Weekly Report WEEK ENDING July 31, 2015

INSIDE THIS ISSUE: This Week’s Stories GM Quickly Issues Fix For OnStar Hack, But Service Still THIS WEEK’S STORIES Vulnerable GM Quickly Issues Fix For July 30, 2015 OnStar Hack, But Service Still Vulnerable Just last week Chrysler recalled 1.4 million vehicles after revealed a software bug. Now, a new hack exposes a vulnerability in GM vehicles equipped with OnStar. GM issued a quick fix, however, AT&T Closes DirecTV Kamkar says the problem still exists. Acquisition: Reviewing The Concessions And Benefits Just this morning, security researcher Samy Kamkar posted a YouTube video of a device called OwnStar, which he claimed enabled him to monitor and intercept communications between General PRODUCTS & SERVICES Motors' OnStar RemoteLink app and any OnStar-equipped car.

Numerous Wants To Be The The bad news is that the hack is legitimate. GM worked to quickly issue a fix, but Kamkar discovered Ultimate App For Number that fix was incomplete, a fact that GM has confirmed. The cars are still vulnerable. Geeks With the OwnStar device, Kamkar was able to issue commands through OnStar's RemoteLink app -- Translate App Adds 20 which lets drivers control some features of their cars like locking doors and turning on lights with a More Languages mobile device -- to any of GM's compatible cars. OnStar, an in-vehicle system that provides security services, hands free calling, turn-by-turn navigation and more, is available in more than 30 GM vehicles. EMERGING TECHNOLOGY Kamkar was able to act as if he owned the car in the video, finding it’s the exact location, unlocking the doors and even starting the engine. Apple To Release New Apple TV In September, Report Says In the wake of the Chrysler hacks last week, this is yet another reminder that the road to fully connected cars is proving to be a bumpy one. Automakers and other tech firms are racing to outfit cars with more Google Quietly Distributes New technology, especially ones that connect them via the . Cars are no longer standalone devices; Version Of Glass Aimed At they are part of the Internet of Things, the concept of using sensors and other tech to connect everyday Workplaces items to the Web. That can leave your car as vulnerable as your computer or to hacks, but with greater consequences. MERGERS & ACQUISITIONS The hack is not quite as bad as it sounds. Kamkar couldn't drive off in the car without the key, and cars Hisense To Buy Sharp that have been started remotely automatically shut off in 10 minutes if they haven't been driven away. America In $23.7M Deal That said, the idea that any stranger could be tracing your car's location and unlocking its doors is very disconcerting to say the least. Comcast’s NBCUniversal Is In Advanced Talks To Invest In The hardware used for the OwnStar device appears to be a mixture of an extremely simple computer BuzzFeed called a Raspberry Pi and some wireless adapters, all tucked into a small protective case. Kamkar has not fully detailed the nature of the OwnStar hack, waiting to spill all the beans at the annual Defcon INDUSTRY REPORTS hacker conference in Las Vegas, Nevada.

GM is working on a subsequent and hopefully final fix for the RemoteLink app and said it will be T-Mobile Keeps Growing, And available "soon." Until then, to be safe, it would be wise to avoid its use. CEO John Legere Won’t Stop Bragging About It Update, 10:31 a.m. PT: Security researcher Samy Kamkar says that GM's fix to the OnStar system was not successful. Samsung Profits Drop For Fifth Straight Quarter, Company cnet.com

Blames Tough Mobile Business Environment AT&T Closes DirecTV Acquisition: Reviewing The Concessions And Benefits July 27, 2015

AT&T closed its $49 billion acquisition of television provider DirecTV on Friday, after the Federal Communications Commission ratified the deal. While the company had to make some

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concessions in order to gain federal approval (relating to its broadband services and net neutrality), we “The merged company will be think that they were worthwhile, considering the revenue and cost synergies that the combined able to offer a “quadruple- company would provide in an increasingly competitive wireless and content distribution landscape. The deal will make AT&T the country’s largest pay TV provider, with more than 26 million total subscribers play” bundle that includes (20 million from DirecTV and about 6 million from AT&T’s native U-Verse service). To recap, DirecTV four bundled services (mobile shareholders received 1.892 shares of AT&T common stock and $28.50 in cash per DirecTV share owned. Below is a brief run-down of what it took to get the deal done and how shareholders of the and fixed-line phone service, combined company are likely to benefit. high-speed Internet and TV), compared to the three offered Trefis has a $37 price estimate for AT&T is about 8% ahead of the current market price. We will be updating our valuation model shortly to reflect the business combination and our updated outlook. by Comcast (fixed-line,

