This week is where economics and tech meet, a week where there are a host of earnings reports for tech companies who are either bellwethers for the market or who are of special interest at the moment because of recent earnings trends. Our fall survey data is far from complete at this point so we have only a sense of what’s happened, but it suggests that there is neither a rising tide lifting all boats nor a market collapse. Instead, some companies are likely to surprise to the upside, and others unpleasantly.
Apple is a company everyone will be watching because of the loss of Steve Jobs and the semi-disappointing 4S launch, but of course neither will be reflected in the quarter’s results. Instead they would likely color guidance, which is what the Street will be looking for. Unit trends on both the iPhone and iPad will be looked at to see how much the new iPhone overhung the older models and what, if any, changes in momentum the iPad is experiencing. The Kindle Fire was, in our view, too late to be reflected much in the numbers, so don’t expect to see much in the way of indicators of how it will impact iPads in the long term.
IBM is another company whose results are always important; it’s the single most relevant tech stock, and any strength or weakness it shows becomes the effective baseline against which other companies will be measured. What I’m looking at in IBM’s tea leaves is their WebSphere stuff, their SOA/cloud middleware platform. I think that there are some early signs that enterprises are seeing the cloud much MUCH more in SOA terms as they evolve their cloud projects and get a range on the cost/benefits. If that’s the case, we can expect other players in the cloud space (including Amazon) to start thinking more platform and less IaaS.
Intel’s numbers will be a measure of how the PC versus tablets versus smartphones might fare during the holiday period, because most vendors will have stockpiled critical components like the CPU for fall and holiday manufacturing. We know that PCs lagged their seasonal values, suggesting that buyers either substituted tablets or deferred purchasing until the holiday season. We won’t get a convincing indicator of which it was here from Intel because they don’t have a strong tablet presence, but we should see whether retailers placed any bets on the PC space.
Microsoft will offer another read of the PC space in its report, and also perhaps offer a view of how the company’s overall business and online services spaces are doing. Microsoft has arguably a lead in the PaaS cloud, but the company hasn’t exploited it as well as I think it could have. We may get a sense of how Phone 7 is doing, but again I suspect it’s a bit too early for anything definitive. Microsoft’s guidance will surely set the tone for PCs in the holiday period, though.
AT&T and Verizon report only a day apart this week, and everyone will be watching for their mobile and TV numbers as well as their loss of legacy lines. There is definitely a trend toward dropping wireline voice in favor of something, or a combination of things, not only for cost but for convenience. Most of the young-adult market, the critical 22-35 age group, are now using wireless phones exclusively. Many older users would like to but are stuck with two numbers that a host of friends remember or are afraid of 911 issues. A major line loss would show that there’s a risk that the operators will lose voice revenues faster than something else can tick up, but I doubt that’s going to be happening because of this inertia.
Juniper’s numbers this week will be perhaps an indicator of the health of more traditional network spending, and also an indicator of the company’s own health. Juniper’s carrier numbers are a pretty good reflection of the attitude of operators in investing in “capacity” versus “service” since Juniper offers little in the way of service-building tools. In our spring survey, the company lost significant strategic credibility in the IP layer, its core competence. I’m going to be looking to see if any of that loss is reflected in the numbers this quarter.
