The Week in Review
Below is a summary of the activity on Trefis during the past
week that we thought you would find interesting.
Insights from the Week
Technology Media & Telecom
Pandora's Music Genome Project allows users to personalize their
playlists based on preset choices and feedback. On the other hand,
Facebook will allow Spotify to become more social …
Google's earlier social networking efforts Orkut, Buzz and Wave
were all created to penetrate the booming social networking market,
but these efforts failed to take off …
While Intel is the king of PC chips, the mobile market is much
more competitive and since Apple has designed its own chips for the
iPad, we don't see Intel getting a piece of this market anytime
soon …
- NetApp Eyes $85 if it Hangs on to Software Market Share on
June 30, 2011
NetApp performance in the external disk storage systems market
was top notch as the firm expanded its share to 13.5%, up from
11.1% last year, and held on to its second place in the market
behind EMC …
- IBM's Upside & Downside Scenarios to $185 Value on June
30, 2011
There could be 6% upside to the Trefis price estimate if
middleware software license revenues were to increase at a more
rapid rate than we currently forecast to over $12 billion by the
end of the Trefis forecast period …
- What Zynga Followers Should Know Pre-IPO Filing on June 29,
2011
As Zynga user base becomes more international, the average
revenue per user may fall as many international regions have lower
monetization rates …
- How to Justify a $15-20 Billion Valution for Zynga on June
29, 2011
If Zynga's current or long-term operating margins are closer to
those of Electronic Arts and Activision Blizzard around 10%, then
the rumored valuation is far too lofty …
- Google's New Search Features Help it Defend $576 Value on
June 29, 2011
Google has introduced quite a few innovative products in the
market over the past year, which includes Google Instant. The
recent announcement brings voice search on desktops, which was
earlier available on mobile phones …
- Nokia Worth $9 Though N9 Will Add Little on June 29,
2011
Apple and Android-based phones continue to surge ahead of the
pack and N9 is not likely to provide any support to Nokia's market
share. Although N9 will have attractive features, it will likely be
sold for unsubsidized price point …
- New Smartphones to Help Motorola Reach $25 on June 29,
2011
Motorola Mobility earns higher margins on smartphones, which
could help SG&A and R&D expenses as % of gross profits
could decline in the future …
- Priceline's New Alerts Help Bargain Hunters Stay Atop Deals
on June 29, 2011
This seemingly insignificant e-mail alert feature however hints
at how online travel agencies are willing to adapt their systems
and business models from simply offering the so-called 'best deal'
to customizing offers …
- How to Justify Pandora's Valuation at $17 on June 29,
2011
If total registered Pandora users continue growing at
the same pace as in 2011 Q1, it can reach 130 million by the
end of the year …
- Expedia Partners with AirTran Airways, Extending its
Affiliate Network on June 28, 2011
If Expedia could secure more of these partnerships and the
market share for occupied hotel nights rose to around 3% by the end
of our forecast period, this would result in 12-15% upside …
- HP Eyes Big Opportunity in Catering to Small Businesses on
June 28, 2011
According to HP's estimates, SMBs facing challenges like
controlling costs, managing employee productivity and gaining
access to credit, represent an estimated $234 billion in total
addressable market …
- What Dell Could Gain by Acquiring Brocade on June 28,
2011
If Dell is able to push its server sales as a result of the
acquisition, it will make the servers & networking business
segment more valuable than the PC business (notebooks,
netbooks & desktops combined) for Dell …
- AT&T's New CDN Offering, Strategic but Insignificant for
Stock on June 28, 2011
While half of the company's value is associated with these
services, only about 11% comes from business services. Therefore,
while the move may be strategic, its value creation potential is
limited for now …
- IDC Sees Android & Windows 7 Taking Smartphone Market
Share on June 28, 2011
IDC expects iPhone sales to show an average growth rate of 18%
through 2011 to 2015 compared to an overall smartphone market
growth of 20% during the same period …
- Microsoft Wants to Tap Cloud Computing Growth with Office 365
on June 28, 2011
Through Office 365, Microsoft is not only looking at
cementing its position in productivity software market, but also
ride on the faster growth expected out of cloud-computing market
…
- Can AMD's Supercomputing Gains Signal Upside in Server Market
Share? on June 27, 2011
Although AMD has experienced growth in the past 6 months, a
number of AMD-based supercomputers in the top-500 have declined
since 2006 …
- Oracle's Database Business Munches IBM's Market Share on June