Internet and TV) and What Concessions Did AT&T Have To Make? (wireless, fixed-line, To get the deal done, AT&T has agreed to a few FCC-mandated conditions. The company will expand broadband).” its high-speed gigabit fiber optic broadband access to 12.5 million customers. This translates to roughly 10 times the size of its present gigabit fiber deployment. The company will also have to offer discounted broadband to low-income households, while serving schools and libraries with better broadband access. More notably, the company has agreed to adhere to the FCC’s stricter net neutrality obligations that were passed this February. AT&T has agreed to prevent discrimination against its online video competition and it won’t provide favorable treatment for its own video offering under data caps. The firm has also agreed to share all its completed interconnection agreements with the FCC. This could be seen as a win for the FCC, since AT&T has been one of the strongest opponents to the agency’s controversial new rules. AT&T had earlier publicly opposed the move along with other service providers and the firm was the first major Internet service provider to file a lawsuit against the FCC in relation to the issue last April.

How The Deal Adds Shareholder Value?

1) Bundled Services To Bring Cost and Revenue Synergies: The merged company will be able to offer a “quadruple-play” bundle that includes four bundled services (mobile and fixed-line phone service, high-speed Internet and TV), compared to the three offered by Comcast (fixed-line, Internet and TV) and Verizon (wireless, fixed-line, broadband). Besides providing AT&T with a competitive advantage in attracting new customers, the bundle could also induce DirecTV customers into switching on to AT&T for mobile services. Providing customers a greater number of services should effectively reduce overhead costs and bring down churn rates, limiting new customer acquisition costs for the carrier. The deal would also result in substantial savings, as the companies expect cost synergies of over $2.5 billion annually within three years of the deal closing, primarily on account of lower content costs (see below) and greater efficiencies in areas where operations of both companies overlap.

2) Upping AT&T’s Content Game And Diversifying Its Distribution Footprint: The deal enables AT&T to become a leader of sorts in the content distribution space, across various platforms including mobile, broadband and TV. AT&T will also gain rights to content such as the NFL Sunday Ticket, which is one of the hallmarks of DirecTV’s offerings. The deal should also provide the company more leverage in negotiating with content providers, being the single largest pay TV provider in the . DirecTV’s core business has been increasingly facing headwinds as the U.S. pay TV Market saturates (top pay-TV providers lost about 125,000 customers in 2014), partly due to the rise of alternative platforms such as online streaming services and content consumption on mobile devices. However, the more diversified distribution footprint of the AT&T-DirecTV combo should help to alleviate some of these concerns, since it could adapt content for various platforms while potentially launching new over-the-top video services that can be offered to AT&T’s broadband and mobile customers. The diversified distribution footprint could effectively hedge AT&T’s role as a content distributor.

3) Growth In Latin American Markets: The deal is also expected to help AT&T enter into lucrative markets in Latin America, where DirecTV is the leading pay-TV provider with over 18 million subscribers (including Sky customers). There is still ample room for growth in the region, given its burgeoning middle class and low levels of pay-TV penetration (40%). Latin America has been DirecTV’s fastest growing business division in the wake of saturating U.S. markets.

forbes.com

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Products & Services Numerous Wants To Be The Ultimate App For Number Geeks July 31, 2015

Numbers make the world go ’round. Or so the old adage should go.

Numbers hold a lot of inherent meaning within the context of things that matter to us, be it hobbies, work, or the world at large. Whether it’s counting down to your holiday, counting up from when you stopped smoking, tracking your website’s monthly average users (MAUs), or knowing the current euro- to-dollar exchange rate — numbers are important.

