The coronavirus pandemic is both helping and hindering Cirrus Logic. Sales increased 2% in fiscal Q1 ended June 27, mainly from “higher content and volumes” in tablets, “as people worldwide continue to work from home due to COVID-19,” said a shareholder letter Monday. “Large chunks of the Android space have suffered the turbulence in the COVID-19 environment,” said President John Forsyth on a Monday investor call. “That's a reflection of just the kind of progressive lockdown around different markets.” Some Android vendors rely heavily on “distribution channels that they don't control,” making them a "bit more susceptible” to downturns during the crisis, he said. Android companies have taken “a fair amount of buffeting” during the pandemic, said Forsyth. Cirrus hopes much of that “stuff” will be “behind us as we go into the next few quarters,” he said. The company is emphasizing tablets and laptops more than historically, but the strategy predates the novel coronavirus and the “transition of large parts of humanity to working from home,” said Forsyth: “There's certainly renewed interest in those segments.” Google, maker of the Android operating system, didn't comment Tuesday. The company's stock closed down 8.1% at $68.43 Tuesday.
Emerald canceled 60 events through Q3 due to the COVID-19 pandemic, and some beyond this year, with $197 million in 2019 revenue, said interim CEO Brian Field on a Q2 call Monday. The company postponed 14 events to second-half 2020 that had $8 million in 2019 revenue. Its shows include CEDIA Expo, canceled as a physical show next month in Denver and rescheduled as a virtual show Sept. 15-17 (see 2007090070). Emerald plans to reinstate the Expo as a physical show in September 2021 in Indianapolis. Its $7 million in Q2 revenue compared with $103 million in the 2019 quarter, the result of 20 cancellations, said Chief Financial Officer David Doft. Insurers paid $48.2 million. The show producer owed $45 million in refunds June 30, said Doft. On upcoming conferences, Field noted varying approaches cities and states are taking toward reopening. It’s looking over the next few months to see “where there's still a viable show that can take place safely and working with the local venue management.” Webinars and virtual events “have many of the same features” of live events, including keynotes, awards and virtual booths, said Field, “allowing our exhibitors to load their products and host virtual meetings with buyers.” Customers say this won’t replace the value of in-person shows, he noted: Emerald believes in an emerging hybrid model where virtual components will complement live events “once the medium is safe."
Two more radio broadcasters reached settlements with the FCC Media Bureau over self-disclosed political file violations, said consent decrees posted in Monday’s Daily Digest. Sumter Broadcasting and WHOC told the agency their stations hadn’t fully complied with the political file rules, the decrees said. Similar to a host of recent cases (see 2007300054), the bureau cited the pandemic and the broadcasters’ self-reporting in their license renewal applications as reasons for the settlements, which don’t include monetary penalties. The broadcasters will have to follow a compliance plan to prevent future violations, and their renewal applications will be processed.
Groups urged the FCC to reject requests for a waiver of the June 30 deadline to offer real-time text instead of traditional text technology filed by the Competitive Carriers Association, U.S. Cellular and East Kentucky Network (see 2007010045). Comments were due Friday in docket 16-145. Telecommunications for the Deaf and Hard of Hearing, National Association of the Deaf, Hearing Loss Association of America and others filed joint comments, posted Monday. “When the Commission issued the RTT Order in 2016, it may have anticipated some deviation from the estimated transition timeline, and we acknowledge that the COVID-19 pandemic has introduced additional complexity,” they said: “But the Commission did not condone, and should not now permit, a poorly executed transition that risks Americans losing access to 9-1-1 services for an indefinite period of time.” As carriers retire TTY “without RTT access to 9-1-1, people will die,” they said. The groups filed the only comment.
Accuracy in Media launched a campaign urging Senate Majority Leader Mitch McConnell, R-Ky., not to allow media entities to be eligible for the Small Business Adminstration-administered Paycheck Protection Program as part of the next COVID-19 aid bill. Lawmakers and media groups have been pushing for broadcasters and other outlets to be made eligible for PPP (see 2007290041). The House passed the Health and Economic Recovery Omnibus Emergency Solutions Act (HR-6800) in May with such a provision (see 2005180056). If “radical Left newspapers fail, it’s entirely possible that better alternatives can take their place,” AIM said Monday. “Unfortunately, the media have intimidated bipartisan coalitions in both houses of Congress into supporting a bailout. The only person who stands between the media and our tax dollars is” McConnell. Americans for Tax Reform President Grover Norquist wants federal agencies to spend their ad budgets for existing programs on local media outlets, citing the drop in local overall revenue. “Making sure that local stations are able to continue to operate throughout the pandemic to provide vital updates and information is critical, and government is in a unique position to support local television and radio broadcasters through this crisis without going to the taxpayer well,” Norquist said in a letter to OMB Director Russ Vought that NAB released Monday. “Considering the vital role that local news plays in keeping communities informed and connected, especially during emergency situations, advertising on local mediums can help disseminate critical government messages during this crisis and recovery.”
