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ZTE gets zapped

The company has been fined $1.2 billion by the US government for illegally shipping networking equipment to Iran and North Korea.

Paul Booth
By Paul Booth
Johannesburg, 22 Mar 2017

Intel's acquisition of Mobileye and MuleSoft's IPO were the highlights of the international ICT market during the last two weeks.

At home, M-FiTec's initial investments, the appointment of Altron's new CEO, and changes at MTN were the main local stories.

Key local news of the past two weeks

* Excellent interim numbers from Alaris Holdings, with revenue up 134.6% and profit up 493.8%.
* Good interim numbers from EOH, with revenue up 20.6% and profit up 28.8%.
* Satisfactory interim figures from Metrofile, with revenue up 1.6% and profit up 5%.
* Good year-end figures from Cell C, with revenue up 11% and back in the black (first profit).
* A negative trading update from Altron.
* Dormakaba SA acquired AWM360 Data Systems, a supplier of the Kaba Workforce Management and Access Control solutions.
* M-FiTec bought WIZZIT, an internationally recognised pioneer of cellphone banking, whose mobile banking technology and accompanying deployment model is active in 13 countries across three continents. The deal was worth R104.3 million (87.01%).
* M-FiTec also purchased Magix, a specialist in cyber security, for R60 million (maximum total purchase consideration). Magix focuses mainly on the threats posed by insiders who have access to companies' internal applications and networks and who use this status to collude with third parties.
* M-FiTec made a third acquisition, this time that of Finteq Group, a firm that develops and implements robust payment solutions for the financial services industry. In addition to SA and the SADC territories, Finteq has deployed solutions in Botswana, Ethiopia, Kenya, Namibia, Nigeria, Tanzania and Zimbabwe. This deal was worth R95.2 million (maximum total purchase consideration).
* Lasetu Trading and Projects made a 51% investment in AppCentrix, a managed services company in the monitoring and analytics as a discipline space.
* Prescient has changed its name to and commenced trading as PBT Group.
* Datatec has established a Logicalis SA office headed by Frikkie Grobler.
* Lycamobile will launch its MVNO services in SA running on Cell C's network.
* MICROmega Holdings has been censured and fined R1 million by the JSE following a breach in its share purchase requirements in 2013. The JSE has been advised that the sanction will be opposed by the company, with an appeal to the FSB.
* A renewed JSE cautionary by Datatec.
* A withdrawn JSE cautionary by M-FiTec.
* The appointments of James McNab as chairman of WASPA; Godfrey Motsa as CEO of MTN SA; and Mteto Nyati (ex-CEO of MTN SA) as CEO of Altron.

Key African news

* Vodacom has started its IPO in Tanzania.
* The appointments of Jeremy Potgieter, regional director for Sub-Saharan Africa at Eseye; and Mark Wilson as Syspro Africa's MD.

Key international news

Look out for possible changes at MTN following the installation of new group CEO, Rob Shuter.