This is the thinking behind Numerous, a startup founded in 2013 by John Scalo, a developer who plied his trade at Apple for twenty years; and Charlie Wood, formerly CEO of Spanning, a data backup company acquired by EMC last year. Numerous was built for numbers geeks.

The app’s core raison d’être is to help you track all those important numbers in your life, and Numerous has just lifted the lid on a major face-lift, which ushers in a new logo, user experience, integrations, and features. It’s basically a new product.

Available for iOS and Android, Numerous lets you build a profile of all the numbers in your life that mean something to you.

You can dig through the myriad of categories and pre-created “Numbers” — you can create tiles that always show your elevation, distance from a specific location, temperature, data, number of followers, Facebook friends, and more. You can also set up alerts so that you’re notified whenever a number changes (based on a threshold set by you).

With the latest version of Numerous, there is a brand new category in tow — Business Numbers. This taps the likes of Salesforce, Stripe, Google Sheets, Google Analytics, Facebook , Coinbase, and more.

This move beyond “personal” numbers and into the enterprise signals where Numerous is heading — it’s encroaching on the territory of data dashboard aggregators such as Geckoboard. Except through Numerous, you can view key Salesforce metrics alongside the number of followers you’ve accrued on Twitter and the number of days until “The Martian” is released in theaters.

What you end up with is a tile-filled screen full of numbers — which can be edited, deleted, and moved.

You can also manually create tiles. For example, “Countdown” lets you enter a date and a title, and then the number of hours or days since/until that date will update automatically.

Moreover, with IFTTT support now included in the offering, users can create actions based on their numbers. This could be something trivial such as “When the company Facebook account hits 10,000 ‘Likes,’ email my boss to ask for a raise.”

Or, “If sales drop below $5,000 in a given week, email Bob the salesman and tell him he’s fired” (kidding, Bob).

As Numerous also integrates with Google-owned home-automation company Nest, you can also set up rules that tie the numbers to physical objects in your home. And there’s scope to open this up to other “Internet of things” companies, too.

Indeed, this launch also sees Numerous morph into a platform — it has launched two new APIs which serve up access to Metrics, letting users create and update numbers; and Channels, which lets developers connect the app to additional sources of data that Numerous doesn’t offer itself.

“The world is increasingly instrumented and life is increasingly quantified,” says Numerous co-founder Charlie Wood. “We want people to be able to spend less time checking their phones and more time enjoying life. With today’s launch, Numerous realizes our vision of an end-to-end system that connects people to the numbers that permeate their lives and puts those numbers to work.”

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Perhaps my one big gripe with Numbers is that you can only sign up using Facebook, Twitter, Google, or iCloud accounts — there is no email option. If you’re fine with that, then it’s plain sailing.

Also, the Android version seems decidedly less slick and feature-rich than the iOS incarnation. When you elect to add a new “Number” from the category list, it isn’t categorized in the same intuitive way as on iOS, and there don’t seem to be the same options. Moreover, there’s no obvious way of deleting a “Number” from your home screen.

Numerous is based in Austin, Texas, and Santa Cruz, California. The company has raised $700,000 in seed funding to date, from well-known names such as FG Angels, Techstars Ventures, and Stage One Capital. The company also hinted that a Series A round isn’t far off.

The company tells us that it’s planning to expand in order to cover more platforms in the short-term, with a Mac and Web app on the horizon — and this could be key if it is to appeal more to the business fraternity.

Numerous also says that plans are afoot to add myriad types of sports data to the mix, including real- time sports scores and ladders for the likes of the NFL and NBA. The fantasy sports industry is said to be worth $15 billion in the U.S. alone, so reeling in detailed stats for players and teams will figure highly on Numerous’s agenda.

