Donnelly & Sons, a financial printer firm.

South Africa:
* Further developments regarding Cell C.

Final word

International patent applications filed under the World Intellectual Property Organisation's (WIPO) Patent Cooperation Treaty (PCT) grew by 1.7% to 218 000 in 2015, setting a new annual record. The US, with 57 385 international patent applications, remains the largest user of the PCT, despite an annual drop of 6.7% in 2015; the US is followed by Japan (44 235 PCT filings) and China (29 846).

Telecoms companies head the list of top PCT filers in 2015, with Huawei Technologies leading for the second consecutive year, with 3 898 published PCT applications, or an additional 456 applications over 2015. Qualcomm was the second largest applicant in 2015, with 2 442 published applications, while China's ZTE ranked third, with 2 155 PCT applications.

Among dozens of technical fields, computer technology and digital communication saw the largest numbers of filings in 2015, each exceeding 16 000. Hewlett-Packard is the largest filer for computer technology, followed by Huawei Technologies and Qualcomm. For digital communication, Huawei Technologies, ZTE and Qualcomm are the top applicants. Samsung Electronics - of the Republic of Korea - with 1 132 designs, displaced Swatch of Switzerland (511 designs) to become the largest user of the Hague System (international design applications).

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