Ciena Corp vs Cisco Systems

 VERSUS 

Earnings per share (EPS) for Ciena Corp (CIEN) is currently negative and forecast to move towards the positive side starting next year after a 5 years drop in the net income. Cisco Systems (CSCO) however maintained a good EPS with it being increasing year after year but forecast to lower in 2014 (not much). Forecast would forever be forecast and many things can happen within a year especially on how fast technology moved in a year. Few years ago we were talking about mobile devices and today it all became so common that nobody cares about these powerful devices anymore.

Projected EPS for CIEN next year is only +0.05 a forecast that is so near towards the negative area? That is just not what I want to see. Furthermore, investing with Cisco would let us gain some dividends not much but compared to Ciena which gave none and potentially dividends coming in only a few years later is just not what I am looking for at the moment because I also see that the rally this year might cool off before mid of next year.

I still think even Cisco stands out far from Ciena, both would not be a good bet with the current shift in technology. If Apple is capable of producing programs such as Facetime on their devices, these operating system giants putting more on network communication research for our daily device could lower the market share of companies like Cisco. Nevertheless, Cisco still have a division on providing servers which is currently booming which then leads to cloud computing.

I believe the future is now held by the big software makers Microsoft or Apple or even the upcoming Google with their own computer operating system. I am sure network communication capabilities targeting businesses would be somewhere on top of their priority. Cisco or Ciena are not like companies such as Autodesk where they have real custom software for designing. But the market for communication and people to obtain easy/cheaper communication capabilities has expanded due to the processing power of our mobile devices now. Cisco and Ciena have to move themselves forward changing the way they integrate communications into cloud.

Strong On Intel Corp

Following up on my recent strong buy point on Intel Corp (INTC). Thanks to these 2 articles that strengthen my view point and proof to be a good buy on INTC for the future.

http://seekingalpha.com/article/1914721-intel-moving-ahead-with-the-right-strategy?source=yahoo

The link above in on how Intel has positioned themselves towards gaining share on the 'Big Data' industry such as companies like Teradata Corp (TDC). Many thanks to Vivek Gupta for making me realize there are still more to come for the Big Data industry other than what Intel has already offered.

http://www.fool.com/investing/general/2013/12/25/who-are-intels-two-major-phone-customers.aspx#.Ur0GCPQW2Z8

This link is is an article of what I've already expect to see more of Intel's involvement in making chips for the mobile devices market.

Thanks

Foxconn and BlackBerry Teaming Up ?

Last week shares of BlackBerry Ltd (BBRY) jumped from a low $6 to nearing the $8 in just a couple of day and the reason to that has many people looking into the joint venture with Foxconn a benefit towards the phone maker itself but I'll have to disagree on that. In fact it seems to be the reverse where Foxconn would benefit more towards this joint  venture.

I think we all know that device sales of BlackBerry dropped pretty bad with the introduction of touch screen capabilities for other devices. With that BlackBerry has been losing lots of its market share over the years until they finally brought in the BlackBerry Z10 with a full capacitive touch screen technology that replace their old fashioned full QWERTY keyboard on device thingy. When that model came out, the company shares plunged further knowing that the demand for their new devices are low. Problems after problems and now Foxconn wants part of it and everyone is jumping in. Seriously?

BlackBerry Z10

They only thing I can think of that would benefit Foxconn is that they are trying to build the processors for future BlackBerry phones just to be competitive in the mobile devices industry. At this particular period of time, the joint venture with BlackBerry seems to be a good move because the company value is relatively cheap compared to other phone makers. The technique that Foxconn implemented was somewhat similar to the buying of Nokia by Microsoft Corp (MSFT) where Microsoft realized that Nokia is relatively cheap and owns a full scale production facility and well as research making it ready to run. Similar to Microsoft that wanted to build its mobile OS market share by teaming up with Nokia, Foxconn wanted to build its mobile devices microprocessor market share by teaming up with BlackBerry. Both Nokia and BlackBerry were just very good and capable companies but was put off course with slow development on their side. I believe the future of mobile devices to be fairly equal with all makers getting a good amount of market share but don't really think that BlackBerry is up for it.

