Tech Stock Roundup: AAPL's WWDC, MSFT Buys LNKD

In the week that Apple (NASDAQ:AAPL) hosts its WWDC, all other events naturally take a back seat. But last week wasn’t just any old week; it was one in which Microsoft (NASDAQ:MSFT) made a huge acquisition, picking up LinkedIn (NYSE:LNKD) for $196 a share. Then there was Alphabet’s (NASDAQ:GOOGL) Google announcing product with special enterprise focus. In short, the week was jam-packed with important events. So without further ado let’s jump into the top stories:

Apple WWDC

The best parts of the event were as follows:

In iOS 10, some third-party messaging apps are integrated into the Siri voice assistant experience to greatly increase its utility. So with the new OS, ride booking (like Uber, Lyft), messaging (like Facebook (NASDAQ:FB) Messenger, WhatsApp, WeChat), VoIP calling (like Skype), photo search, payments (through Square (NYSE:SQ) Cash, for example), health/fitness apps and Apple Music will now work seamlessly with it. Siri will address the query herself, taking it to the third party app only when required. She just doesn’t work with third-party music apps.

The new Mac OS Sierra also has Siri integrated to look up information, find documents, pin or drag and drop search results, and even adjust system preferences. There is also the universal clipboard that all Apple devices can access thereby facilitating copying and pasting between devices. Other features include tabs within Sierra apps; easy dragging and positioning of a picture or video to a corner of the screen while working on something else; and a “memory” feature within Pictures that curates your photo library and pulls out collections of photographs from the past.

Then there’s the Apple Pay enhancement. IBM (NYSE:IBM) customers using WebSphere Commerce or Commerce on Cloud will now have the added convenience of paying through Apple Pay. IBM’s comprehensive commerce platform is used by nine of the top ten U.S. retailers and powers over 12K storefronts for online retailers. So this collaboration is a very big deal for the Apple. This means they don’t have to enter personal details any more but can use Apple Pay on the web from their Macs iPhones or iPads.

WatchOS 3 was also showcased and it has new features enabling immediate launching right from the watch face. The focus areas appear to be easier communication, music playing and workouts. Apple is also offering appealing watch faces.

Microsoft Acquires LinkedIn

Microsoft agreed to acquire LinkedIn last week for $26.2 billion, or $196 a share. The company holds most of its cash in short term investments that it won’t be liquidating to finance the acquisition. Instead it will raise necessary debt. The deal was approved by the boards of both companies and awaits regulatory approval in the U.S., EU, Canada and Brazil. LinkedIn will operate as a separate unit for now headed by its current CEO Jeff Weiner who will report to Microsoft CEO Satya Nadella. Microsoft expects to complete integration by 2018 and the acquisition will be slightly dilutive to its 2017 and 2018 fiscal years ending in June.

Google Enterprise Play

Google has announced a digital search assistant called Springboard and thrown in a redesign of Google Sites for good measure. So now corporate employees can use Springboard to fetch information housed in a variety of Google apps including Google Drive, Gmail, Calendar and Google Docs. They can also create customized sites that can be accessed by employees alone for drag and drop editing and real-time collaboration. Other features are new themes and layouts facilitating better viewing on both desktop and mobile devices.

Sector Price Index

Sector Price Index

Other stories you might have missed-

Corporate

Apple Asked To Suspend iPhone Sales In Beijing: The Chinese media reported last week that back in May, Apple had been ordered to stop selling iPhone 6 and 6S in Beijing because they looked too much like the 100C model made by Shenzhen Beili, a small Chinese brand. Apple said that a court had stayed the administrative order on appeal and that iPhone sales were continuing as usual.

Apple Privacy Policy to Support A.I. Research: Apple has always said how it’s not interested in your data and how it will do everything it can to make sure that no one else gets access to it. But data is important currency today because the future of technological development is artificial intelligence and machine learning and these things are dependent on it. So now Apple is saying that it will use your data while ensuring that it can’t be traced back to you (something like what everyone else promises). It will also see that your data remains on your device (can’t imagine how). Apple is calling the technology differential privacy.

Google’s New Machine Learning Group: Google inaugurated a new machine learning unit based out of Zurich. This isn’t surprising because the search company’s biggest engineering center outside the U.S. is in Zurich. Machine learning is cutting edge technology and positioning the unit in the region will allow the company to tap the abundance of engineering talent in the region while also sweetening its relationship with regulatory authorities.

Legal/Regulatory

Google Dealing with Balloon Lawsuit: Space Data, an Arizona technology firm, has filed a case in a San Jose federal court seeking an unspecified amount of damages. It has made Alphabet, its Google subsidiary and Google’s X research arm parties to the lawsuit, alleging that Google’s balloon project infringed on two of its patents related to aerial networks and retrieval of “lighter than air” objects from the sky. Google executives have in the past been in talks with Space Data executives for use of its technology or outright purchase of the firm, but the talks broke down on Space Data’s supposed breaching a confidentiality agreement between the two.

