Moor Insights & Strategy Weekly Update Ending February 4, 2022

I hope you all had a wonderful week!

This week, Steve will be attending World Ag Expo. Anshel and I will be virtually attending Samsung Unpacked

A few of us will be attending MWC in Barcelona at the end of the month. Please let us know if you would like to meet up or help support your activities with sponsored videos under the Moor Insights & Strategy or Six Five brands. 

Our MI&S team published deliverables: 

The press quoted us with 12 citations. Journalists wanted to hear about Amazon, AMD earnings, Google, Intel, Qualcomm, Samsung, Spotify, and Synaptics. 

Quick Insights:

A.I./Machine Learning (Paul Smith-Goodson)

  • It is scary to think that DeepMind is claiming its new AI coding engine is “as good as an average human programmer.” The question is – is it that good? It looks like it is – According to Verge: “AlphaCode was tested on 10 of challenges that had been tackled by 5,000 users on the Codeforces site. On average, it ranked within the top 54.3 percent of responses, and DeepMind estimates that this gives the system a Codeforces Elo of 1238, which places it within the top 28 percent of users who have competed on the site in the last six months. Meta is expecting its new AI Research SuperCluster to be completed this year and that it will be the world’s fastest supercomputer with 5 exaflops of mixed-precision compute. Its objective is to build bigger and better AI models trained with trillions of pieces of data. The supercomputer will also help build other metaverse services, augmented reality tools, and assist in building AI-powered apps and products.” 
  • I’ve often wondered why traffic lights haven’t improved with technology. I hate sitting at a red light at an intersection with no other cars in sight. A German company, Fraunhofer Institute for Optronics, uses high-res cameras, sensors, and machine learning to make traffic lights a better experience. According to its simulations, AI can improve traffic flow by 10 to 15 percent. It’s not available yet, but I believe it will eventually become standardized for all traffic lights when it’s released.

AR/VR (Anshel Sag)

  • N/A

 Carrier/Wireless (Will Townsend)

  • Nokia reported earnings for its recent 4Q with impressive results. The company returned to profitability with an astounding $733M net income for the period reversing a loss from the previous year. From my perspective, Nokia’s focus on private networking and Open RAN are significant contributors to its turnaround.   

Datacenter: 

  • Storage- (Steve McDowell) 
    • N/A
  • Networking- (Will Townsend) 
    • Cisco recently announced new Wi-Fi 6E solutions within its Meraki and Cisco portfolios and a new Private 5G as a service offering. The latter was light on specifics, but I expect the company to share more details at Mobile World Congress Barcelona. In my opinion, Cisco is well-positioned to capitalize given its enormous enterprise networking install based and complimentary IoT portfolio. Both should facilitate practical uses cases within manufacturing automation which I anticipate being one of the most significant use cases.   
  • Server- (Matt Kimball)   
    • N/A  

FinTech (Melody Brue)

  • Robinhood stock has seen a steady decline since it had a healthy spike after the company’s IPO. All things were in Robinhood’s favor going into the IPO, despite a slowdown of tech debuts during the pandemic due to economic concerns. The investment app experienced rapid user growth, increased trade volume, and an additional trading boom from the meme stock frenzy, leading to a healthy valuation of $32B at IPO. After a stock high of $85, Robinhood has faced regulatory issues, been fined and given sanctions by FINRA, and their biggest revenue drivers are in jeopardy. Pay for order flow (PFOF) makes up for a large portion of the company’s revenue and is being questioned by the SEC if it is a conflict of interest. Another significant revenue driver for the company is crypto trading and data. As of late, crypto prices and trading volume are down, bringing both revenue sources down. After releasing earnings, Robinhood is currently trading at around $11, down from a high of $85. 
  • Paypal stock took a hit this week after the company just missed analyst expectations and issued conservative guidance. Supply chain issues, inflation, and further shutdowns from omicron have people buying, spending, and traveling less than expected. The company intends to concentrate efforts on users who spend more as one-third of the company’s users make up a vast majority of revenue. Concentrating on those users means less marketing spend trying to attract the smaller value customer and adding services and features to those high-end users has proven to increase their LTV in the past. The market certainly didn’t like it, but the company is still expected to process $1.5 Trillion in transactions this year, up from $1.25T last year. The pivot the company is taking to concentrate on a higher-value user is different from many fintech and payment providers in the sector aiming to democratize finance for all. Still, it’s a reasonable reaction to the economic landscape right now and is in line with the company’s brand sensibility. Hopefully, the company will lean into the Venmo product to keep the company fresh with younger users. 
  • BNPL provider Affirm has launched as a “Super App” and seems to be winning the super app race. I’ve always said BNPL appears to be a real indicator of so many economic factors, spending habits, and retail trends, so this could be signaling the trend of a bundled UX/app experience in the US. The company also recently introduced a savings account with 1.3 APY and has had more than $300M in deposits since December. I like this feature for automatic payments to keep people on track with their installment payments while also saving. In addition, the BNPL player added a Chrome browser extension that lets people use Affirm at almost any retailer. In Beta testing, they found that 30% of people chose the BNPL option at checkout when using the extension. 
  • Mastercard and Visa reported strong earnings amidst a disaster of earnings reports from multiple fintechs showing the card networks are still in favor. Mastercard reported growing in the BNPL space and has invested in future cryptocurrency projects. Visa reported their strongest quarterly revenue and reported future APIs for crypto and CBDC payments.