In the near future we might possibly see something like

Nokia = Windows Phone, Intel Microprocessors
BlackBerry = BlackBerry 10, Foxconn
Apple iPhone X = iOS, A7 chip
Samsung = Google Android, Qualcomm

In conclusion, I still believe that BlackBerry isn't worth investing for the long term seems growth have been declining over the years. Earnings Per Share (EPS) has been declining over the  years forecast to be much less in the next 5 years with sales revenue forecast to drop as well. Every stock facts about this share are just bad and contains a lot of negativity. So are we really expecting that this company might not just go bust? Maybe Foxconn would bail them out I don't know... Just too many uncertainties for BBRY at the moment.
The current jump of $2 would just not show much towards the long term.

Amazon Phone?

No Longer Just A Shop

I really wanted to write something on cloud computing because to be honest, it has really build the path the the future of computing. So what does it got to do with Amazon (AMZN) Phone or does it even exist? I'm definitely not talking rubbish or intoxicated and leave my wordings roll to my imagination but something just struck me from reading this article into thinking Amazon really has the capabilities of building a phone.

visit http://seekingalpha.com/article/1913051-aws-and-the-amazon-phone-the-next-big-thing?source=google_news

Reading from this article, it has totally changed the way I see cloud computing to be. Remember cloud computing jargon IaaS, SaaS, DaaS, etc. It really doesn't mean a thing when regular folks like you and me read it. Well definitely not for me as I am no tech expert but with the correct education towards what these cloud computing capabilities can do, it really cautioned investors like me into thinking outside the box.

The article above suggested that Amazon might create phones that are logged on to Amazon Web Services (AWS) and the phone would use the processing capabilities of the AWS and sends back information of the phone on the the device. The device can be designed as a ultra futuristic glass that doesn't require the conventional equipment where we have a processor in it. Definitely a good way to exploit the power of cloud computing.

Something like that might just be interesting !

Amazon has begun pricing and selling their WorkSpaces cloud computing software and further developments would let us see a Sci-Fi mobile phone in the future.

Follow Up On 3D Printing Technologies

Follow up on 3D printer technologies as well as the respective companies who produces them.

http://blogs.barrons.com/techtraderdaily/2013/12/23/stratasys-rising-gabelli-ups-to-buy-on-higher-multiple-on-nylon-high-margin-materials/?mod=BOL_da_rta

Some of these counters are changed from BUY from HOLD and that makes me wonder if all this bubble is going to explode in the near future. Indeed all these companies are trading at a relatively expensive price according to P/E ratio. Stratasys (SSYS) has high P/E ratio assuming it means anything of 222 and 3D Systems (DDD) has a P/E of 63. Truly it builds up my confidence into believing what Jim Cramer said earlier on all these being a bubble due to overly price stocks.

The Coming Up Of Intel Corp

Talking about the Microsoft Surface Pro 2 the other day focuses me towards their supplier of microprocessor Intel Corp (INTC). Intel is known to be the largest chipmaker in the world with Advanced Micro Devices (AMD) following closely behind. The problem with Intel in the last couple of years is the shifting of technology towards mobile devices which makes them a weaker company for investors to look at due to their inability to come up with a chip for mobile processors such companies like ARM Holdings (ARMH) or Qualcomm (QCOM). Both Intel and Microsoft faced similar problems as being laggers in the mobility market but both indeed both still remains strong for the market share of desktop/laptop computers. But with the introduction of the 22nm microprocessors by Intel, the results are very convincing pairing it with tablet and smartphones.

