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Qualcomm rallies on signs smartphone market slump is easing

The company was set to increase its market value by nearly $7 billion

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Qualcomm rallies on signs smartphone market slump is easing

Qualcomm (QCOM.O) rose nearly 6% on Thursday as its strong first-quarter forecasts signaled that the two-year-long slump in the smartphone market was easing, led by a recovery in China.

The company, among the largest designers of chips used in smartphones, was set to increase its market value by nearly $7 billion based on its $117.09 premarket share price.

After four quarters of decline in its mainstay smartphone business, Qualcomm is starting to see an end to the inventory pile-up in the Android business, with fresh orders coming in for its chips.

Its revenue and profit projections for the last three months of the year were both above Wall Street estimates, with the company predicting a 35% quarter-on-quarter rise in sales to Chinese smartphone customers.

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“While management … still anticipate a less-than-normal seasonal uptick in December quarter, the guidance was better than anticipated with signs of inventory improving ahead of last quarter’s expectations,” Canaccord Genuity analysts said.

The company also allayed concerns about competition from Huawei (HWT.UL) and Samsung (005930.KS), both of which are now producing and using their own chips in devices after having relied on the U.S. company for the past several years.

CEO Cristiano Amon said Qualcomm expects to retain a “majority share” of the chips in Samsung’s forthcoming S24 line of phones and does not expect Huawei’s re-entry into the market to affect its relationship with Chinese smartphone companies.

“While some narrative headwinds (the use of in-house chips at Huawei and Samsung) still exist, we may find the market recovery/normalization off that trough may offset those eventualities,” said Stacy Rasgon, analyst at Bernstein.

At least nine analysts lifted their ratings on Qualcomm’s stock with an average rating of “buy”, according to LSEG data. But the company also saw nine price target cuts on lingering fears about when the smartphone slump will actually end, pushing Wall Street’s median view to $139.50.

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The company’s shares are little changed this year. They trade at nearly 12 times their 12-month forward earnings estimates, compared with investor darling Nvidia’s 27.2. 

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Don’t worry if your Android gets stolen, new Theft Detection Lock comes to rescue

Don’t worry if your Android gets stolen, new Theft Detection Lock comes to rescue

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Don't worry if your Android gets stolen, new Theft Detection Lock comes to rescue

Google revealed plans to introduce a ground-breaking security feature for Android devices: Theft Detection Lock at the Google I/O 2024 developer conference held on Wednesday.

This innovative addition is specifically designed to combat the rising threat of smartphone theft by automatically locking the device when suspicious activity is detected.

Powered by artificial intelligence, Theft Detection Lock utilizes advanced algorithms to identify common motions associated with theft.

For instance, if a device suddenly begins moving rapidly in the opposite direction, indicative of a potential theft scenario, the feature swiftly triggers a screen lock mechanism.

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This proactive measure aims to thwart thieves from easily accessing sensitive user data stored on the device.

In addition to Theft Detection Lock, Google also announced the introduction of an Offline Device Lock feature. This functionality serves as a safeguard against intentional disconnection from the network, a common tactic employed by thieves to bypass security measures.

Instances such as repeated failed authentication attempts will prompt the Offline Device Lock, providing an added layer of protection for users’ devices.

Google revealed plans to enhance device security with measures aimed at preventing remote factory resets initiated by thieves.

Under the forthcoming update, if a thief attempts to reset a stolen device, they will be unable to set it up again without the necessary device or Google account credentials. This strategic move renders stolen devices essentially unsellable, significantly diminishing the incentives for phone theft.

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Tesla must face vehicle owners’ lawsuit over self-driving claims

Tesla must face vehicle owners’ lawsuit over self-driving claims

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Tesla must face vehicle owners' lawsuit over self-driving claims

A U.S. judge on Wednesday rejected Tesla’s bid to dismiss a lawsuit accusing Elon Musk’s electric car company of misleading owners into believing that their vehicles could soon have self-driving capabilities.

The proposed nationwide class action accused Tesla and Musk of having since 2016 falsely advertised Autopilot and other self-driving technology as functional or “just around the corner,” inducing drivers to pay more for their vehicles. 

U.S. District Judge Rita Lin in San Francisco said owners could pursue negligence and fraud-based claims, to the extent they relied on Tesla’s representations regarding vehicles’ hardware and ability to drive coast-to-coast across the U.S.

Without ruling on the merits, Lin said that “if Tesla meant to convey that its hardware was sufficient to reach high or full automation, the plainly alleges sufficient falsity.”

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The judge dismissed some other claims.

Tesla and its lawyers did not immediately respond to requests for comment. Lawyers for Tesla vehicle owners did not immediately respond to similar requests.

The case was led by Thomas LoSavio, a retired California lawyer who said he paid an $8,000 premium in 2017 for Full Self-Driving capabilities on a Tesla Model S, believing it would make driving safer if his reflexes deteriorated as he aged.

LoSavio said he was still waiting for the technology six years later, with Tesla remaining unable “even remotely” to produce a fully self-driving car.

The lawsuit seeks unspecified damages for people who since 2016 bought or leased Tesla vehicles with Autopilot, Enhanced Autopilot and Full Self-Driving features.

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Tesla has for many years faced federal probes into whether its self-driving technology might have contributed to fatal crashes.

Federal prosecutors are separately examining whether Tesla committed securities fraud or wire fraud by misleading investors about its vehicles’ self-driving capabilities, according to three people familiar with the matter.

Tesla has said Autopilot lets vehicles steer, accelerate and brake in their lanes, and Full Self-Driving lets vehicles obey traffic signals and change lanes.

But it had acknowledged that neither technology makes vehicles autonomous, or excuses drivers from paying attention to the roads.

The case is In re Tesla Advanced Driver Assistance Systems Litigation, U.S. District Court, Northern District of California, No. 22-05240.

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Microsoft asks hundreds of China staff to relocate

Microsoft asks hundreds of China staff to relocate

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Microsoft asks hundreds of China staff to relocate

Microsoft is asking about 700 to 800 people in its China-based cloud-computing and artificial-intelligence operations to consider transferring outside the country, the Wall Street Journal reported on Thursday.

The employees, mostly engineers with Chinese nationality, were earlier in the week offered an option to transfer to countries including the U.S., Ireland, Australia and New Zealand, the report said, citing people familiar with the matter.

The move comes amid spiralling US-China relations as the Biden administration cracks down on various sectors of Chinese imports, including electric vehicle (EV) batteries, computer chips and medical products.

A Microsoft spokesperson told the Journal that providing internal opportunities is part of its global business and confirmed the company had shared an optional internal transfer opportunity with a subset of employees. 

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Reuters reported earlier this month that the U.S. Commerce Department is considering a new regulatory push to restrict the export of proprietary or closed source AI models, whose software and the data it is trained on are kept under wraps.

The spokesperson, however, told the newspaper that the company remains committed to the region and will continue to operate in China.

Microsoft didn’t immediately respond to a Reuters request for comment.

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