Rebecca Day

Canalys, which had forecast a 7 percent decline in smartphone shipments from Q4 to Q1 -- and an 8 percent drop in PC shipments -- “dramatically revised” projections to a 40-50 percent drop for smartphones and a 20 percent falloff for PCs based on currently available information on coronavirus impact.

Sonos is “pleased” the International Trade Commission “confirmed it will initiate a formal investigation into all of our claims asserting Google blatantly infringed our intellectual property,” emailed a spokesperson Friday. “We’ll fully cooperate throughout the duration of the investigation and feel confident about the merit of our case.” The ITC voted 4-0 to open a Tariff Act Section 337 investigation into Sonos allegations that Google smart speakers and other devices infringe its multiroom audio patents (see 2002060070). The agency declined comment Friday on Commissioner Rhonda Schmidtlein’s recusal from the vote. The investigation was assigned to Chief Administrative Law Judge Charles Bullock, said a notice to the parties.

Sonos Chief Legal Officer Eddie Lazarus said “quite a few players” in wireless multiroom audio are “infringing on our patented inventions,” on a quarterly call. The company is hopeful discussions will “bear fruit” financially, said Lazarus, who was FCC chief of staff under then-Chairman Julius Genachowski. The company views licensing talks as a long-term proposition. CEO Patrick Spence cited a successful outcome in litigation against Denon and current patent infringement complaints against Bluesound parent Lenbrook and Google (see 200206007). Separately, Sonos irked customers recently by saying it would no longer support older gear. Spence said the company didn’t get its communication right when it made the legacy product announcement. He underscored efforts to move long-time customers “into the latest and great products” via its trade-up program offering a 30 percent discount on new products. Shares closed 12 percent higher Thursday at $15.76 after fiscal Q1 sales rose 13 percent year-on-year to $562.1 million.

Spotify shares closed down 4.7 percent Wednesday at $147 after the company reported Q4 revenue of $1.85 billion, below its forecast of $1.89 billion. The company reported an earnings-per-share loss of $1.22 vs. a year-ago gain of 41 cents. It agreed to buy sports podcast service Ringer. That brings more “lifestyle value” and marks a trend of things to come, said Spotify CEO Daniel Ek on the company’s earnings call. The deal is expected to close this quarter.

Google hardware revenue fell in Q4 vs. the “fairly strong” hardware growth rate in the year-ago quarter, said Chief Financial Officer Ruth Porat on parent Alphabet’s Monday earnings call. A “difficult hardware comparison” included the launch of the Pixel 3 last year, Wedbush analyst Michael Pachter wrote investors Tuesday. Overall revenue grew 17 percent to $46.1 billion, below analysts' consensus of $46.94 billion. Revenue in the “other" line -- Google Play, hardware and YouTube's Premium, Music and TV subscription offerings -- rose 10 percent to $5.3 billion, due to growth in YouTube and Play, offset by declines in hardware, said Porat. Google’s “other bets” had a $2 billion operating loss, vs. a $1.3 billion loss, said the company. Pachter noted in other bets that Alphabet “has the luxury of funding its experiments” in artificial intelligence, “self-driving cars, high speed Internet and various new hardware initiatives while continuing to generate growing losses.” He’s “skeptical that many of these initiatives will pay future dividends.”

A manufacturer of radiation reduction accessories published findings from an independent testing lab Tuesday, claiming the iPhone 11 Pro emits “more than twice the FCC’s legal safety limit for radio frequency (RF) radiation from a cellphone.” The test could be an indication other phones expose users to more radiation than legally allowed, it said.

ON Semiconductor shares closed down 14 percent Monday to $19.91 after its Q4 report included a 7 percent year-on-year revenue decline to $1.4 billion. Results were primarily driven by “challenging macroeconomic and geopolitical conditions,” said CEO Keith Jackson. ON had unexpectedly high demand for a low-margin product line in its consumer segment in Q4 and expects the trend to continue through Q1. The chipmaker will discontinue the product line or significantly raise prices after Q1, said Chief Financial Officer Bernard Gutmann. The semiconductor industry's pace of recovery is “moderate” vs. a sharp uptick in demand, said Jackson. Key segments for the future include advanced driver-assistance systems and 5G infrastructure, he said. The company expects to outperform most peers in automotive, industrial and cloud-power semiconductor end-markets.

Concerns mounted last week that China's coronavirus could affect U.S. tech and other supply chains. Apple (see 2001290020) and Silicon Labs (see 2001290020) were among those discussing the outbreak. "The escalating coronavirus crisis is impacting production at display panel factories located in the semi-quarantined city of Wuhan, China, spurring a significant near-term reduction in the global supply of panels used in liquid crystal display televisions (LCDs) and other products," wrote IHS analyst David Hsieh Friday. "Leading Chinese suppliers of LCD panels for TVs, notebook PCs and PC monitors now are planning to raise panel prices more aggressively." Contract manufacturer Flex deployed “response teams” in China, taking “proactive steps” to help employees weather the coronavirus outbreak, said CEO Revathi Advaithi Thursday evening on a call for fiscal Q3 ended Dec. 31. “We are actively monitoring this developing situation, and we'll work hard to limit business disruptions.” It’s too early to “quantify any potential impact as the situation is evolving,” she said.

5G smartphone customers attending Sunday's Super Bowl at Verizon 5G Stadium in Miami will get access to a multi-camera live-view feature via the NFL OnePass app, said the carrier and the NFL Wednesday. Verizon’s 5G Ultra Wideband service is available in parts of the stadium, where demos are planned.

Traditional pay-TV offerings will evolve to become “indistinguishable from a pure” over-the-top package of services, said ABI Research analyst Michael Inouye. Though cord cutting is often seen as “a consequence of expanding OTT consumption,” the market dynamics “are more complex,” Inouye said Tuesday, noting the pay-TV industry embraced OTT “as a complement and value-additive.” The OTT video market will top $200 billion by 2024, 90 percent fueled by subscription and advertising revenue, ABI said. The remainder will include digital purchases, electronic sell-through, rentals and transactional video on demand, Inouye emailed us. Disney Plus and Apple Plus, with aggressive pricing and packaging, plus continued expansion by long-term players in the subscription VOD market, are pushing the segment to new highs, ABI said. There are 700 million-plus OTT SVOD subscriptions and 1 billion for pay TV market.