“Hard learnings” from the COVID-19 pandemic “reinforced” Vroom’s belief that “we are well on our way to building a business that can be a dominant digital car retailer in the coming years,” said CEO Paul Hennessy on a Q2 investor call Wednesday. The company runs an e-commerce platform for buying and selling used vehicles. Vroom is seeing a “fairly profound shift” in buying preferences toward lower price points during the rebound, said Hennessy. Its e-commerce tools “were able to discern the shift in real time,” he said. On the risk of Vroom’s $599 shipping fee becoming a sales inhibitor as average vehicle selling prices decline, “we have not yet seen that as a conversion negative,” said Hennessy. As Vroom works to build inventory in “remote locations,” a “geo-based” fee structure would make sense, he said. The stock closed 18.3% lower Thursday at $56.37.
The FCC and FTC have had "a notable decrease" in robocall complaints in recent months, maybe due to the agencies' work over the spring with DOJ and USTelecom's Industry Traceback Group on COVID-19 robocall scams originating overseas, FCC Chairman Ajit Pai wrote Sens. Maggie Hassan, D-N.H., and Tom Carper, D-Del., in letters dated Aug. 6 and released Thursday. Pai said FTC complaints in April were down 68% from April 2019 numbers, and May numbers were down 60% year over year. He said the FCC Consumer and Governmental Affairs Bureau received 7,600 unwanted call complaints in April 2020 and 9,000 in May 2020, compared with 37,800 over the first three months of the year. He acknowledged it's often difficult to tell if the consumers are receiving specifically COVID-19 pandemic-related scam calls. The letters were in response to the senators urging a crackdown on COVID-19 robocall scams (see 2006260067).
House Commerce Committee Chairman Frank Pallone of New Jersey and 14 other committee Democrats urged the FCC Thursday to “provide unlimited voice minutes and unlimited mobile data to Lifeline recipients for the duration” of the COVID-19 pandemic, and increase “the basic support amount to cover the incidental costs of such increased benefit.” Talks between Congress and President Donald Trump’s administration on a compromise for the next pandemic aid bill appeared Thursday to be on pause until after Labor Day, as Senate leaders scheduled their next votes for Sept. 8. The House is already on recess and isn’t expected to return until Sept. 14. “We will have our regular pro forma meetings” and if Hill Democratic leaders “decide to finally let another package move forward … it would take bipartisan consent to meet for legislative business sooner than scheduled,” Senate Majority Leader Mitch McConnell, R-Ky., told reporters. Senate Republicans’ proposal last month for the next aid measure contained few telecom and tech provisions (see 2007280059). House Democrats had more tech and telecom language in their Health and Economic Recovery Omnibus Emergency Solutions Act (HR-6800), including broadband funding (see 2005130059). The FCC “has taken some small steps since March to tweak the Lifeline program’s rules, much bolder action is necessary,” House Commerce Democrats said in their letter to FCC Chairman Ajit Pai. “Regrettably, the Senate has yet to consider any meaningful action to assist low-income consumers in affording broadband during this pandemic,” so it’s “all the more critical that the FCC use all of its authorities to ensure that the American people have access to internet services at an affordable cost.” The lawmakers also faulted Pai’s draft order to reduce a Dec. 1 increase of Lifeline’s minimum service standard for mobile broadband (see 2007300064). The proposal appears “to ignore the fact that coronavirus cases continue to rise, and the country has experienced nineteen consecutive weeks of over one million unemployment claims,” the Democrats said. Other signers included House Commerce Vice Chair Yvette Clarke, D-N.Y., Communications Subcommittee Chairman Mike Doyle, D-Pa., and subpanel Vice Chair Doris Matsui, D-Calif. Pai “for months has made clear that Congress needs to step up to the plate and make more funding available for connectivity during” the epidemic, a spokesperson emailed. “It’s therefore disappointing that House Democrats have failed to do their job and are refusing to find common ground with the Administration and congressional Republicans on broadband funding and other core national priorities unless they get their demand for special-interest giveaways that have nothing to do with the pandemic, like tax cuts for the rich in states like New York, New Jersey, and California.”
In Webex, Cisco has “the most trusted secure platform for remote collaboration for the enterprise,” said CEO Chuck Robbins on a fiscal Q4 investor call Wednesday. Webex had double-digit growth in the quarter, “as businesses, governments, educators and front-line workers everywhere have embraced remote work,” he said. “We expect this momentum to continue, as we have begun to see the conversion of free trials into paid subscriptions.” Many Cisco customers are delaying their purchasing decisions in certain areas, “while increasing spend in others until they have greater visibility and clarity on the timing and shape of the global economic recovery,” said Robbins. The COVID-19 pandemic has “triggered a massive and rapid shift to remote operations and automation to maximize personal safety.” The stock closed 11.2% lower Thursday at $42.72.
