Daily Tech Snippet: Thursday, July 23

• Archived snippets are here, and MP3 versions are here

• Qualcomm Reports Lower Earnings and Says It Will Cut Jobs: Qualcomm had one of the best playbooks in tech, but it looks like the game is changing. The semiconductor designer and maker helped develop much of the technology used in mobile communications, particularly in smartphones. Qualcomm was a pioneer in the radio technology that makes it possible to send enormous amounts of data over wireless networks without clogging them. Virtually every maker of phones and wireless infrastructure needs to draw off Qualcomm’s intellectual property, which the company leases. The knowledge and profits Qualcomm earned from that business gave it both capital and a head start in building chips for phones, first in advanced third-generation, or 3G, digital networks, then in the succeeding 4G systems.With a market capitalization of $100 billion, over the last 15 years it became the world’s third-largest chip company in terms of revenue. Little of that was on display Wednesday, when Qualcomm reported lower earnings, and, under pressure from Wall Street, announced it would cut about 15 percent of its staff, or somewhere between 4,500 and 5,000 people. Spending will be reduced by $1.4 billion, the company said, including $300 million in shares that Qualcomm has been giving to its top executives and employees. Three new board members, approved by Jana Partners, a Wall Street investment firm that had been pressing for changes, will be put on Qualcomm’s 15-member board. Qualcomm said its third fiscal quarter’s net income was $1.2 billion, down 47 percent from a year earlier. Net income was 73 cents a share, down from $1.31 a share. Revenue fell 14 percent, to $5.8 billion, from $6.8 billion last year. The numbers were slightly higher than analysts had expected. The price of Qualcomm shares was down about 1.8 percent in after-hours trading.


• Amazon is expanding its on-demand home services business -- "Amazon Home Services" -- to 15 new cities: Amazon announced Wednesday that it's expanding its on-demand home services business -- transparently named "Amazon Home Services" -- to 15 new cities. The program was already operating in New York, San Francisco, Seattle and Los Angeles, offering users an easy way to book plumbers, electricians, cleaners and other people who can handle the things you may need around the house. The company announced that it is also expanding the service to let people request help with custom jobs, rather than just the pre-packaged services previously offered. The competition in the on-demand space for home tasks is heating up. Companies such as TaskRabbit jumped in early to the "gig" economy -- in fact, it integrates with Home Services -- and now a host other of cleaning, laundry and other service companies such as Handy, Thumbtack and others have found success providing on-demand workers to take care of your home needs. Amazon says its Home Services "pros," as the service calls them, are vetted and required to keep all appropriate licenses to continue working with the service. Some use Amazon to expand their own businesses. Google is also thought to be jumping into the space. The company recently hired the technical team from Homejoy, a home-cleaning startup that shut down in part because it faced a lawsuit for classifying its workers as contractors rather than employees, Recode reported. The report suggested that Google may try and bake some sort of services link into its search results -- a sort of instant referral from the search page.


• Intel Issues $7 Billion in Bonds to Help Fund Takeover of Altera: Intel tapped the bond market for $7 billion to finance part of its $16.7 billion takeover of Altera Corp. at lower rates than initially offered to investors. The world’s biggest chipmaker sold the longest portion of the four-part deal, $2 billion of 30-year, 4.9 percent securities, to yield 1.85 percentage points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The spread tightened as the day went on, according to a person with knowledge of the matter. Similar-maturity debt was traded at a 1.8 percentage point spread in the secondary market on Tuesday, Bloomberg data show. Intel may have offered generous terms to appease investors dealing with a turbulent market, CreditSights analysts led by Erin Lyons wrote in a research note Wednesday, as a disappointing earnings forecast from Apple sent technology stocks tumbling. Speculation that Intel peer Qualcomm would split may have also “soured investors’ opinions of highly rated tech companies,” they wrote.


• Amazon’s Latest Prime Perk: A Five Percent Cash-Back Credit Card: Amazon continues to make a concerted effort to add new perks to Amazon Prime as it tries to funnel new shoppers into the membership program that turns casual shoppers into Amazon addicts. Here’s another Prime benefit that many people might not know about: Access to an Amazon credit card that pays back 5 percent on every Amazon.com order. Amazon quietly introduced the card, the Amazon Prime Store Card, in March and has been slowly rolling out marketing for it on Amazon.com since then. But the company hasn’t done any PR around it, which is why I first learned of the Prime card by seeing a message on the site last week. The card has no annual fee and allows Prime members to get 5 percent back in the form of a statement credit on all Amazon.com orders — not just Prime purchases — that they place with the card. The card also comes with some promotional financing options, but you should read the fine print yourself because credit card application fine print ain’t nothing to mess with. The card is obviously great for Amazon if it attracts new shoppers to the Prime program, which costs $99 a year and comes with two-day shipping and media streaming, or helps retain current ones. But it’s also important because Amazon will likely be paying lower transaction fees on purchases made with Prime cards compared to purchases made with mainstream credit cards. That’s because store-branded cards typically carry low processing fees when they aren’t associated with Visa, MasterCard or American Express’ networks. As a result, expect Amazon to try its best to get cardholders to make the Prime Store Card the default payment option.


• Tata Communications plans to sell data centre business: Tata Communications plans to sell a 74% stake in its subsidiary Tata Communications Data Centre Pvt Ltd, reports indicate. Talks with some private equity and strategic investors have begun, and the deal size would likely be around $300 million and help Tata Communications reduce debt on its books. According to Tata Communications’ 2014 annual report, the data centre subsidiary is profitable, and returned a net profit of Rs. 23 crore for 2013-14 on a revenue of Rs. 375 crore. The company is yet to announce its numbers for 2014-15. “In the long run, unless the company is able to raise equity funding, its ability to raise additional debt funding may be restricted. This, in turn, could adversely affect the capital expenditure programme in the long run,” the annual report said. Tata Communications Data Centre has facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Pune and some tier-II, and tier-III towns. The company also provides data centre services in the US, the UK and Singapore. It owns over 1 million sq. ft of data centre and co-location space across 44 global locations and also has eight partner sites in Australia, Malaysia, Germany and the Netherlands, according to the company’s website. In 2013-14, the Tata Communications had a 28% market share of the Indian data market and a 25% market share of the Indian data centre market, according to the company’s annual report. Several global and Indian firms are in the process of setting up data centres in India.