IIoT and IoT (Bill Curtis)

  • N/A

Personal Computing/ Collaboration (Anshel Sag) 

  • N/A

Quantum Computing (Paul Smith-Goodson)

  • Strangeworks, a quantum software provider, announced a joint collaboration with Entangled Networks, quantum hardware, and software startup. The two companies are developing a multi-quantum processor (QPU). They intend to provide a quantum Modular (multi-QPU) architecture that makes it easier to scale quantum computers. Entangled Network’s first product, MultiQopt, provides quantum circuit optimization for modular system architectures. Honeywell and IonQ are both planning on future QPU interconnected with fiber. It is likely those companies already have an optical interface in development, but there is certainly a market for the product.
  • The World Economic Forum has written “Quantum Computing Governance Principals” The WEF is trying to fill a perceived void. It believes the ethical, societal, and legal impact and risks of quantum computing are just starting to be discussed, and no global “guidelines” yet exist. This report lays out the first set of principles for the responsible design and adoption of quantum computing technologies to drive positive outcomes for society; it also outlines the key actions to be taken by stakeholders to incentivize the development of the technology while mitigating the possible risks. My take is that, while worth reading, guidance, and regulations can take on a life of its own and should be country-centric. The report can be downloaded here.

Security (Will Townsend)

  • The U.S. Cybersecurity and Infrastructure Security Agency (CISA) recently published an advisory regarding Airspan Networks Mimosa infrastructure vulnerabilities. Airspan acquired Mimosa in the fall of 2018. Mimosa provides point-to-point connectivity solutions for broadband access employed by many Wireless Internet Service Providers (WISPs). I expect that Airspan will address the issues immediately, given it is becoming one of the early front runners for small cell densification needed for CBAND deployments as well as Open RAN and vRAN.        

Space (Paul Smith-Goodson)

  • Good news from the Webb telescope. It has detected its first photons of light. It’s also positive that the photons have been detected by the New Infrared Camera instrument. The process of adjusting and focusing the mirrors will continue in 7 phases for another three months. When it is finally adjusted, images should be spectacular.  

Columns Published (Forbes, eWEEK, UPLOAD VR, and others

  1. South Florida Water Management District Upgrades Business Plumbing With SAP S/4HANA, by Patrick Moorhead

Blogs Published (MI&S)                                                              

  1. Companies Becoming Good For The Environment And For Business Discover It Takes Practical Innovation Implemented Today, by Patrick Moorhead
  2. The State Of 5G In Early 2022, by Anshel Sag
  3. Cisco And The Rise Of Networking As A Service, by Will Townsend

Research Paper(s):

  • N/A

Podcasts:

The G2 on 5G by Moor Insights & Strategy, with Anshel Sag and Will Townsend

DataCentric Podcast by Moor Insights & Strategywith Matt Kimball and Steve McDowell

  • N/A

The Six-Five Podcast by Moor Insights & Strategy and Futurum Research, with Patrick Moorhead and Daniel Newman

Moor Insights & Strategy Podcast

 Press Citations: 

  1. Amazon, Cloud, Earnings / https://www.fiercetelecom.com/cloud/amazon-plots-cloud-expansion-aws-hits-71b-run-rate
  2. AMD, Earnings / Yahoo Finance https://finance.yahoo.com/video/amd-earnings-reflect-chip-makers-214510535.html
  3. AMD, Earnings / https://siliconangle.com/2022/02/01/amds-stock-rises-10-another-blowout-quarter-bullish-forecast/
  4. AMD, Earnings / https://theglobalherald.com/business/amd-earnings-reflect-chip-makers-competitiveness-and-ability-to-execute-analyst-says/
  5. Google / Androidcentral https://www.androidcentral.com/google-project-iris-does-google-have-place-ar-or-vr-future (Anshel Sag)
  6. Intel / The Register https://www.theregister.com/2022/01/31/intel_earnings_analysis/
  7. Intel / FXStreet https://www.fxstreet.com/news/intel-stock-news-and-forecast-intc-slumps-on-capex-strategy-margins-202201281431
  8. Qualcomm, Earnings / SiliconAngle https://siliconangle.com/2022/02/02/qualcomm-delivers-solid-q1-earnings-revenue-beat-amid-improving-supply-situation/
  9. Samsung / AndroidCentral https://www.androidcentral.com/if-samsung-launches-s22-ultra-less-ram-theres-reason-why (Anshel Sag)
  10. Spotify / AndroidCentral https://www.androidcentral.com/spotifys-misinformation-honeymoon-over-whip-has-been-cracked (Anshel Sag)
  11. Synaptics / Embedded https://www.embedded.com/reference-design-offers-wireless-docking-over-wi-fi-6e-for-pcs/
  12. Synaptics / Tomshardware https://www.tomshardware.com/news/synaptics-announces-gemini-reference-docking-station

