Archive for December, 2009

Apple Tablet Rumors and Details

December 31st, 2009 No comments

-details from ex-Google China executive Kai-fu Lee, who supposedly has great connections with Taiwan manufacturers. He was also recruited by Steve Jobs to join Apple
-sell for less than $1000
-first year output of 10 million units
-looks like a large iPhone
-10.1 inch screen
-video conferencing with web-cam

Categories: News

Google Nexus One Pricing

December 31st, 2009 No comments

-$530 unsubsidized
-$180 2 year contract with T-Mobile
-one rate plan $39.99 Even More + Text + Web for $79.99 total

Categories: News

Holiday 2009 Mastercard Spending Pulse Data

December 28th, 2009 No comments

-retails sales +3.6% from November 1 to December 24th
-factoring out extra shopping day, it was 1%
-online purchases +15.5%
-luxury +0.8%, jewelry +5.6%, men’s apparel +3.9%, women’s apparel -0.3%, specialty apparel -0.4%, electronics +5.9%

Categories: News

Channel Checks – GME TRLG BBY

December 28th, 2009 No comments

Gamestop – the promotions of “buy 2 used games get 1 free” and “$20 extra trade-in credit for 4 games” attracted mass crowds. I visited 3 stores and all had super long lines. They were sold out of New Super Mario Bros. Wii and the 120GB PS3. I saw a kid trying to trade-in his Wii system and games for a PS3

True Religion – at a local T.J. Maxx my wife noticed a lot of True Religion jeans for $99. She shops there a lot and this is first time she saw them

Best Buy – I never seen the parking lot of a local Best Buy this crowded last Sunday. I walked in and saw only 3 people at the register line. Then I turned around and saw 30-40 people on the customer service returns desk

Categories: News

Palm (PALM) November 2009 Q2 Earnings Notes

December 28th, 2009 No comments

-earnings -37c vs. -32c est. revenue $302M vs. $266M est.
-new WebOS update at CES, Pixi will be faster. >800 apps
-investing heavily in marketing
-Q2 ASP $375 vs. Q1 $427
-80% of sell-through was WebOS devices
-lower than expected sales at Sprint
-Will dramatically ramp TV ads with new marketing campaign later this quarter
-gross margin mid/upper 20s second half of fiscal year
-will use over $80M in cashflow from ops in Q3. 360M secondary in September
-second half additional carriers revenue should be up q/q
-still expect revenue to be $1.6-1.8B for year

-SG&A to increase sequentially next 2 quarters
-foundation of guidance is 2H-FY launch commitments
-“priority” is to gross installed base. hard to project ASP as it depends on mix
-small family of really great products
-gross margins go up on higher revenue numbers
-tens of thousands of SDK downloads. haven’t fully opened developer program yet
-2 year roadmap of products. gotten great feedback from carrier partners on that roadmap
-nothing to do with price war between Amazon and Walmart. very small % goes through those online channels

-analysts are really worried about new Google Android product launches
-80M cash burn in Q3. enough said

Categories: News

Research in Motion (RIMM) Q3 November 2009 Earnings Notes

December 19th, 2009 No comments

Press Release
-Revenue $3.92B (3.78B est.), +41% y/y. 10.1M units shipped
-EPS 1.10 (1.04 est.), gross margin 42.7%
-4.4 million net adds, 36 million subscribers
-$4.33 net cash/share

-Q4 revenue $4.2-4.4B (4.11B est.), EPS 1.23-1.31 (1.12 est.)
-Gross margin 43.5%, net adds 4.4-4.7M, units 10.6-11.2M
-$275M cap ex, ASP $320

Conference Call
-first time ever they shipped over 10M units. 75M shipped-to-date
-530 carriers in 170 countries
-announced agreement with China Telecom
-webkit browser in CY2010
-Blackberry Messenger 5.0 in Q3
-purchased 12.3M shares $775M at average price of $63
-9M new devices activated
-$1.1B cash from ops

-ARPU flat in the quarter
-carrier capacity “reckoning” going on right now
-small number of smartphone platform players
-Blackberry Messenger is exploding becoming “the youth thing”
-“Love what you do” ad campaign is a home-run in brand awareness (seemed defensive on it)

-At $70 RIMM is trading at 13Xs $5 earnings power ex-cash
-Nice beat and raise quarter

Categories: News

Mary Meeker Mobile Internet Report Notes

December 16th, 2009 No comments

-466M YouTube users (+35% y/y), 42M Hulu users (+77% y/y), 521M Skype users (+41% y/y), 430M Facebook (+137% y/y), iPhone/iTouch 57M (+163% y/y)
-Apps: Facebook 350K, iPhone 100K+, Android 15K, Blackberry 3.5K, Palm 525, Nokia 6K, Samsung 3.7K, LG 1.4K, SonyEricsson 3.7K
-58M Twitter users (12X y/y), 50M LinkedIn users
-Zynga $67M revenue 2009E, 183M active monthly users, 36 apps
-Playfish $30M revenue 2009E, 60M active users, 10 apps
-Zynga’s Farmville went from 354 users in 6/20/09 to 29M in 8/09

