Increased "working and schooling from home" due to COVID-19 resulted in a strong PC market in Q2, said Advanced Micro Devices CEO Lisa Su on a Tuesday investor call. Desktop processor sales declined sequentially, but AMD had record quarterly unit shipments and revenue in laptop processors. AMD 90 days ago expected COVID-19-related weakness to bring the PC market down in the second half, she said: It’s now expecting PC processor sales will grow. The pandemic increased the “overall” PC market and stimulated a “strong shift from desktop to notebooks,” she said. “The second half will continue to be good for notebooks and PCs overall and that's part of this idea that PCs are now essential.” The stock closed 12.5% higher Wednesday at $76.09.
The pandemic is creating challenges and “opportunities for us and our industry,” supplying headsets for COVID-19's “hybrid work environment,” said Poly interim CEO Bob Hagerty on a quarterly call Tuesday. “Hybrid working trends are here to stay.” It’s estimated 30% to 40% of employees globally “will continue to work from home, with many adopting a flexible work schedule, splitting their time between the office and home.” The “net effect” is a bigger total addressable market “and a long-term growth opportunity for our company, which we are working aggressively to capitalize on,” he said. Headset demand remains “elevated,” putting stress on Poly’s supply chain, said Hagerty. “Our factory in Mexico is capable of running at full capacity, but we are having to flex our production based on component availability.” The stock closed 17.4% higher Wednesday at $21.89.
The State Department’s Directorate of Defense Trade Controls is considering permanently revising international traffic in arms regulations so industry employees involved in ITAR can work remotely, said Wednesday's Federal Register. DDTC said, due to industry requests, it will extend through this year temporary telework measures, which had been set to expire July 31. The agency will use that time to “fully investigate the possibility and ramifications of making this modification, or a variation thereof, a permanent revision,” and may seek comments. DDTC said the extension will “provide regulated entities with staffing flexibilities” during the pandemic and it seems "regulated entities will continue to engage in social distancing measures for the foreseeable future.”
“Size and sophistication” of online attacks “has risen dramatically” with the pandemic’s spike in internet traffic, said Akamai CEO Tom Leighton on a Tuesday investor call: “Threat actors” are taking advantage of the “distraction and vulnerabilities created by employees working remotely.” Malware reports to Akamai jumped nearly fivefold in Q2 from the previous quarter, he said. Nearly half the content on a typical website “originates from third parties,” estimated Leighton. “Attackers are embedding malware in this content to steal users’ credit cards and other personal data.” Theft of login credentials “is another growing problem,” he said. “We blocked more than 53 billion credential abuse attempts last quarter, more than four times the number we saw in Q2 of last year.” Demand for the company's media and security services “more than offset” revenue downturns from the travel and hotel industries and other sectors “hit hardest by the pandemic,” said Leighton: Churn “stayed below 1% of annualized revenue.” Chief Financial Officer Ed McGowan estimated Akamai took a $14 million Q2 hit from COVID-19, mainly through “contract restructurings and elevated bad debt reserves.” A 13% revenue gain and 29% profit increase reflected a “continuation of the high traffic levels” on the internet since the onset of the pandemic, said Leighton. Peak traffic exceeded 100 terabits daily, he said. “That’s a lot of traffic.”
COVID-19 has been a mixed bag for Spotify. Monthly active users in Q2 grew 29% year on year to 299 million, at the top end of guidance, said Wednesday's shareholder letter. Ad revenue fell to $154 million from $194 million. Revenue rose to $2.22 billion vs. $2.17 billion. Quarter to date through May, ad-supported sales fell 25% vs. 2019, said CEO Daniel Ek on a call: “Big declines” were due to the COVID-19 pandemic but improved to 12% lower in June. Pandemic-related softness in April and May, including payment failures by Premium users in Latin America and emerging regions, were offset by strength in North America and other areas. Struggling regions rebounded in June, with increased reactivations and slower churn. Overall listening hours in June returned to previous levels, Spotify said. Consumption trends by platform “are beginning to normalize,” with in-car listening at the end of Q2 less than 10% below pre-COVID-19 levels; they sank as far as 50% year on year in April. Spotify stock has jumped about 70% since the company signed comedian Joe Rogan to an exclusive podcast deal in mid-May, noted Pivotal Research Group's Jeffrey Wlodarczak in a Wednesday investor note. The analyst attributed the spike to “hope that Spotify can eventually become” like Netflix with “exclusive podcast content helping to drive higher subscriber growth, lower subscriber churn, increased engagement, greater ability to move consumers from the free funnel to premium and eventually reverse negative ARPU [average revenue per user] trends.”