At any rate, Numerous is a beautifully simple, fun, and addictive app that should find fans from all walks of life.

venturebeat.com

Google Translate App Adds 20 More Languages July 29, 2015

Google is expanding the repertoire of its Translate app to handle more than two dozen different “The Google Translate app languages. offers three ways to translate Designed for both iOS and Android, the Google Translate app is adding 20 new languages. You'll be text. You can simply type the able to translate to and from English with Bulgarian, Catalan, Croatian, Czech, Danish, Dutch, Filipino, text you want translated. You Finnish, Hungarian, Indonesian, Lithuanian, Norwegian, Polish, Romanian, Slovak, Swedish, Turkish and Ukrainian. For Hindi and Thai, you'll be able to do one-way translations from English. can speak the text. Or you can point your mobile Counting English, French, German, Italian, Portuguese, Russian and Spanish, that makes for a total of device's camera at a sign, 27 languages that the app will be able to recognize. book or other object with text The update is rolling out over the few days, so you may not see it right away. But it should pop up on it and watch as that text is by the end of the week. automatically translated into Google also offers a translation feature via its website search results and directly through its Chrome the language of your choice.” browser. But there's clearly a need for portable, on-the-go translation.

The company faces potential competition from Skype Translator, which will be bundled with the Skype for Windows desktop app by the end of summer. The challenge for Google Translate and Skype Translator alike is to translate text on the fly and do it as quickly and accurately as possible, a la Star Trek's universal translator. Accuracy is key as using machine technology to translate certain phrases and colloquialisms is still a challenge.

The Google Translate app offers three ways to translate text. You can simply type the text you want translated. You can speak the text. Or you can point your mobile device's camera at a sign, book or other object with text on it and watch as that text is automatically translated into the language of your choice. No Internet connection is required, so you can use the visual translation offline. (Camera mode supports a total of 37 languages.)

Google is also promising smoother, more natural conversation, even on a slow mobile network.

"In many emerging markets, slow mobile networks can make it challenging to access many online tools -- so if you live in an area with unreliable mobile networks, our other update today is for you," Barak Turovsky, product lead for Google Translate, said in a blog post on Wednesday.

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To help improve its app's translation skills, Google relies on the Translate Community. At this site, people can correct any translation that Google gets wrong and type in their own phrases and translations. But even with the help of the Translate Community and today's update, there's still more to be done to enhance Google Translate's skill set.

"We've still got lots of work to do: more than half of the content on the Internet is in English, but only around 20 percent of the world's population speaks English," Turovsky said. "Today's updates knock down a few more language barriers, helping you communicate better and get the information you need."

cnet.com

Emerging Technology Apple To Release New Apple TV In September, Report Says July 31, 2015

Rumor has it that Apple should soon release a new version of its set-top box as well as a new “The company wants to streaming service for TV content. According to a new report by Buzzfeed, Apple was supposed to release the new device with announce the new Apple TV at WWDC, but it was delayed for a September launch existing third-party services, The current Apple TV was released in 2012 and runs an underclocked A5 chip, which was originally such as Netflix, Hulu, HBO developed for the iPhone 4S. This time, the Apple TV should use a much more recent chip, such as the Now and Showtime as the iPhone 6’s A8 chip. A slimmer design and more internal storage wouldn’t be a surprise as well. existing Apple TV has been Yet, two big questions remain on the user interface and Apple’s content strategy. The current interface around for too long.” of the Apple TV is cumbersome and the company knows that it has to do something to fix it. Using for voice queries would be a first step as both Google and provide a similar feature with the Nexus Player and Fire TV.

Recent patent applications have also indicated that Apple has been working on some sort of touch interface for the Apple TV. It’s unclear whether Apple will take advantage of your iPhone or create a brand new remote with a touch screen.

On the content front, the Apple TV service has been rumored for years and it seems that it’s not quite ready yet. While the new Apple TV announcement has been delayed, you shouldn’t expect to see an Apple-branded streaming service in September. Instead, the company wants to release the new device with existing third-party services, such as Netflix, Hulu, HBO Now and Showtime as the existing Apple TV has been around for too long. Similarly, Apple wants people to buy as many new Apple TVs as possible in order to be ready when it launches its new streaming service months later.

As a reminder, Apple announced the during the iPhone event last year. Supply chain leaks indicate that Apple is working on iPhone 6S — Apple won’t spend an hour and a half talking about the new 6S, leaving room for another announcement. Announcing a new Apple TV during the same event would make sense.