Net-net: Apple iPhone, Facebook, and Google Android are the long-term winners. RIMM, Nokia, SonyEricsson, and Nintendo not so much

Categories: News

Best Buy (BBY) Q3 November 2009 Earnings Notes

December 15th, 2009 No comments

Press Release
-revenue $12.02 billion (11.98B est), EPS 53c (43c est)
-comp store sales +1.7%, gross margin 24.5%, operating margin 3.1%
-domestic same-store sales improved sequentially each month of the quarter finishing with 8.4% comp in November
-positives: notebooks, flat panel TVs, cellphones, appliances, cameras. negatives: gaming, music, movies
-international comp -4% ex-FX

-revenue FY2010 $49-49.5 billion (48.6B est)
-EPS $3.00-3.15 (2.95 est)
-“the company anticipates a lower fiscal fourth quarter gross profit rate than previously expected”

Conference Call
-Black Friday low double-digit comp driven by 1/2 traffic and 1/2 higher average ticket
-November gift card sales +40% y/y, 100% y/y on Friday/Saturday of Thanksgiving weekend
-Christmas is coming later. They will effectively use bundling
-flat panel TVs low double-digit y/y, music/movies negative low double-digit y/y, gaming negative high single-digit y/y
-domestic traffic +3% y/y. average ticket up slightly
-expect Q4 domestic gross margin to be 80-100bps lower

-weaker gross margin is “principally mix” driven. They will drive revenue in computers and entry-level TVs. 75% higher sales of lower margin products, 25% anniversarying last year’s unique vendor buys
-computing growth strong and they are gaining market-share. net-books and notebooks doing well
-flat panel ASP -17% y/y, -22% dollar per inch y/y

-November quarter was fine. However the weaker gross margin guidance for the holiday quarter clocked the stock 8.5% today to $41.53. Not surprising as the company was at its 52-week high
-comp sales continue to improve month by month
-laptops and net-books were very strong. Music/movies/gaming remain weak
-At $41.53, it’s trading at 13.5Xs earnings power of $3.075

Categories: News

Jim Chanos CNBC Interview Notes

December 15th, 2009 No comments

-“never get the top-tick and never get the bottom-tick. Anyone that says they do is probably (lying)”
-“stick to things we can fundamentally analyze”
-“bubble is best identified by credit excesses not valuation excesses”

-short the auto sector (Ford, Fiat) and airframe manufacturer
-China GDP numbers are inflated. Short the H shares and derivative plays like commodity suppliers (copper, cement, iron ore)

Categories: News

NPD U.S. November 2009 Thoughts

December 13th, 2009 No comments

-Modern Warfare 2 (Activision/Infinity Ward) blockbuster record breaking launch. 6.07 million units
-New Super Mario Bros. Wii (Nintendo). 1.4 million units. I expect this one to have long legs

-Uncharted 2 (Sony/Naughty Dog) disappeared out of the top 20 after being number one last month. Stunning decline for probably the best game this year. I feel bad for Naughty Dog because they deserve better
-Borderlands (Take-Two/Gearbox) dropped big from last month
-Dragon Age Origins (Electronic Arts/Bioware) had a tepid launch with 362K units sold on 360. These are not the kind of numbers you pay $775 million for
-Tony Hawk Ride (Activision) had a disastrous launch with only 114K units sold
-Music games (Activision/Electronic Arts/Harmonix-Viacom). Where are Band Hero? Rock Band Beatles? and DJ Hero? Poof gone. No wonder Harmonix laid off 13% of its staff. This genre may be a one hit wonder fad
-GTA: Episodes from Liberty City (Take-Two) sold under 160K retail in October and November. It’s clear Rockstar would of been better off not doing DLC and doing a traditional Vice City type retail marketing launch
-Michael Pachter (Wedbush Securities). I don’t get how Michael can be repeatedly SO WRONG and still be the most famous sell-side videogame analyst with the most press. Let me cite just a selection of his whiffs in the last few months. 1) Buy Gamestop (went from high 20s to low 20s) 2) Brutal Legend to sell millions of copies (off by a few million) 3) Nintendo will launch Wii HD (directly denied by the company) 4) GTA: Episodes from Liberty City will sell 2.25-2.75 million at retail (it sold 160K)
-Forza Motorsport 3 (Microsoft) disappeared after last month’s launch. It’s a quality game too. This doesn’t bode well for Gran Turismo 5 next year

-Overall numbers were a disaster. If you have negative software comp when your hardware installed base is 16.5 million units bigger y/y in the month of the biggest game launch ever, that’s pathetic

Categories: News