“Record-level unemployment and continuing uncertainty" led consumers to cut discretionary spending 50%, said Parks Associates' David Drury Wednesday. Consumer tech purchases increased during the COVID-19 pandemic, he said. Some 26% of U.S. broadband households bought electronics, and demand is expected to continue into next year and possibly 2022, said the analyst. Strong demand will continue for residential broadband to enable streaming video services and messaging, video calling and virtual meetings, he said. About three-fourths of households subscribe to at least one streaming video service; half to two or more. Some 30% intend to avoid public events and large gatherings into 2021 over concern of exposure, said Drury. Seventy percent believe the economy will need a long time to recover; 23% believe the economy will rebound quickly once social-distancing measures are lifted. About 29% say they are delaying vacations or personal travel at least until next year.
Dolby fiscal Q3 revenue fell 18% from the 2019 quarter and 30% sequentially, with TVs, PCs and mobile products outperforming set-top boxes, said Chief Financial Officer Lewis Chew on a Monday call. The quarter ended June 26. Lower unit shipments, products and services sales and Dolby Cinema revenue were due to COVID-19, he said. Theaters are reopening more slowly than Dolby expected. Revenue guidance for Q4 is $225 million-$255 million compared with $299 million in Q4 last year. Most of the potential decline can be blamed on the “economic ripple effect of the pandemic,” plus lower royalty recoveries, Chew said. CEO Kevin Yeaman said there’s “still a lot of uncertainty,” and “in addition to lower consumer spending, the pandemic has resulted in some shifts in the timing of new customer wins and revenues.” Licensees remain “deeply engaged” with adding Dolby Vision and Dolby Atmos functionality, Yeaman said. Dolby Vision was installed on about 10% of 4K TV shipments in fiscal 2019, he said. The company expects to “materially increase that adoption rate” for fiscal 2020 “with a significant growth opportunity still ahead,” he said. Yeaman sees Dolby adoption accelerating on PCs and mobile devices and on gaming and music content. Colliers' Steven Frankel said Dolby has “navigated through the worst of the supply chain interruptions.” The analyst sees the potential for Dolby.IO, the company's developer platform effort, to move technologies from devices to applications, he wrote investors Tuesday.
Seventy percent of large businesses in Europe worry that remote-working policies due to COVID-19 are making them “more vulnerable” to cyberattacks, an AT&T study found. It canvassed 800 cybersecurity professionals, finding 55% believe work-from-home protocols leave them more susceptible. That jumps to 70% for large businesses. The experts identified employees as the source of the riskiest vulnerabilities. They reported 35% use the same device for work and play, and 24% “are sharing or storing sensitive information in unsanctioned cloud applications,” the telco said.
Massachusetts Institute of Technology open-source software overcomes videoconferencing limitations by supporting “impromptu conversations,” said its developers. Dubbed Minglr, the software was designed to create spontaneous, information interactions similar to hallway conversations that office workers say they miss in the COVID-19-inspired work-from-home environment. At a virtual meeting or conference, participants and attendees log on to Minglr and see a list of people available to talk. The system lets them select the ones they want to speak to, along with those who want to speak to them. If both parties consent, they enter a private video room where they can chat for as long as they wish, said MIT Sloan School of Management professor Thomas Malone Tuesday.
The 7th U.S. Circuit Court of Appeals will continue to do oral arguments via phone or video communication through Dec. 31 due to the pandemic, said Chief Judge Diane Sykes of Milwaukee Monday. The court "should continue to minimize in-person on-site staffing and make use of telework to the maximum extent possible," she said.
Economic recovery continues despite U.S. COVID-19 spikes, said National Retail Federation Chief Economist Jack Kleinhenz Monday. But the pace of improvement “appears to be slowing,” he said. Consumer spending was up 8.2% in May and 5.6% in June, he said. The Federal Reserve showed economic activity worsening on July 25 from July 18, he said. Other reports suggest the economy is “moving sideways,” Kleinhenz said: “The economy is far from being out of the woods. The question is whether it is re-entering the woods.”
Trends forged during the atypical 2020 season for back-to-school (BTS) shopping could have staying power, said Forrester analyst Brendan Witcher on a Monday RetailMeNot webinar. It might seem “a smart thing” to get as many customers into the store as possible, he said, “but that’s actually the wrong move.” Consumers during the COVID-19 pandemic “don’t want to walk into a crowded store,” said the analyst. Employees don’t want to work in a crowded store, either, he noted. Witcher encouraged retailers to publicize their stores’ safety protocols in their marketing messaging. Shoppers are preparing for the BTS season amid overall uncertainty about the virus and school policies, many faced with physical challenges of where to shop and whether they should pick up items in store or have them shipped. Witcher has been recommending that his retail clients put together BTS bundles that make sense for home schooling, “so that no matter where this pandemic takes us, you’re prepared to offer the right kinds of products to your consumers.” A May RetailMeNot survey said BTS spending would be up this year to $532 from an average $507 in 2019. Witcher said families trying to share computers are learning “what it costs to support a child in school who might have to do home or distance learning.” Flash drives, mice and tablets could push tech spending higher, he said. Having multiple alternative shopping options will be especially important this year, said the analyst, noting curbside pickup was the top investment retailers made during the COVID-19 lockdown period. He cited one large retailer that said its pre-pandemic buy online, pickup in store business was 60% of orders. Last week, the retailer reported its BOPIS business is four times that of ship-to-home. Part of that, Witcher said, could be “fear of returning” to a store if a product isn’t what the customer is seeking. Those trends are expected to continue into the holiday season.
Maggy, a Belgian startup, is using a Silicon Labs Bluetooth module to power a social distancing wearable that warns users when the space between people is too small, said the chipmaker Monday. Maggy created the device for organizations seeking to protect employees and visitors from COVID-19. Users can wear it out of the box as a lanyard or place it in their pocket and immediately sense vibrating and beeping if they become too physically close to another person with a Maggy. Silicon Labs last week reported Q2 revenue of $207.5 million, vs. $206.7 million in the year-ago quarter. IoT revenue dropped 8%. For Q3, Silicon Labs' guidance is sales of $208 million-$218 million.
Nokia took a second-quarter revenue hit of about 300 million euros ($354 million) from COVID-19, but “most of that we expect will be shifted to future periods,” said CEO Rajeev Suri on a Friday investor call. Q2 sales in North America were down 4%, a “better result than the company as a whole,” which had an 11% revenue decline, he said. The U.S. “was unfortunately hit by supply issues resulting from COVID-19,” he said. “There is a considerable amount of activity in the market related to the now-completed merger of T-Mobile and Sprint, preparation for the release of additional mid-band spectrum, operators assessing their cloud strategies and more.” Nokia had better than expected results in its 4G LTE business, said Suri. Its 5G SoC “helps us in 4G LTE when we are bidding for these combined deals which have 4G and 5G,” he said. “We haven’t yet felt the impact in any meaningful way from the 5G SoC.” But that will come “in due course,” because there’s a “six-month lag between shipments and actually banking some of the benefits.” The stock closed 7.4% higher Friday at $4.78.
Best Buy CEO Corie Barry sidestepped our questions during her Northern Virginia Technology Council video chat Wednesday (see report, July 30 issue) about how the pandemic was affecting consumer demand for more discretionary tech products like premium TVs. “We haven’t talked about that publicly,” she said. “About a trillion dollars of spend” last year went to sporting events, movies, cruises and vacations, she said. “A minuscule amount of that is being spent right now. Spending is moving into other buckets because of the way we are living our lives. I just think the idea of what might be discretionary and not will evolve over time because we’re living our lives in a way that is completely unique to anything that has come before.”