Intel Corp (INTC)

[VeeCee]

Some strange news. Apple using Intel baseband processors.
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This Morning: Apple’s Baseband Intentions, BlackBerry Upgraded, Pondering Intel
By Tiernan Ray

Here are some things going on this morning in your world of tech:

Shares of Oracle (ORCL) are higher by 12 cents, or 0.3%, at $40.94, after the company said this morning it would spend $5.3 billion in cash to purchase Micros Systems (MCRS) for $68 per share, a 3% premium to Micros’s $65.77 close on Friday. Mind you, Micros had run up on a week of speculation about such a deal.

Net of cash on Micros’s balance sheet, the deal costs Oracle $4.6 billion. Micros makes point-of-sale terminals such as those you might see in a restaurant being used by servers to ring up orders. Mark Hurd, Oracle co-president, said that “We anticipate delivering compelling advantages to companies within the Hospitality and Retail industries with the acquisition of MICROS.”

An Apple baseband?

Shares of Broadcom (BRCM) are down 6 cents at $38.22, as Cowen & Co.’s Timothy Arcuri this morning ponders whether Apple (AAPL) could be a buyer of the baseband wireless chip business Broadcom has put on the block. “We see some evidence to suggest AAPL could be a potential buyer of the assets and engineers,” he writes.

In the same breath, Arcuri asks whether Apple might switch to using Intel’s (INTC) baseband processors for an “iPhone 7,” given that the baseband unit of infineon Technologies AG (IFXA), which Intel purchased in August of 2010 for its own baseband effort, was the original supplier of baseband for the very first iPhone.

“Our work there continues to suggest some evidence AAPL has re-embraced INTC in a bigger way for discussions around iPhone 7 (2015) but we continue to feel this is ultimately more of a ploy to obtain pricing concessions from Qualcomm (QCOM) and AAPL is ultimately unlikely to choose INTC for iPhone 7,” writes Arcuri.

“Regardless, we believe this certainly lends credibility to INTC’s LTE baseband efforts.”

Lauding Intel

It’s something of a banner day for research on Intel. Pacific Crest’s Michael McConnell reiterates an Outperform rating on the stock, while writing that the rest of the PC chip landscape is not so rosy. He cut his rating on Nvidia (NVDA) and Advanced Micro Devices (AMD) to Underperform.

McConnell writes that “While improving corporate PC demand trends have buoyed PC supply chain metrics in Q2 […] we note that this demand trend only benefits Intel (25% to 30% sales exposure to corporate PCs, ~40% sales exposure including traditional server enterprise customers), with AMD and NVIDIA each having less than ~5% sales exposure to the corporate PC market.”

On a less sanguine note, Canaccord Genuity’s Matthew Ramsay writes that two things keep him at hold on the stock: competition in the server chip market from the likes of Applied Micro Circuits (AMCC) and Cavium (CAVM), which “could render 15% long-term [data center group] DCG growth targets too aggressive,” and a return to “mid-single digit secular PC declines.”

In praise of sensor, hub makers

Speaking of chips, McConnell’s colleague, John Vinh, reiterates Outperform ratings on sensor maker InvenSense (INVN) and sensor-hub chip maker NXP Semiconductor (NXPI), writing that “Following our Asia trip, we are more confident that the iPhone 6 will support NFC, the larger-screen iPhone 6 (5.5”) will support OIS (optical image stabilization) and Renesas SP drivers are expected to maintain their primary incumbent position in the upcoming iPhone 6,” all of which causes him to raise his estimates for both chip makers.

Brighter ‘Berry

Shares of BlackBerry (BBRY) are up 20 cents, or 2%, at $10.01, after Evercore Partners’s Mark McKechnie yesterday raised his rating on the shares to Equal Weight from Underweight, and raised his price target to $10 from $6, writing that he sees “ meaningful progress in John Chen’s turnaround plan,” including “stabilizing cash burn (opex & HS outsourcing) and a good plan to hold onto the core subscriber base (EZ Access, BES12 in November).”

Nokia’s nicer prospects

Also on the upgrade path today, Raymond James’s Simon Leopold raised his rating on shares of Nokia (NOK) to Market Perform from Underperform, writing that “The sale of the Devices & Services business to Microsoft strengthens the balance sheet, lifts margins, and positions the company for top-line growth.”

“As we consider the longer term, we see Nokia on a promising trajectory from diversification into higher growing areas but with the wireless market maturing and the next cycle involving small cells not having significant impact, we view the shares as fairly valued and we would stay on the sidelines.”


http://blogs.barrons.com/techtraderdaily/2014/06/23/this-morning-apples-baseband-intentions-blackberry-upgraded-pondering-intel/