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Microsoft Sheds Low-End Mobile Phone Business

Two years after Microsoft ( MSFT ) purchased Nokia ‘s ( NOK ) mobile phone unit, the software giant is moving to exit Nokia’s entry-level feature phone business. Microsoft announced Wednesday that it is selling the business for $350 million to FIH Mobile, a Hong Kong-listed subsidiary of Taiwan-based contract manufacturer Foxconn, and HMD Global, a newly created company in Finland that has licensed Nokia’s brand and intellectual property . Microsoft said it will continue to develop Windows smartphones, such as its Lumia devices, and will continue to support third-party handsets from partners like Acer, Alcatel, HP Inc. ( HPQ ), Trinity and Vaio. Feature phones are low-end devices that have limited capabilities compared with full-fledged smartphones. Feature phones are targeted mostly at customers in emerging markets. Microsoft bought the Nokia handset business in April 2014 for $7.5 billion, a deal negotiated by Microsoft’s previous CEO, Steve Ballmer, in September 2013. Microsoft wrote off the entire value of the deal in July 2015 when it recorded an impairment charge of $7.6 billion related to the Nokia assets. “Microsoft’s exit from the feature phone business is not at all surprising,” IHS analysts Ian Fogg and Daniel Gleeson said in a research report Wednesday. “The deal again highlights Microsoft’s continued failure in mobile.” Microsoft’s smartphone future is “up in the air” because the company hasn’t released any new flagship handsets for Windows 10 Mobile in a while, they said. Microsoft shipped just 2.3 million smartphones in the first quarter, down 70% from Q1 2015, IHS said. “Realistically Microsoft can hope to be no more than a bit player in the mobile phone market now,” Fogg and Gleeson said. The smartphone market is dominated by Apple ‘s ( AAPL ) iPhone and Android-based devices from Samsung and others. Microsoft stock was up a fraction in morning trading in the stock market today , near 51, but trading below its 50-day line since its earnings release late last month disappointed.

Stratasys Earnings Will Shed Light On Wobbly 3D Printer Market

3D printer maker Stratasys ( SSYS ) is set to report earnings before the open Monday, after archrival  3D Systems ’ ( DDD ) report on Thursday showed continuing struggles for the sector. The consensus is that Stratasys will post Q1 revenue of $164.8 million, down 4.5% year over year and the third quarter in a row of declines. Analysts polled by Thomson Reuters expect a 4-cent per-share loss minus items, swinging from a 4-cent profit in Q1 2015, and marking the sixth quarter in a row of earnings deceleration. The Q1 earnings  by 3D Systems showed a 5% drop in revenue to $152.5 million, nearly $4 million short of views. It was the company’s fourth straight quarter of revenue deceleration. The company posted flat EPS ex items of 5 cents. Shares of 3D Systems and Stratasys were hammered in 2015, as both posted quarter after quarter of disappointing earnings and sales. Stratasys stock hit a six-year low of 14.88 three months ago and is up nearly 40% since then despite a six-day losing streak. Stratasys stock closed Friday at 21.06, down 1%. 3D Systems has doubled since hitting a five-year low of 6 three months ago, but the stock has also fallen for that last six trading days. 3D Systems fell 3.1% Friday, to 13.16. But despite the struggles of the two market leaders, the 3D printing industry is stronger than it seems, say industry analysts who track the field. Global 3D printer revenue rose 34% last year to $3.3 billion and shipments rose 68% to 133,000 units, according to estimates from research firm Canalys. And globally, 3D printing technology is being increasingly embraced by corporations, governments and universities. But the 3D printer companies await a new, potentially major, rival, as HP Inc. ( HPQ ) plans to enter the market this year.

3D Systems Earnings Show Ongoing Struggle In 3D Printer Market

3D Systems ( DDD ) missed with its Q1 revenue posted early Thursday, its third straight quarter of year-over-year declines in sales, as the 3D printer market resets expectations. Before the open, 3D Systems reported Q1 revenue of $152.5 million, down 5% year over year and missing the consensus of $156.3 million. Excluding the contribution of consumer products and services that the company no longer sells, revenue fell 2%. The company posted flat earnings per share minus items of 5 cents. 3D Systems stock was down nearly 6%, near 14, in afternoon trading in the stock market today , and it touched a seven-week low. Vyomesh Joshi, named CEO last month, sees big market opportunities ahead. “I’ve spent the past month listening to and learning from customers, partners and employees,” commented Joshi said. “I will be focusing on improving quality, reliability and supply chain. The next phase for us is to develop a strategy to drive profitable growth with operational excellence and an appropriate cost structure.” Joshi had been executive vice president of the imaging and printing business of HP Inc. ( HPQ ), formerly part of Hewlett-Packard before its split. HP plans to enter the 3D printer market this year. In the company’s earnings conference call, 3D Systems CFO David Styka said demand for professional 3D printers remained soft last quarter. Revenue from professional printers excluding desktop decreased 23%, on a 50% decline in unit sales. “The decrease in units was partially due to the availability gaps for new MultiJet Printers rolled out during the first quarter,” he said. CEO Joshi, on the call, repeated several times he was in a learning mode, but optimistic ahead. “The other important part that I am learning and that’s the vertical approach where we want to go after health care, aerospace, automobile, and also higher education,” he said, “because, if you think about the universities, we need to get a lot of people trained in understanding the 3D market.” 3D Systems did not give earnings guidance. It and and Stratasys ( SSYS ) are the two largest providers of 3D printers. Stratasys is set to report earnings before the market open Monday. Its shares were down nearly 3% Thursday afternoon. 3D printer makers ExOne ( XONE ) and Voxeljet ( VJET ) are set to report earnings on May 11 and May 13, respectively, both before the market open. Needham analyst James Ricchiuti last week lowered his rating on 3D Systems to hold from buy, “as shares might be pricing in too much,” he wrote. “Notwithstanding solid sequential improvement in Q4 from the publicly traded 3D printing companies, we believe business remains challenging, compounded by the normal seasonal weakness experienced in the March quarter,” Ricchiuti wrote.