Finally, Apple should release an SDK as well as a dedicated for the TV. It would bring the Apple TV up to par with Android TV and make the device much more powerful. Even if Apple doesn’t launch its streaming service at the same time, third-party developers could start developing for the new device right away before the Apple TV becomes a must-have.

techcrunch.com

Google Quietly Distributes New Version Of Glass Aimed At Workplaces July 30, 2015

Google Inc. is quietly distributing a new version of its Glass wearable computer aimed at businesses in industries such as health care, manufacturing and energy, according to people familiar with the situation.

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The new Glass is a curved rectangle, similar to the first Explorer version, but does not include a wire- like frame. Instead, it has a button-and-hinge system to attach the mini-computer to different glasses, the people said.

Google is pitching the new version exclusively to businesses. A new consumer version is at least a year away, the people familiar with the matter said.

Google doesn’t plan to officially launch the new version, the people said, a far cry from the skydivers who brought the first version to a Google conference in 2012. Instead, Google is distributing the new model to software developers creating programs to use the device in business settings. The goal is to have businesses using the device by fall, the people said.

Google didn’t respond to requests for comment.

The initial version of Glass, which sold for $1,500, prompted a widespread privacy backlash because users could record video in public places without others noticing. Google stopped selling it in January and executives have admitted that the device was released before it was ready for consumers.

As recently as late 2014, Google planned a revamped consumer version, according to the people familiar with the matter. They said Google had bought or leased real estate in several cities for stores that would sell the device.

Around December, this plan was scrapped, the people added, and the Glass team was moved out of the Google X research lab and into the Nest connected-home division, led by former Apple Inc. executive Tony Fadell.

The shift reflected a tension inside Google between engineers familiar with software and those with a hardware background. Google is famous for releasing early versions of software products and tweaking them with improvements, based partly on feedback from users. But Mr. Fadell, a hardware veteran, prefers to keep products under wraps until they are ready for consumer use. He has said that it takes longer to develop hardware than software. A spokeswoman for Mr. Fadell referred questions to Google.

The people familiar with the matter said Google remains committed to the technology and ultimately releasing a new consumer version.

Google hopes to skirt privacy issues with the current model, because it will be used mostly in private workplaces. Surgeons used the initial version during procedures, either to get advice from colleagues remotely or to instruct medical students. Field workers tested it while fixing expensive machinery with help from co-workers back at headquarters.

The new model has a faster processor, improved battery life of as long as two hours and improved wireless connectivity, the people said. The cube-like glass prism used to project the display into users’ field of vision is longer and thinner in the new version. This can be moved vertically as well as horizontally, while the first version offered only horizontal adjustment, one of those people said.

Version two also comes with a battery pack that Google developed specifically to connect magnetically to the gadget, the people added. With the first version, which suffered from short battery life, users often hooked the device up to battery packs developed by other companies using mini USB connectors.

wsj.com

Mergers and Acquisitions Hisense To Buy Sharp America In $23.7M Deal June 31, 2015

Chinese TV manufacturer Hisense has today announced it will acquire Sharp America in a deal worth $23.7 million that will see it take over the Japanese company's TV business in North and South America.

Hisense Group today released a statement confirming it would purchase "all equity and assets of Sharp's TV factory in Mexico for $23.7 million with rights to use the 'Sharp' brand name and all its channel resources in both North and South American regions."

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In a TV market dominated by the likes of LG, Samsung, and Panasonic, this deal will see Hisense become a serious contender in the Americas, and also marks a broader shift by Chinese brands to grab a bigger slice of the consumer market in the region. Having manufactured flat panels for more than a decade, Hisense is well-placed to capitalize on potential growth in an industry with its eyes set on 4K and OLED TV technologies, and to capture consumers looking for an established brand with a lower price tag.

Sharp Corporation, the 103-year-old Japanese electronics company, was an early investor in LCD technology but has struggled in recent years to keep up with Korean and Chinese competitors. Sharp has championed innovations like a fourth sub-pixel (yellow) to enhance picture quality in LCD and this year has added Android TV to its lineup.

While the Sharp name may endure on retail shelves as Hisense gains the right to continue using the brand, Sharp's American operation will otherwise move from Japanese hands and come under full ownership of the Qingdao-based Chinese company.