The 22nm is one the most efficient microprocessors in terms of processing power, energy efficiency and known to produce better graphics. With all of that in mind, a tablet would not have to sacrifice processing power for a prolonged battery life and having a better performance in graphic acceleration just moved it one step further into competing with regular laptop computers running custom graphic cards.

Seemingly all this are just good news for Intel and bad news for its competitors when the largest chipmaker in the world is once again competitive at what it does best in the industry. Well, a little bit of economies of scale comes in when they can provide good R&D and quality products all for a cheaper price. I foresee a higher growth for Intel in the next couple of years especially with the boom in mobile devices. Many more electronic device makers such as Samsung, Sony or even Chinese mobile giants could incorporating Intel's latest chipset into their devices. To start with that we saw Lenovo using the Intel chip with their devices already earlier this year.

Intel Inside

With the roll out of the the market for their products, this has placed Intel once again on the undervalued list of stocks. As soon as the "Intel Inside" logo starts to crawl into the covers of new devices, Intel shares would definitely crawl towards new highs in the future.

Microsoft & The New Device

Microsoft Surface Pro 2

Could Microsoft Surface Pro 2 be the game changer?

Recently the Microsoft Surface 2 and the Surface Pro 2 reported to be sold out everywhere including the Microsoft online store partly due to the holiday season as well. But to be honest, I still don’t see Microsoft obtaining a larger market share on their new gadget. The tag line for Microsoft on the new Surface Pro 2 has been all about “not reinventing the wheel but making it better.” It seems to me that Microsoft has been right about it but has it really developed an item that users want around the world?

Comparing the Surface Pro 2 to the latest Apple iPad Air as well as the Samsung Galaxy Tab 3 10.1 where all three devices have almost similar specifications but differ on the most important thing which is operating system. As a consumer, pricing is always the main highlight to me as I am no fan to any product or operating system. The product that gives me the best value also offering the lowest price would be my main concern and let's take a look on the prices for these three products.

1. Microsoft Surface Pro 2 - $749.29 on Amazon.com

1. Samsung Galaxy Tab 3 16GB (10.1) - $317.99 on Amazon.com

1. Apple iPad Air 16G Wi-Fi only - $499 on the Apple Online Store

2013 Market Share In Terms of Mobile Operating Systems

I know by comparing the Microsoft Surface Pro 2 against the other two 'hot' tablets would not be fair due to the 128GB capacity as well as having a 4 GB RAM but it is still the best two competitors to put up against the Surface Pro 2. Think of it in a way that people who really buy the new Surface Pro 2 are there to exploit the power of the device as well as another option other than using the Android tablets. So the idea of it being a laptop/tablet would not naturally come in to the mind of the public moreover the extra price you have to pay to get a keyboard that attaches to it. My choice would be to get a cheaper tablet or a smartphone with a bigger screen particularly those are with Android and a laptop for my daily workload. With that in mind, I would have to conclude that the Surface Pro 2 by Microsoft would not a game changer towards the tablet market. Maybe a couple of percentage gain on market share and that just all.

Since Microsoft has been slow over the last couple of years as well as the announcement of CEO Steve Ballmer to step down has elevated their shares prices. I can see that investors are waiting for the correct moment into buying in MSFT. Why so? Giving it a new head would definitely propel the company to a different direction due to the fact that they were quite slow into entering the mobile devices operating system market. Investors are keen into seeing a new leader that comes in and reshuffles the company pointing them to higher growth where the company is capable of.

Currently the share prices have increased in-line with the S&P500 hitting around 40% return in 2 years with NASDAQ doing 60% gains and that’s about it. Microsoft has always and I believe forever to be the market leader on desktop/laptop operating systems. The company currently heading forward with their growth in the development of new operating system alike the Windows 8 and receiving renewable source of revenue with upgrading the version of the Windows OS.  In that sense, we can see a good return on equity with a 10 year normalized Return On Equity (ROE) to be 17.9%. That is really the core structure of this company and to penetrate the mobility market? It would take some time...