Company:

  • N/A

New Gear or Software We are Using and Testing that is Public Knowledge 

  • AMD RX 6600XT
  • Apple iPhone 13 mini, MacBook M1 Pro 14”, MacBook Pro 16” M1 Max
  • Dell UltraSharp Webcam 4K, XPS 17
  • Halo 20th Anniversary Xbox Controller
  • HP Reverb G2 Omnicept
  • Intel Alder Lake desktop
  • Microsoft Surface Duo 2, Surface Laptop Studio
  • Samsung Galaxy buds 2, Galaxy Watch 4, Galaxy Z Fold3 5G, and the Galaxy Z Flip3 5G, Galaxy Watch4 Classic 46mm
  • TCL 20 Pro 5G
  • Xilinx Kria KV260 Vision AI Kit

Events MI&S Plans on Attending In-Person or Virtually (New) 

  • February
    • World Ag Expo, Feb 8-10, Tulare, CA (Steve McDowell)
    • Samsung Unpacked, Feb 9 (Patrick Moorhead, Anshel Sag) 
    • Intel Investor Day, virtual, February 17 (Patrick Moorhead)
    • Zoholics, virtual, February 22 (Patrick Moorhead)
    • Oracle Database Analyst Summit, virtual, February 23 (Patrick Moorhead)
    • Mobile World Congress Barcelona, February 28 – March 3 (Will Townsend, Patrick Moorhead)
  • March
    • SXSW, Austin, March 11-13 (Patrick Moorhead)
    • NVIDIA GTC, San Jose, March 21-24 (Steve McDowell, Patrick Moorhead., Paul Smith-Goodson, virtual)
    • Aruba Atmosphere, March 27- April 1 (Will Townsend)
    • Data Center World, Austin, March 28-31 (Steve McDowell)
  • April
    • NAB Show, Las Vegas, April 24-27 (Steve McDowell)
    • Zoho Day ‘22, Austin, April 25-27 (Patrick Moorhead)
  • May
    • Dell Tech World, Las Vegas, May 2-5 (Steve McDowell, Patrick Moorhead)
    • IBM Think, May 9-13 (Steve McDowell, Patrick Moorhead)
    • Intel Vision, May 10-11 (Steve McDowell)
    • Computex, May 24-27, (Patrick Moorhead –tentative)
  • June
    • Six Five Summit 2022, Virtual, June 7-9 (Patrick Moorhead)
    • Cisco Live, June 13-16 (Patrick Moorhead)
    • HPE Discover, June 28-30, Las Vegas (Steve McDowell)
  • July
  • August
    • Flash Memory Summit, Aug 2-4, Santa Clara (Steve McDowell)
  • September
    • SNIA Storage Developer Conference, San Jose, Sept 28-29 (Steve McDowell)

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The Team 

Analysts, Analysts In-Residence, Contributors

  1. Patrick Moorhead, Founder, CEO, Chief Analyst; Broad technology coverage plus deep insights into Cloud & SaaS, Personal Computing, Semiconductors, Automotive 
  2. Bill Curtis, Analyst In-Residence, IIoT, and Deep IoT Technology 
  3. Matt Kimball, Principal Analyst, Datacenter Servers, CI, and HCI 
  4. Melody Brue, Principal Analyst, Financial Tech
  5. Steve McDowell, Principal Analyst, Datacenter Storage, and Storage Technologies 
  6. Anshel Sag, Principal Analyst; V.R., P.C. Gaming, Mobile Platforms 
  7. Paul Smith-Goodson, Principal Analyst; Machine Learning, A.I. and Quantum Computing 
  8. Will Townsend, Principal Analyst; Security, Carrier Services, Networking 
  9. Chris Wilder, Contributor, Security 

Operations 

  1. Dan Pickens, Business Director 
  2. Paula Moorhead, Marketing Director, Website, and Social Media 
  3. Walker Pickens, Media Relations, and Writer 
  4. Zane Pickett, Office Manager, AP., AR, travel, writer 
  5. Lee LeClercq Williams, Business Associate 
  6. Jacob Freyman, Writer, and Researcher 
  7. Connor Kenyon, Six Five Sales & Business Development