CTA’s Tech Tracker survey found 17% of U.S. homes canvassed Aug. 7-9 bought laptops that week, “as many families prepare to go back to school remotely,” said the association Thursday. That’s the highest percentage of laptop purchases recorded since CTA launched the biweekly tech-use survey at the beginning of the COVID-19 pandemic in March, it said. “For many, going back to school in person isn’t an option,” said CTA Director-Research Lesley Rohrbaugh. The “collaboration” that technology enables “will be crucial for remote learning and social connection,” she said. High demand for telework and remote-learning connectivity tools sent Q2 laptop and tablet imports soaring by triple digits from Q1 (see 2008090002).
The return of live sports may temporarily reduce pressure on the cord-cutting cycle of fewer subscribers resulting in higher prices, but another wave of cord cutting "more damaging than the first," may be coming, MoffettNathanson's Craig Moffett wrote investors Wednesday. As people leave traditional pay TV for direct-to-consumer alternatives, the best content follows them, thus helping accelerate cord cutting, he said. The current rate of cord-cutting is 7.7%-8.3% a year, up from 5.4% last year, meaning the traditional pay-TV bushiness could disappear in 12 years, he said. Cord cutting is exploding, but some dropping of cable subscriptions may only be temporary due to the pandemic, CCG Consulting President Doug Dawson blogged Wednesday. Sports "will eventually come back to TV," and sports fans will re-up their subscriptions, he said. As the economy picks up, people also will find it easier to justify the monthly cable subscription, he said. The pandemic's shutdown of creation of new programming content also is hurting subscriptions for now, he said.
“Sell-in” demand in the computing segment at Alpha & Omega Semiconductor (AOS) was “OK” for fiscal Q4 ended June 30, said Executive Vice President Stephen Chang on a Tuesday investor call. But the increased PC sell-through was “quite dramatic,” due to widespread COVID-19 work-from-home and remote-learning, he said. AOS supplies power semiconductors for laptops, LCD TVs, smartphones and other applications and can be a bellwether of consumer tech demand. Many AOS customers that paused production in calendar Q1 through the pandemic’s factory lockdowns “were catching up in the June quarter,” said Chang. “End demand” in computing remained strong through the quarter, “and we were able to meet it with ramping supply” from the fab in Chongqing, China, he said. Revenue in the consumer segment increased 37.5% sequentially and 31.7% year over year, said Chang. “COVID-driven home-sheltering boosted sales of gaming, TVs and home appliances, enabling those segments to achieve healthy growth,” he said. AOS expects double-digit growth in its consumer segment for the September quarter, “driven by home entertainment, gaming and TVs,” said Chang. COVID-19 robbed 2020 of much of its “normal seasonality,” said Chang. Work-from-home and remote-learning mandates are putting the computing segment on a “very healthy” track for the September quarter, said Chang. “We really need to wait and see how demand changes, but right now, it still looks strong.” Smartphone OEMs didn't “pull back production until the June quarter,” said Chang. “But then coming into the September quarter, they're actually starting up production pretty heavily again in anticipation of possibly another factory shutdown” for the next wave of COVID-19 cases in the fall, he said. The stock closed 21.4% higher Wednesday at $13.88.
The DOJ announced actions Wednesday shutting more than 300 websites “purporting to sell scarce health and safety items.” The department secured restraining orders in federal court against three residents of Vietnam: Thu Phan Dinh, Tran Khanh and Nguyen Duy Toan, who “are alleged to have engaged in a wire fraud scheme seeking to profit from the COVID-19 pandemic.”
Local advertising spending in 2020 likely will be about $140.4 billion instead of the previously forecast $143.3 billion due to the COVID-19 pandemic's economic fallout, BIA Advisory Services said Wednesday. That would be a 6.1% decline from 2019 spending, it said. Broadcast TV and radio advertising projections of $27.9 billion are down $500 million from its previous forecast, it said, while mobile advertising will likely total $24.3 billion, also a $500 million decline, and its online/interactive advertising projection is down $300 million to $20.6 billion, it said.
Pixelworks hopes to save $3.2 million annually through a restructuring that includes a 14% head-count reduction, said the tech company Monday. Q2 revenue declined 48.3% from a year earlier, despite a 24% increase in mobile revenue from higher shipments of Iris-brand visual processors to six smartphone OEMs. “Our second quarter results reflected the anticipated headwinds associated with the broad impact from the COVID-19 pandemic on our target end markets,” said CEO Todd DeBonis on a quarterly call Monday. The stock plunged 25.6% Tuesday to close at $2.54. Pixelworks began seeing the “green shoots of the recovery in mobile demand in the current quarter,” he said. “We continue to believe there will be a high correlation between OEMs’ adoption of 5G technology and high-performance displays and smartphones, as video remains the most single compelling use case for 5G with consumers.” The smartphone industry is “still in the early innings” of the 5G transition, said DeBonis. “We are seeing a more rapid introduction of high-frame-rate displays into mid-tier phones than we previously anticipated, which is positive and increases the Pixelworks value proposition in mid-tier devices.”