The price of the new device is definitely a big factor towards the amount of people buying it seems to be logical with the theory of supply and demand. But with time, more and more devices would be produced that minimizes the fixed cost and we might just see a decline in price for Windows based mobile devices. With that in mind, the market share of Windows 8 users for tablets increases would derive to production companies adapting the Windows to their machines as their default operating system due to popularity.

Would Microsoft be a good buy or not? My opinion on that point towards the process of developing our portfolio. Sudden surge of 100%  in returns seems unlikely like the ones we had on Apple (AAPL) but to me MSFT has all been about constant growth. I might just buy a little from time to time searching for a good price on technical analysis basis and wait the wave when their share of mobility devices increases kicking in the factor for more people to jump in. Keep MSFT in view for the near future as when the problem sorts itself out with a new leader and of course more products that could send the share prices flying.

3D Printing Could Just Be The Future

3D printing of a city - Photo from pcpro.co.uk

With the recent craze on 3D printing technology and also shares of companies such as Stratasys Ltd. (SSYS) soaring high from $20 to $120 in just a couple of months it can't be overlooked as if it this is just an ordinary machine. This 3D printing unit build in a sense that it functions similar to a regular printer but of course output isn't just a piece of paper but it could be anything from rubber to plastics or even metals.

I believe that we can see a bright future in the 3D printing technology especially when 3D Systems (DDD), another high flying stock that is on a rally just bought some of Xerox Corp (XRX) engineering division. Possibly they have envisioned to market and produce office based 3D printers on a larger scale. A 3D printer might just be one of the essential machine for any R&D departments to own similar to owning a copying machine or printer. Even Hewlett-Packard (HPQ) also announced that they would enter the market for 3D printers next year which I believe is famous for developing household computing products. Opening the market for household 3D printers would be a leap ahead for any company as 3D printing seems revolutionary similar to what the iPhone does to the mobile devices market. These are just preliminary thought but as time goes by, the ability to produce home-based 3D printers could just come through with mass production and also the development for cheaper materials would prove to give a huge advantage in the coming years lowering cost. Seeing that it might just follow the path of the deskjek and laserjet printers that we have today. These products started at a hefty price before it became common and also industries started to replicate the technology and the pricing war between brands begins.

Pondering far ahead on 3D printers arriving to our homes, it might just cause many businesses to change their strategy or even the whole business nature of the company. Remember Blockbuster (BLOAQ)? It was crushed with the movement of technology in improvement to the internet services. The high speed internet or fibre optic changed the way movies are distributed to households making rentals obsolete. Similar condition might faced a famous name "Toys R Us". The minute kids get their hands on a 3D printer, they could produce anything that comes into their imagination and my guess would be toys. Ability of producing something to play with by learning Computer Aided Design (CAD) or simply download blueprints for an action figure off web somewhat gives me a personalized feel increasing the awesomeness factor. This might just cut off the link between toy stores and consumers as toy makers would be selling the blueprints off the net. Adults would enjoy this as I believe that plastic guns had been produced and the results came upon products which are so realistic causing tension over at the airport security. Even the famous IKEA store could be selling blueprints to their products too who knows?

Endless boundaries to what 3D printers can do and the idea is to really market it out to the general public. Marketing is everything in getting products to consumers. As I recalled many years ago the Microsoft Surface existed before the iPhone with capacitive touch screen function but it is Apple who chose to implement it on a phone and market to public a revolutionizing product that change the world towards personal computing especially with more powerful tablets which are one their way.

It all boils down to where we should put our money. Jim Cramer proposed that 3-D printer producing companies are in a bubble which I really have to agree given the fact that it raised too fast with minimal development on the product and also small amount of sales on these printers. But to where I'm putting my money, it has to be a company that has the interest in mass producing them. In conclusion, take conservative action on where to invest on this technology. Whether this is good or bust, I am no one and could not determine how the future looks like but I truly believe in seeing this technology developing further and coming into our homes.