The Broadband Deployment Advisory Committee's Disaster Response and Recovery Working Group reported Wednesday on progress on a pandemic report assigned by the FCC. One theme is that access to broadband overrides all other issues raised by COVID-19, officials said during the group’s quarterly meeting, held virtually. A final report should be ready for BDAC’s next meeting in October, said Red Grasso, WG chair who represents the North Carolina Department of Information Technology. “We’ve been pretty aggressive.”
As the U.S. moves toward 5G, it should focus on modular architecture with open interfaces, which would make networks less reliant on equipment vendors Huawei, Nokia, Ericsson and Samsung, the Center for a New American Security said Tuesday. The U.S. “has the opportunity to regain momentum by taking a fresh approach to 5G” in the aftermath of COVID-19, CNAS said. It warned the pandemic will likely slow deployments. It said: “A modular architecture allows an operator to choose multiple vendors for a range of offerings, rather than being locked in with a single large integrated vendor. Open interfaces -- the ability of equipment from any vendor to work with that of another -- make that possible. Such a shift means upending the industry status quo.”
Incompas’ show scheduled for Sept. 14-16 in Las Vegas will be virtual. “As much as we all had hoped to be able to meet in person this September … the well-being of our attendees and exhibitors takes precedence," said CEO Chip Pickering. “Given the uncertainty surrounding the coronavirus pandemic, we will be moving to an all-virtual 2020 INCOMPAS Show.” Earlier Tuesday, CTA did the same with CES 2021 (see 2007280034). Our news bulletin is here. (It's in front of the pay wall, like some other coronavirus coverage.)
CTA’s decision to scratch CES 2021 as a physical event gives the association five months and nine days to craft an online experience that outdoes that of most virtual trade shows run during the pandemic, officials said. “Moving to an all-digital format for CES is simply the right thing to do,” said CEO Gary Shapiro by video. “Our exhibitors partners and thought leaders will now have the time to plan, to think, to create compelling ways to engage digital audiences from around the world.”
USTelecom's Industry Traceback Group (ITG) is the official consortium for coordinating industry-led efforts to trace back the origin of suspected unlawful robocalls, the FCC Enforcement Bureau said Monday. The Traced Act directed the FCC to put together rules for a single consortium heading those private-led efforts, and the FCC in March adopted rules governing that consortium (see 2004170021). In the order appointing ITG, the bureau said it was the only applicant and is both neutral and competent to shepherd the efforts. “The message this sends to would be robocall scammers is loud and clear: we’ve got your number," USTelecom said, adding that it's "an important recognition of our technology, our commitment and our success fighting the scammers and spoofers who pollute our shared communications networks with these illegal robocalls." It said its team of wireline, wireless, VoIP and cable providers is "focused on tracing the source of illegal robocalls around the world and coordinating with federal and state enforcement agencies to bring criminals to justice. We’ve already shut down scams preying on vulnerable consumers during the pandemic. As the FCC’s registered traceback consortium, we intend to continue our laser-like scrutiny not just on robocall scammers, but the under the radar providers who let junk calls onto the network in the first place. We’re tracing back more calls every single day and ready to expand this work for consumers.” Nov. 15 is the deadline for voice service providers and ITG to update the FCC Enforcement Bureau on industry efforts July 27-Oct. 31 to trace the source of suspected unlawful robocalls, the bureau said in a public notice. The bureau's data collection is part of a Traced Act requirement the FCC annually submit a report to Congress on the status of such private-led efforts, it said.