Tag Archives: oud

Will Amazon’s Transportation Fleet Bring Down Hammer On FedEx, UPS?

It’s an ambitious plan by Amazon ( AMZN ), to procure a fleet of 40 airline freighters and lessen its dependence on FedEx ( FDX ) and United Parcel Service ( UPS ). The 40 aircraft that Amazon plans to have fully operational by 2018 will enable it to bring as much as 30% of its current delivery volume in-house, according to a research report Monday by Moody’s Investors Service analyst Jonathan Root. In terms of short- and medium-haul aircraft, Amazon’s fleet would be 21% the size of UPS’ and 14% the size of FedEx’s, says Root. In terms of payload capacity, Amazon’s fleet would be 26% the size of UPS’ and 17% of FedEx’s, excluding their largest freighters that fly mostly long-haul routes for those companies, Root wrote. “As significant as that sounds, the business that UPS and FedEx will lose may not be as bad as it sounds,” Root wrote. “Revenue and average daily volumes at UPS and FedEx will be hurt, but there’s plenty of opportunity for them to replace that lost business with growing volumes from higher-yielding customers” and growth in e-commerce. Root also says that Amazon is one of the least profitable customers for UPS and FedEx, because Amazon’s size enables it to negotiate considerable discounts. “The extent to which UPS and FedEx can offset volume declines from Amazon with new business from other customers will determine how beneficial or detrimental Amazon’s plan will be to the companies’ segment operating margins,” Root wrote. Amazon stock was down a fraction, near 700, in afternoon trading in the stock market today , after touching a record high above 722 on May 12. It’s an IBD Leaderboard stock. UPS stock was down a fraction, while FedEx was up a fraction. The threat would grow if other large retailers follow Amazon’s lead, which he says is possible. “We understand that Wal-Mart Stores ( WMT ) is investing to improve its e-commerce positioning by building eight e-commerce warehouses,” Root wrote. Wal-Mart already offers free shipping on orders of more than $50, and it might broadly offer an e-commerce membership that includes free shipping, as Amazon does with its Amazon Prime membership service. Still, it’s not clear how deeply Amazon will dive into transportation services. “We estimate that Amazon could build a competing U.S. ground network for between $8 billion and $15 billion,” Root wrote. “We believe the company has the financial capacity to continue adding fulfillment centers, pickup locations and local and regional delivery operations, it if chooses to do so.” More than that, Amazon could offer its delivery services to the many third-party sellers on its site. “Such an offering would be more problematic for UPS’ and FedEx’s longer-term financial performance,” Root wrote.

Google’s Android Plea: Oracle Took No Risk, Wants Big Payday

Alphabet ’s ( GOOGL ) Google says Oracle ( ORCL ) “took none of the risk” in developing and marketing Android software, but now wants “a lot of the money” from the mobile operating system’s success, says a report from tech website Ars Technica . In closing arguments to a jury, Google attorney Robert Van Nest said the copyright infringement case’s outcome is important for the software industry, reported Ars Technica. Oracle is seeking nearly $9 billion in damages from Google. It’s slated to make its closing statement Monday afternoon. Oracle claims that Google violated its copyright on parts of the Java programming language when it created the Android mobile operating system, now used in mobile phones worldwide. Oracle acquired Java when it purchased Sun Microsystems in 2010. “This is a very important case, not only for Google, but for innovation and technology in general,” Van Nest told the jury. “What Google engineers did was nothing out of that mainstream. They built Android from scratch, using new Google technology, and adapted technology from open sources. “Now we’re in a situation where Oracle, which had no investment in Android, took none of the risk — they want all the credit and a lot of the money. And that’s not fair.” Oracle says Google has earned $21 billion in profit from Android-based smartphones. At its I/O developer’s conference last week, Google showcased the Android N software upgrade, which includes an automotive variant and a virtual reality mode for smartphones. If Oracle wins its court case, it might also seek royalties, analysts say. Shares of both Alphabet and Oracle were down a fraction in afternoon trading in the stock market today .

Apple Chip Suppliers Broadcom, NXP, Skyworks Up On iPhone 7 Hopes

Apple ( AAPL ) chip suppliers Skyworks Solutions ( SWKS ), Cirrus Logic ( CRUS ) and Qorvo ( QRVO ) stocks lifted Monday on a bullish RBC Capital report that sees fellow chipmaker Broadcom ( AVGO ) reaching $16 earnings per share on merger synergies and iPhone 7 content gains. But Broadcom’s Q2 wireless sales will likely dip $40 million to $50 million on slowing current-generation iPhone sales, RBC Capital analyst Amit Daryanani wrote in the research report. He rates Broadcom stock his top semiconductor pick, with a 180 price target. Over the next two years, Broadcom stock could reach 200, Daryanani says. In afternoon trading on the stock market today , Broadcom stock was up a fraction, trailing shares of InvenSense ( INVN ) and Qorvo, which jumped 3.4% and 3.3%, respectively. Cirrus Logic, Skyworks and Taiwan Semiconductor Manufacturing ( TSM ) stocks were up 3, 2.5% and 1.5%, respectively. NXP Semiconductors ( NXPI ) stock was up nearly 1.5%, while  Integrated Device Technology ( IDTI ) was up a fraction. Broadcom is slated to report its Q2 earnings after the close June 2. Daryanani expects Broadcom to miss consensus expectations for $3.55 billion in sales on petering Apple iPhone sales, despite stronger-than-expected Samsung Galaxy S7 sales. Apple comprises 15% of Broadcom’s sales, Daryanani estimates, with Samsung in the high single digits. Apple’s June-quarter guidance implies 40 million iPhones shipped vs. consensus views for 44 million. Near term, Apple will pose a headwind until the iPhone 7 , expected to be released in September, ramps up. “To that end, Broadcom’s FBAR (film bulk acoustic resonator) business could see double-digit year-over-year growth driven by content gains,” Daryanani wrote. Wi-Fi combo chips could also see modest average sales prices tailwinds. Earlier, Broadcom saw wireless account for 23% of sales. Daryanani expects that segment to grow 37% quarter over quarter as the company’s recent merger is factored. The former Avago Technologies bought Broadcom for $37 million in February, but kept the Broadcom name. Storage sales will likely become “incrementally worse,” Daryanani wrote. Western Digital ( WDC ) and Seagate Technologies ‘ ( STX ) recent earnings suggest a $100 million hard-disk drive total addressable market in March and a $95 million TAM in June, down 20% and 15% vs. last year. Enterprise storage is expected to account for 17% of Broadcom’s Q2 sales. Daryanani sees the segment declining 14% vs. Q1, vs. 6% sequential growth in the prior quarter.