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Apple Gets Beats, Intel Eyes China - Analyst Blog

While markets opened higher last Tuesday, some companies built on the lead with encouraging announcements right through the week:

Apple Adds Beats to Music Business

Apple ( AAPL ) has finally confirmed that it is acquiring Beats Electronics for $3 billion in cash and equity. Aside from the fact that this helps it differentiate its own music streaming service and acquire talent, Beats has the rare distinction of being profitable. Most other streaming businesses struggle with marketing expenses since a huge chunk of subscription fees have to be paid out as artist royalties. Beats has solved the problem with a specialized bit of hardware (headphones) that is reportedly generating a billion dollars in annual revenue.

Amazon Joins the Fray…

The music business is changing, with streaming companies eating into product sales. This has prompted online retailer Amazon.com ( AMZN ) to announce its own music streaming service. The service will be free for Prime subscribers, but the songs currently being offered will be at least six months old. Amazon has signed up a couple of music companies, but if it is able to generate sufficient volumes, it may be able to enter to into more profitable agreements and get more recent tracks into the fold.

Intel Leans on Rockchip to Target China

Intel ( INTC ) has signed an agreement with fabless SoC-maker Rockchip to target the low-end and entry-level Android-based mobile devices market in China. In addition to the joint development of an SoC under the Intel brand that will be manufactured by Taiwan Semiconductor Manufacturing Company ( TSM ), the agreement seeks to leverage Rockchip's marketing relationships in China. Rockchip remains an ARM licensee, but Intel can be the ultimate winner if it can take some share before moving production in-house. TSM will be using a 28nm process, which Intel can bring down to 14nm.

Microsoft Gets Into Wearables

Microsoft ( MSFT ) is being rumored to have a wearable device up its sleeve. Forbes says it's a wrist watch with a number of sensors for continued heart rate monitoring and a display on the inside of the wrist to make the readings more private. The device will likely synch with iPhones, Android phones and Windows Phones.

Microsoft is being very tight-lipped about the whole thing, just as it was when it picked up important wearables IP (connecting watch-type devices with head-mounted devices) from Osterhout Design Group for a reported $150 million back in March. But confirmed or not, investors are rejoicing, sending share prices up 2.6% following the news.

Company Last Week Last 6 Months
AAPL +1.18% +14.83%
FB -0.28% +34.51%
YHOO -1.34% -6.38%
GOOG -1.07%
GOOGL -0.56% +8.31%
MSFT +1.87% +6.48%
INTC +2.28% +15.27%
CSCO -0.36% +16.74%

GOOG = Class C shares (new, non-voting)

GOOGL = Class A shares (old, 1 vote per share)

Nasdaq +1.91%

Other stories you may have missed -

Google Announces Autonomous Driving : At the Code Conference held last week, Google ( GOOGL ) said it had developed prototype cars that eliminated the need for steering wheel or breaks, instead using sensors and software to automate the driving process. It's not clear yet whether Google will be partnering with automakers, licensing them the technology or making the cars themselves, but it promises that the cars will be on the streets before the year is out.

Facebook to Cut Back On Auto-sharing

Intel Collaborates to Build VIM Platform

Microsoft And Salesforce Join Hands

IBM Servers Could Be At Risk : Chinese officials have expressed concern about the security of banking and government data when stored in IBM ( IBM ) servers. They are now asking for the replacement of IBM servers with servers from local brands. The U.S. government's spying activities have severely hurt technology companies like Cisco ( CSCO ) and IBM and more could follow in the next few months. But this sanction could also be related to the recent indictment of five Chinese military officers who had been accused of hacking into computers belonging to some U.S. companies.

Twitter Surges on Omnicom Deal

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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