* 8x8 acquired LeChat, the maker of Sameroom, an interoperability platform that enables cross-team messaging and collaboration in the enterprise.
* Alarm.com bought ObjectVideo, a pioneer in the fields of video analytics and computer vision, with technology that extracts meaning and intelligence from video streams in real-time to enable object tracking, pattern recognition and activity identification.
* CA Technologies purchased Veracode, a provider of a SaaS secure DevOps platform, for $614 million.
* IT services firm e-Zest Solutions acquired SmarterMe, a machine learning powered personal sales assistant.
* Extreme Networks bought Avaya's networking business for $100 million; Avaya recently sought Chapter 11 bankruptcy protection.
* First Data purchased Acculynk, a technology company that delivers e-commerce solutions for debit card acceptance.
* Forcepoint acquired Imperva's Skyfence business.
* Genpact bought Rage Frameworks in a move designed to bolster its AI capability.
* HPE purchased Nimble Storage, a data storage provider, for $1.09 billion.
* Motorola Solutions acquired Interexport, a company that provides managed and support services for communications systems to government agencies, public safety and enterprise customers in Chile.
* ON Semiconductor has bought and licensed mmWave technology for automotive radar applications, which was developed by IBM's Haifa research team.
* Intel purchased Mobileye, a driverless technology firm, for $15.3 billion.
* Pinterest acquired Jelly, Twitter co-founder Biz Stone's start-up.
* Vista Equity Partners, the private equity fund specialising in software acquisitions, bought Canada's DH Corporation in order to merge the business with British banking software developer Misys. The deal was worth C$4.8 billion.
* WNS Holdings purchased HealthHelp, an industry leader in care management.
* Zix acquired Greenview Data, an e-mail security company.
* Huawei made a 16.83% investment in Indonesia's Bakrie Telecom.
* Intelsat has invested in Kymeta, a provider of software-enabled metamaterials-based electronic beamforming antennas and terminals for satellite communications, which will keep boats, planes, cars and more connected.
* Baidu has led an investment in NextEV, a green car start-up.
* IBM and Salesforce have formed a strategic partnership to deliver joint solutions designed to leverage artificial intelligence and enable companies to make smarter decisions, faster.
* Sprint has won a $139 million lawsuit over Time Warner Cable regarding a VOIP patent dispute.
* Motorola Solutions has filed a Patent Infringement and Trade Secret Misappropriation complaint against Hytera Communications Corporation.
* DISH Network will replace Linear Technology in the S&P 500, since the latter is in the process of being acquired by Analog Devices.
* BT Group has agreed to legally separate its Openreach business into a separate entity.
* Diebold Nixdorf is actively pursuing a divestiture of its legacy Diebold business in the UK.
* The EU has approved AT&T's $85 billion acquisition of Time Warner.
* ZTE has been fined $1.2 billion by the US government for illegally shipping networking equipment to Iran and North Korea.
* Excellent quarterly results from Comtech Telecoms.
* Very good quarterly figures from YY.
* Good quarterly numbers from Adobe, HannStar Display (back in the black), NeoPhotonics, Telecom Argentina, The Descartes Systems Group and TransAct Technologies.
* Satisfactory quarterly results from Alaska Communications Systems, Allied Motion Technologies, Altice, Analogic (back in the black), ChipMOS Technologies, Ciena (back in the black), Formula Systems, Inmarsat, Oracle and RadNet.
* Satisfactory year-end figures from Etisalat Group, Iliad (France), Zain Group and Zain Saudi Arabia.
* Mediocre quarterly results from China Unicom, FairPoint Communications and Tech Data.
* Mixed quarterly figures from Alarm.com, with revenue up but profit down; ARI Network Services, with revenue up but profit down; Cellcom Israel, with revenue down but profit up; Engility Holdings, with revenue down but back in the black; Finisar, with revenue up but profit down; International Game Technology, with revenue down but profit up; Jabil Circuit, with revenue up but profit down; and Semtech, with revenue up and profit down.
* Quarterly losses from Boingo Wireless, CDI, Coupa Software, Everspin Technologies, Gridsum, GTT Communications, Identiv, Information Services Group, Inseego, Lumos Networks, MicroVision, ModusLink, NII Holdings, Nimble Storage, PCTEL, QAD, Smith Micro Software, Stratasys, Telesat, TeleTech Holdings, Top Image Systems, Verifone Systems and Volt Information Sciences.* Full-year losses from D-Link, WANdisco and ZTE.
* The appointments of Bader Nasser Al-Kharafi as vice-chairman and CEO of Zain Group; Mohannad Mohammed Al-Kharafi as chairman of Zain Group; Jan du Plessis as chairman of BT Group; Scott Gegenheimer as CEO of operations of Zain Group (was CEO); Douglas Hsiao as chairman of D-Link; Thomas Iannotti as chairman of Applied Materials; Attila Keszeg (ex-Deutsche Telekom executive) as CEO of GO (Malta); Frank Martell as president and CEO of CoreLogic; Mark McCollum as CEO of Weatherford International; and Yin Yimin as chairman of ZTE.
* The resignation of Zhao Xianming as chairman of ZTE (stays on as president).
* The departures of John Hsuan, chairman of D-Link; and Mike Rake, chairman of BT Group.
* An IPO filing for the NYSE from Yext, a knowledge engine company whose platform lets businesses manage their digital knowledge in the cloud and sync it to over 100 services, including Apple Maps, Bing, Cortana, Facebook, Google, Google Maps, Instagram, Siri and Yelp.
* An IPO filing for Nasdaq from Okta, a provider of identity access management software.
* A very good IPO on the NYSE by MuleSoft, a maker of software that automatically integrates disparate data, devices and applications to help business networks run faster.
* A disappointing IPO on Nasdaq by Presidio, a firm that specialises in digital infrastructure, cloud computing and security solutions.