Amazon Fined: The FAA is taking Amazon (NASDAQ:AMZN) to task for an Oct 2014 incident wherein the retailer shipped a gallon of hazardous material (drain cleaner) through United Parcel Service (NYSE:UPS), which leaked and hurt UPS employees. The FAA held that Amazon had erred in terms of product packaging, labeling and in terms of handling staff that were not adequately qualified under federal regulations. Accordingly, it fined Amazon $350K. Amazon said it would continue to co-operate with the FAA in these matters.

New Technology/Products

Microsoft to Launch Blockchain Middleware: Microsoft has announced Project Bletchley wherein it offers an open, modular blockchain middleware taking care of identity management, operations management and other services like analytics and machine learning for blockchain applications. Companies wishing to build such a distributed application on Azure can use Microsoft’s cryptlet building block technology and blockchain middleware, which will allow different distributed technologies to talk to each other through Azure and the ecosystem middleware fabric. Microsoft’s endorsement of blockchain technology and its direct involvement in creating a connecting fabric might finally bring the required security and credibility to hasten adoption.

Microsoft’s VR Gaming System: Microsoft won’t be left behind in the console race the next time. Soon after Sony announced that its next game console PS4 would be far more powerful, Microsoft announced Project Scorpio, its VR gaming device supporting 4K experiences to be released in time for the 2017 holiday season. It will have 8 CPU cores, 6 teraflops of GPU power and “will be the most powerful console every built”, according to Phil Spencer, the head of Microsoft’s Xbox gaming division.

Lenovo Smartphones: Lenovo is introducing some new phones in the hopes of reviving its struggling phone business. The company made some interesting announcements last week, the first being Moto Z or Moto Mods, giving shape to Google’s modular phone idea. These phones, which have replaceable and interchangeable modules that people can add according to their needs will launch this summer through Verizon. Its interchangeable modules include an extra speaker, a projector for presentations, an expanded internal battery and a shatter-resistant screen.

Lenovo also announced the Phab2 Pro, which is based on Google’s Project Tango (measures and maps users’ surroundings with sensors, cameras and software to create 3D models of indoor spaces). The phone has motion-tracking technology and four cameras, of which one is designed to support depth perception. Tango facilitates the creation of augmented reality experiences.

M&A and Collaborations

Apple-Intel Deal: Bloomberg quoted unnamed sources saying that some versions of the next iPhone will use an Intel (NASDAQ:INTC) modem instead of one from Qualcomm (NASDAQ:QCOM), which has been the sole supplier for iPhones thus far. Qualcomm will supply for phones sold through Verizon and in China with Intel supplying the rest. The goal for Apple appears to be to keep the pressure on Qualcomm and prevent price escalation.

For Intel, the positive is the revenue opportunity, because despite the low margin business (as it is sure to be), sales volumes will allow Intel to recover some fixed costs. The company is on track to take out $800 million in mobile losses this year. For Qualcomm, this is lost business plus more leverage to Apple, but Qualcomm will reportedly generate licensing revenue on these units, so there’s nothing to cry about either.

Cisco Puts $15 Million into Elastifile: Cisco (NASDAQ:CSCO) has put some money (around $15 million) into an Israeli data storage company for a foothold in the converged infrastructure market. Most other big networking players (HP Enterprise and the Dell-EMC combination) are able to offer such services. Cisco’s collaboration with Elastiville, which helps enterprises scale out primary storage and thereby increase the number of applications being run, has said that the funds would be used to market its technology.

Microsoft Buys Wand Labs: Microsoft bought Wand Labs for an unspecified amount. The software giant intends to integrate Wand Labs’ chatting technology into its chatbot effort and is therefore folding the company into its Bing engineering and platform group. Microsoft is building a world that CEO Nadella calls the conversation-as-a-service platform, so this acquisition is expected to further those efforts.

Unisys Expands Relationship with Microsoft: The two companies have expanded their global collaboration to include security solutions that they will now develop to run on Microsoft’s Azure. This will help the companies tap the global cloud security market, which has been estimated to grow at a CAGR of 15.7% through 2019.

Twitter Makes Soundcloud Investment

QLogic Being Acquired By Cavium

Some Numbers

Google Chromecast Ahead of Apple TV: IHS says in its Connected Device report, which covers global devices, over the top (OTT) and pay TV multi-screen markets, that total connected device sales reached 8.1 billion units at the end of 2015. Netflix (NASDAQ:NFLX) has reached 32% of connected devices in the U.S., smartphones have outnumbered tablets 5 to 1 and Chromecast shipments moved ahead of Apple TV.

Of course, Apple TV and chromecast aren’t exactly comparable with Apple packing in a lot of features, dedicated OS and more for $149 and Google offering a basic device for $35. Still, this does mean that Google is now reaching more people. Note that a Strategy Analytics report from March says that Google Chromecast captured 35% market share in 2015 (up from 28% in 2014) with Apple at 20% (22% in 2014) and Amazon and Roku at 15% each.

Alibaba (NYSE:BABA) Transaction Volume Target: Alibaba CEO Jack Ma mentioned some ambitious targets at an investor conference at its headquarters in Hangzhou, Zhejiang. Accordingly, the company expects to double its gross merchandise volume (GMV) from 3.09 trillion yuan in fiscal 2016 to 6 trillion yuan in 2019. Active buyers will jump from 423 million in 2016 to 2 billion by 2036.

Oracle (NYSE:ORCL) Earnings Report