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Apple Watch takes centre stage at special event: Live updates

National Post Tech Desk - Mon, 03/09/2015 - 09:00

With its ‘Spring Forward’ themed invitation, Apple Inc. is expected to reveal final details of its new Apple Watch at a special event on Monday at the Yerba Buena Center for the Arts Theater in San Francisco.

The company’s first wearable device debuted at an event last September, but Apple hasn’t revealed official release information and many questions about how it works remain unanswered. Apple fans and analysts will be following closely to learn more about the watch’s apps, battery life, health features and more — especially since many smartwatches including the Pebble and Motorola Inc.’s Moto G have had a headstart in the wearables race.

Will Apple boss Tim Cook reveal any other tech surprises? The highly-secretive company is speculated to announce a redesign of its ultra-portable notebook, the MacBook Air — but will we see a new Apple TV or a larger iPad as well?

Join FP Tech Desk for live coverage of all the latest news, buzz and analysis of the event, which kicks off at 1 p.m. ET on Monday.

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BlackBerry Ltd shares sink after Goldman Sachs downgrades stock to Sell

National Post Tech Desk - Mon, 03/09/2015 - 07:31

BlackBerry Ltd shares sunk more than 6% in early trading Monday after the smartphone’s maker stock was downgraded by Goldman Sachs.

Analysts Simona Jankowski and Doug Clark cut their rating on the stock from Neutral to Sell, and lowered their price target by $1, to $9.

The analysts said though CEO John Chen has driven the stock up 60% since he took over, this year he must move the turnaround from just cutting costs to driving revenues — a more challenging phase that Goldman thinks will fall short of expectations.

They see bigger losses in fiscal 2016 and 2017 rather than the return to profitability that many expect.

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Jankowski and Clark write:

“We think the success of BlackBerry’s turnaround hinges on its ability to grow
its Enterprise Mobility Management (EMM) software business, where
competitors include Mobile Iron, Airwatch (part of VMware), and Good.
BlackBerry has set a target of $500mn in Software segment revenues for
FY16(Feb), up from $250mn in FY15. We expect it to fall well short of that
target and model revenues of $426mn, for two reasons. First, our surveys
show very low buying intentions for BlackBerry’s EMM solution. Second, its
target implies that it would leapfrog the market leaders in just one year, which
we view as unlikely given the competitors’ much better traction (based on our
survey). Meanwhile, we forecast below-consensus Service revenues (down
47% in FY16E). While we see significant upside in Hardware revenues, those
are “empty calories” as they are not profitable. Thus, we see widening losses
based on the shortfall in high-margin Software and Services revenues.”

 

Here are their three key points:

1. Software-driven turnaround likely to disappoint – BlackBerry has guided for
$500mn in Software revenues in FY16 (Feb), up from $250mn in FY15, as it ramps a new Enterprise Mobile Management business. We expect it to fall short as its target assumes that it can leap frog market leaders Airwatch, Mobile Iron and Good– contrary to our customer surveys. We model $426mn in Software revenues.
2. Expect losses to widen in 2016, prompting more restructuring – We expect
widening losses and below-consensus EPS as the legacy high-margin Service revenue falls faster than consensus expectations, while the new Software business grows slower than expected/guided. We model ($0.26) in FY16 EPS vs. consensus of ($0.12), worse than our estimate of ($0.19) in FY15E.
3. Expect sizeable miss in February quarter – While our thesis is primarily driven by our below-consensus view of Software and Services in FY16/17, we also expect a sizeable (13%) near-term revenue miss in the February quarter on weak hardware sales due to a delayed rollout of the Classic. However, we expect that to prove temporary, and expect Hardware sales to drive revenue upside to consensus estimates for FY16/17 on higher ASPs, though not contribute much to EPS given lack of profitability.

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