Research results and predictions

EMEA/Africa:
* Africa's pay TV revenue for 2016 was $4.4 billion and is forecast to reach $6 billion by 2021, according to Dataxis.
* The MEA PC market experienced a mild decline of 1.8% year-on-year in Q416 to total 3.2 million units, according to IDC. The decline stemmed from the desktop segment, as weak commercial demand saw shipments fall -10% year-on-year to total 1.2 million units for the quarter. Notebook shipments were up 3.6% to total 2 million units, driven primarily by demand from the consumer segment.
* The MEA tablet market declined 24.2% year-on-year in Q416 to total 3.07 million, according to IDC.
* The EMEA server market in Q416 reported a year-on-year decline in vendor revenue of 12.9% to $3.4 billion, and a year-on-year decrease of 4.7% in units shipped to just under 600 000, according to IDC.
* Total EMEA external storage systems revenue fell by 10.6% in Q416, according to IDC.

Worldwide:
* Global quarterly tablet shipments will dip below 40 million units in Q117 for the first time in almost five years, according to Digitimes Research.
* he worldwide application integration and middleware software market continues to grow faster than the overall infrastructure software market, with revenue on pace to surpass $27 billion in 2017, an increase of 7% from 2016, according to Gartner.
* The worldwide hardcopy peripherals market increased 0.6% year-on-year to 26.6 million units in 4Q16, driven by a solid performance in the inkjet and laser markets, which grew 0.6% and 1.6% year-on-year, respectively, according to IDC. Shipment value also increased to more than $14 billion in the quarter.
* The combined consumer and enterprise worldwide wireless local area network (WLAN) market segments decreased 0.1% year-on-year in Q416 and increased 3.1% for the full year to finish at $2.43 billion, according to IDC.
* Large-format printer shipments and revenue grew by more than 4% year-on-year in 2016, according to IDC.
* The worldwide Ethernet switch market (layer 2/3) recorded $6.7 billion in revenue in 4Q16, an increase of 3.5% year-on-year, according to IDC. For the full year 2016, the market recorded $24.4 billion for a full year growth rate of 2.4%. Meanwhile, the worldwide total enterprise and service provider router market recorded $3.87 billion in revenue in 4Q16, increasing 1.5% on a year-on-year basis. For the full year 2016, this market finished at $14.58 billion, an increase of 1.3% over 2015.
* Worldwide vendor revenue in the total security appliance market increased 9.2% year-on-year to $3.2 billion in Q416, according to IDC.
* Worldwide revenue for big data and business analytics will reach $150.8 billion in 2017, an increase of 12.4% over 2016, according to IDC. Commercial purchases of BDA-related hardware, software and services are expected to maintain a CAGR of 11.9% through 2020, when revenue will be more than $210 billion.
* The worldwide augmented and virtual reality headset market is expected to grow at a CAGR of 58%, reaching 99.4 million units in 2021, according to IDC.
* Worldwide purpose-built backup appliance factory revenue was down 4.1% year-on-year, totalling $991.8 million in 4Q16.

Stock market changes

* JSE All share index: Up 1.6%
* FTSE100: Up 0.7% (an all-time high reached during this period)
* DAX: Up 0.6% (highest weekend close since September 2015)
* NYSE (Dow): Down 0.4% (an all-time high reached during this period)
* S&P 500: Down 0.2% (an all-time high reached during this period)
* Nasdaq: Up 0.5% (an all-time high reached during this period)
* Nikkei225: Up 0.3%
* Hang Seng: Up 0.3% (highest weekend close since November 2015)
* Shanghai: Up 0.1%

Look out for

International:
* A buyer for Citrix Systems.
* The outcome of an offer by Euronet Worldwide to buy MoneyGram International for more than $1 billion, which trumps a bid by Ant Financial Services Group, the payment affiliate of China's Alibaba Group Holding.
* American Tower acquiring Idea Cellular's tower business.

Africa:
* Etisalat's Nigerian operation being taken over by three banks because of $1.72 billion in unpaid debts.

South Africa:
* Possible changes at MTN following the installation of new group CEO, Rob Shuter.

Final word

Fast Company's 2017 listing of the world's most innovative companies includes the following technology organisations:
* 1: Amazon
* 2: Google
* 3: Uber
* 4: Apple
* 5: Snap
* 6: Facebook
* 7: Netflix
* 8: Twilio
* 10: Spotify
* 11: Alibaba
* 12: Tencent
* 13: Xiaomi
* 15: Huawei
* 19: Open Whisper Systems
* 21: IBM
* 23: Slack
* 31: Microsoft
* 35: Adobe
* 41: Nvidia
* 49: Simplify Networks

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