Trends forged during the atypical 2020 season for back-to-school (BTS) shopping could have staying power, said Forrester analyst Brendan Witcher on a Monday RetailMeNot webinar. It might seem “a smart thing” to get as many customers into the store as possible, he said, “but that’s actually the wrong move.” Consumers during the COVID-19 pandemic “don’t want to walk into a crowded store,” said the analyst. Employees don’t want to work in a crowded store, either, he noted. Witcher encouraged retailers to publicize their stores’ safety protocols in their marketing messaging. Shoppers are preparing for the BTS season amid overall uncertainty about the virus and school policies, many faced with physical challenges of where to shop and whether they should pick up items in store or have them shipped. Witcher has been recommending that his retail clients put together BTS bundles that make sense for home schooling, “so that no matter where this pandemic takes us, you’re prepared to offer the right kinds of products to your consumers.” A May RetailMeNot survey said BTS spending would be up this year to $532 from an average $507 in 2019. Witcher said families trying to share computers are learning “what it costs to support a child in school who might have to do home or distance learning.” Flash drives, mice and tablets could push tech spending higher, he said. Having multiple alternative shopping options will be especially important this year, said the analyst, noting curbside pickup was the top investment retailers made during the COVID-19 lockdown period. He cited one large retailer that said its pre-pandemic buy online, pickup in store business was 60% of orders. Last week, the retailer reported its BOPIS business is four times that of ship-to-home. Part of that, Witcher said, could be “fear of returning” to a store if a product isn’t what the customer is seeking. Those trends are expected to continue into the holiday season.
The pandemic spurred “historic” growth in demand for most consumer tech products since March, Stephen Baker, NPD vice president-industry adviser, technology and mobile, told the Display Week virtual conference (see 2008030053) in a prerecorded segment streamed Monday. “We’re seeing broad-based growth in the consumer electronics business,” with most categories “doing fabulously,” he said. Demand is growing “in ways that we’ve never seen,” said Baker. “This is a broad and deep growth opportunity across all of the consumer electronics market.” Amid stay-at-home mandates, “tech is no longer a discretionary spend,” he said. “It really is a necessity. More than many, many general merchandise categories, tech demand leverages its strengths in entertainment, in work from home, in education from home.” The momentum is “likely to provide us with some staying power for technology sales, regardless of what the overall economy looks like over the next few quarters.” The “success of online” now is the “biggest story” in consumer tech, said Baker. “We’re here to tell you that in-store has likely passed its peak.” Price and product are now “much more important than place,” he said. NPD estimates consumer tech retail sales grew 24% in Q2, racking up $5 billion in “incremental” revenue, said Baker. “Four of the five busiest non-holiday weeks NPD has ever tracked” came in Q2, he said. The industry did slightly more than $1.75 billion in sales the third week of March when much of the U.S. went into quarantine, he said. “We thought that was an enormous week that would never be repeated. That was one of the smallest weeks we’ve seen in the last four months.”
Libraries are increasingly taking on the role of filling gaps caused by a lack of broadband access, and the pandemic exacerbated the issue, said librarians, educators and digital access nonprofits during the FCC Advisory Committee on Diversity and Digital Empowerment’s virtual workshop Monday. Libraries lending mobile Wi-Fi hot spots to patrons is a “Band-Aid” for the larger issue of web access, said Lisa Shaw, workforce development specialist for the Maine State Library. “When you’re bleeding, you need a bandage, and we’re bleeding very heavily.”
Google is under regulatory “scrutiny,” and “we realize, at our scale, that's appropriate,” said CEO Sundar Pichai on a Q2 call Thursday evening. “We've engaged constructively across jurisdictions.” Google “will operate based on the rules,” he said. “The scrutiny is going to be here for a while, and so we are committed to working through it.” Pichai denied in testimony Wednesday his company threatened to delist Yelp (see 2007290063). Consumers’ shift to online during the COVID-19 pandemic is “profound,” said Pichai. “We see people engaging a lot, doing newer things.” Their interests are broadening, he said. Google Meet has been “absolutely critical” during the crisis, he said. “We quickly reengineered it and made it available widely to help millions of other businesses and organizations connect and collaborate.” During the quarter, “we peaked at more than 600 million Meet participants in a single week,” he said.
Apple’s record fiscal Q3 revenue of $59.7 billion, up 11% year on year, was due to a “strong iPhone SE launch,” continued economic stimulus and lifting of shelter-in-place restrictions around the world, said CEO Tim Cook on Thursday’s earnings call. (For quarterly materials, see here.) Growth spanned all regions in the quarter ended June 27. IPhone revenue returned to growth -- up 2% to $26.4 billion, 11% shipment growth to 26.4 million -- but the next-generation iPhone lineup will be delayed, said Chief Financial Officer Luca Maestri. Last year, Apple began selling the 11 Series in late September. This year, “we project supply to be available a few weeks later,” said Maestri. Other product categories are expected to have “strong year-over-year performance,” he said. Though wearables shipments grew in the June quarter to 6.4 million from 5.5 million, growth slowed, which Cook attributed to store closures during the pandemic. Apple Watch customers like to shop for bands when making a purchase, he said. Subscriptions grew 35 million to 550 million, on target to hit 600 million this year, Cook said. Apple expects a strong back-to-school season and has “some optimism” about the December quarter. “We need to see a vaccine or therapeutic or both, and there's some optimism around that in that particular time frame,” Cook said. “That would boost consumer confidence quite a bit if it began to happen.” The stock, which the company is splitting, closed up 10% Friday at $425.04.