27, 2011
As per Oracle's fiscal year Q4 2011 earnings release, its
database software business grew 28% in this quarter compared to the
same quarter last year, which is outpacing competitors by a healthy
margin …
- VMware Announces vFabric 5 to Target Enterprise Market on
June 27, 2011
In 2010, IBM generated nearly $25 billion in revenues through
its middleware software offerings, which gives an idea of the size
of the opportunity for VMware if it can penetrate this market …
- Oracle Hardware Growth Will Come, Focusing on Profitability
First on June 27, 2011
We believe the market may be over-reacting to the concerns of
Oracle's hardware business slowdown, and we as the outlook for
Oracle's hardware business remains robust …
- Online Advertising Sector Review - Google, AOL & Yahoo on
June 27, 2011
Google's stock touched nine month low last week after
an investment bank report suggested search advertising growth
might be slower than expected …
- Mobile Phone Sector Notes - RIM, Apple and Nokia on June 27,
2011
Bloomberg created a stir by coming up with a report that Apple
is expected to come up with a new version of iPhone in September
…
(Trefis Pro Exclusive) Consumer, Retail, &
Automotive
- Africa Next on Gap's International Push on July 1, 2011
The move to expand in the African countries comes following the
announcements by Gap Chairman and CEO, Glenn Murphy, to bring the
company back on track …
- Toyota Goes Small to Make it Big in India on July 1,
2011
The growth rate for passenger car sales dropped to 7% in May
2011 due to increasing interest rates, fuel price hikes,
inflation and commodity price rise; however, most market
participants consider these factors temporary …
- Lower Fuel Prices Help Retail Stock Though Abercrombie Isn't
Cheap on June 30, 2011
Easing oil prices, apart from triggering sales, will also help
these companies gain back some lost operating margins on the
account of high cotton and oil prices.
- ANF Bets on International Growth with Hollister on June 28,
2011
Though the company is expecting Q2 to be a little weaker,
Hollister's revenues this year itself may cover up for most of the
company's $350 million capital expenditure for opening 40 Hollister
Stores …
(Trefis Pro Exclusive) Financial Services
- RBS Dutifully Sheds Assets as Stock Heads to $13.50 on June
30, 2011
RBS has been working hard to clean-up its balance sheet since
the company had to resort to the government's help to survive the
global financial crisis of 2008 …
- Discover Needs 10% Haircut Though Declining Loan Losses Lift
Profits on June 30, 2011
Though a moderate increase in both card sales volume and total
loans supported the increase, a 76% decline in provision for loan
losses helped the company report its all time record quarterly net
income …
- JPMorgan Headed to $45 as it Expands Prime Brokerage Abroad
on June 29, 2011
The prime brokerage industry generated $10 billion in revenues
in 2010 and is poised to grow significantly this year with 254 new
hedge funds starting operations in the first quarter alone …
- Goldman Sachs Expands Investment Banking Capabilities in
Brazil on June 29, 2011
Brazil has posted impressive growth in agriculture, mining,
manufacturing and service sectors to become one of the fastest
growing economies in the world …
- MetLife Eyes Reverse Mortgage Market as Giants Exit on June
29, 2011
MetLife's aggressive venture into the reverse mortgage
market would help it increase its mortgage revenues from $4.2
billion in 2010 to nearly $4.5 billion by 2017 …
- UBS & CS Shares Vulnerable to Greek Debt Shenanigans on
June 29, 2011
Despite the lower liability of Swiss lenders, possible
write-downs resulting from a default could hamper the capital
structure of these banks …
- CS Announces Systematic Trading Group for Asset Management
Division on June 28, 2011
This will provide clients risk-adjusted returns that will have
low correlation with major markets. The group will focus on
transparency and has a pre-defined risk management and governance
structure already in place …
- Fed Consumer Credit Report Lifts Discover's Prospects on June
27, 2011
An increase in the demand for student loans will help Discover
improve its student and personal loan portfolio which stood at $4.3
billion in 2010 …
- MetLife Partners with Citi in Card Insurance Market on June
27, 2011
The growth in the number of credit cards in circulation presents
a huge market opportunity for credit card insurance. The Center for
Economic Justice estimates that credit card insurance generates
over $2 billion in revenue each year …
- Banking and Retail Weekly - Citi, JPM, Barclays, CS &
Home Depot on June 26, 2011
To meet the target Barclays expects retail and business banking
to rake in $3.2 billion of additional revenues and the corporate
and wealth management divisions to contribute an additional $1.6
billion in revenues each …
(Trefis Pro Exclusive) Energy & Natural
Resources
- International Markets Make up 2/3 of First Solar $144 Value
on July 1, 2011
It's interesting to note that Germany's total installed solar PV
panels capacity of 12.1 GW is greater than Japan's six nuclear
reactors of 10 GW capacity …
- LDK Solar Gets a Hand from Chinese Government on July 1,
2011
A possible reason for the pessimism over LDK is the recent
postponement of LDK Solar's debt offering, which was originally
planned to pay down the company's short term debts …
- First Solar Can Hit $144 With Rock Bottom Production Costs on
July 1, 2011
Based on data provided in the company's annual reports, the
average manufacturing cost per watt for First Solar modules has
declined steadily from $1.47 in 2005 to $0.75 in 2010 …
- Chesapeake Shakes Off Fracking Concerns Headed to $35 on July
1, 2011
The New York Times claimed that it researched the well data and
reached the conclusion that some of the wells operating in
less-productive zones may prove too expensive …
- Mining Moly Chips in to Freeport's $59 Stock Value on July 1,
2011
According to the company's annual report for 2010, it sold 67
million tons of molybdenum last year and had more than 3 billion
tons of proven reserves of the metal at the end of 2010 …
- Mining Expansion Lifts Cliffs Outlook on June 30, 2011
Cliffs clearly has its vision set to draw the maximum possible
value out of the Bloom Lake iron-ore mines it recently added to its
North American operations with the acquisition of Consolidated
Thompson …
-
Upside & Downside Scenarios for BP's $54 Value on June 30,
2011
If there is a 6% annual growth in oil prices, then BP's realized
price per barrel would cross $110 by the end of the same period -
representing a 7% upside to the Trefis price estimate …
- First Solar to $144 if Local Ca. Governments Stay Away on
June 30, 2011
First Solar has already had to face the brunt of the local
government in the region charging commercial and utility projects
exorbitantly high figures for inspecting newly installed solar
arrays …
- Alcoa Could Reach $20 with Help from New Alloys on June 29,
2011
Alcoa claims that an aircraft made with the new alloy would be
about 10% lighter and would improve fuel efficiency by as much as
12% …
- Suntech's Improving Production Costs Support Outlook on June
28, 2011
Suntech Power continues to enjoy the advantages of the
Chinese government's incentives to local solar industry companies
and benefits considerably from the lower cost of labor in the
country …
- Liquidity Concerns Rise Over US Steel on June 28, 2011
With the global economy recovering and US Steel demand
recovering from the slump, steel prices are expected
to continue their upward trend for the remainder of 2011 …
- Dow Chemicals Benefits from Obama's Manufacturing Push on
June 28, 2011
As part of the AMP, Dow will develop solar, battery and
agricultural products and will also build new propylene and
ethylene plants in Texas …
- 3 Key Sources of Value for LDK Solar's Stock on June 27,
2011
The China Wafers division represents the company's sale of solar
wafers in mainland China. The solar wafers are sold to makers
of PV cells, PV modules and PV panels …
(Trefis Pro Exclusive) Industrials &
Transportation
- Framo's Deepwater Prowess Fuels Schlumberger to $105 on July
1, 2011
Improving hydrocarbon recovery has been a focus area at Framo's
home country of Norway, after crude oil production in the country
fell by almost 50% after a 11 years of decline …
- Schlumberger Learns Russian as Drilling Demand Takes Stock to
$105 on June 30, 2011
Russia holds the world's largest reserves of natural gas and the
8th largest reserves of oil, and local production giants such as
Gazprom and Lukoil have already announced aggressive plans to boost
reserves and production …
- Southwest Airlines Flies to $14 Unless Hedging Losses Eat
Profits on June 29, 2011
Hedging merely allows an airline to estimate with some certainty
the actual fuel cost, which makes up almost a third of the overall
operating expenses for most airlines …
- Key Growth Drivers for Boeing on June 28, 2011
We expect the company's DSS division to be subjected to higher
risk, as any cost over-runs would directly impact margins under a
fixed-price contract …
- FedEx Coverage Launch: $115 Trefis Price Estimate on June 28,
2011
By introducing the 777, FedEx Express can take market share from
competitors by increasing FedEx Express Package total volume and
FedEx Express Freight total freight pounds …
- Halliburton at Risk if Shale Economics Fall Short on June 28,
2011
While some participants voiced concern over the hype surrounding
the industry, others go as far as comparing the accounting and
forecasting practices in the industry with those that led to the
demise of Enron …
- Transocean Blames BP, Not Chipping in for Gulf Clean Up on
June 27, 2011
Transocean's report states that BP used a poor well design, and
did not assess the risks associated with the well properly - which
led to the accident …