Founded as a small radio factory in 1969, Hisense is an established manufacturer of major appliances and whitegoods, TVs, tablets and laptops, and claimed "overseas sale revenue" of $2.6 billion in 2014. A strong brand in China, the company now sells in 130 countries worldwide.

But while Hisense continues to be a strong brand in the Chinese market, similar to fellow Chinese players TCL, Haier and Changhong, it has been pushing to achieve the market dominance and brand awareness enjoyed by Korean heavyweights Samsung and LG, and Japanese powerhouse Sony.

The company has been pushing to distinguish itself from rivals, partnering with Roku in 2014 to produce a line of flat panels for the US market with Roku streaming built-in. It also took to the stage at CES in Las Vegas this year to show off a number of eye-catching innovations including the Vidaa Max short- throw laser projector and the Chill, an in-home beverage vending machine.

The company has also been on a marketing offensive for broader recognition outside its homeland, with sponsorship deals for the Nascar Xfinity Series in the US and the F1 Grand Prix.

But while Hisense may not have broken into the 'big four' TV brands outside Asia, it is joining other Chinese manufacturers such as TCL in making a strong impression on the global AV market. With a strong presence at CES in recent years, these Chinese challenger brands are making a strong play in the 4K space, bolstering their smart TV offerings and slowly but surely becoming a force to be reckoned with.

It remains to be seen what the deal means for Sharp's wider international operations and the implications for its TV business in Japan and other markets outside the Americas.

cnet.com

Comcast’s NBCUniversal Is In Advanced Talks To Invest In BuzzFeed July 30, 2015

Comcast Corp.’s NBCUniversal is in advanced talks to make a significant minority investment in "NBCUniversal is in advanced BuzzFeed, as the media giant hunts for ways to reach young audiences, according to people familiar with the situation. talks to make a significant minority investment in The terms being discussed would involve a roughly $250 million investment by NBCUniversal in BuzzFeed, a hot new media property that has built a huge audience of young users over the past BuzzFeed, as the media giant several years, the person said. The deal would value BuzzFeed at around $1.5 billion. The talks are hunts for ways to reach fluid, so the terms may change or the deal may yet fall apart. young audiences, according Comcast is also in talks to raise its roughly 14% stake in Vox, which owns a suite of eight websites that to people familiar with the together average more than 50 million unique visitors a month. That deal would value Vox at roughly situation.” $850 million, the person said.

The Wall Street Journal last week first reported that NBCUniversal was in talks with BuzzFeed and Vox, among other new media companies such as Vice, over potential deals. The tech news website Re/Code earlier Thursday reported that NBCUniversal was close to an investment deal with BuzzFeed.

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NBCUniversal owns channels including USA, Bravo, E! and MSNBC. Like other media companies, the Comcast unit is struggling with the decline of ratings, particularly in younger demographics, as viewing shifts to online video and more people drop their pay television connections. The median age of prime- time TV viewing rose from 46.3 to 50.5 in the five years ending in June 2015, according to a Horizon Media analysis of Nielsen data.

BuzzFeed has quickly risen to the top of the heap through its aggressive use of , which helped it draw in 79.6 million unique visitors in June, according to comScore Inc. In late 2014, the site received a $50 million investment from Andreessen Horowitz that valued it at $850 million. Through cleverly-constructed “native ads” or sponsored content, the site said it brought in more than $100 million in revenue last year.

But it also has increasingly turned its focus to video, which brings in substantially higher ad dollars than other kinds of advertising vehicles. It has rapidly expanded its Los Angeles-based BuzzFeed Pictures studio to churn out content largely designed to be watched on social media platforms rather than its own site.

Last month, BuzzFeed Chief Executive Jonah Peretti said the company was actively exploring how to bring that content to television screens, making a potential partnership with Comcast worthwhile.

There’s no certainty that investing in new media sites will be an effective strategy, however. Companies like BuzzFeed and Vox are trying to navigate an increasingly crowded Web news landscape, and there are questions about the sustainability of building businesses primarily with advertising revenue.

wsj.com

Industry Reports T-Mobile Keeps Growing, And CEO John Legere Won’t Stop Bragging About It July 30, 2015

With 2.1M new subscribers, T-Mobile dominated U.S. smartphone growth in Q2. Whether you like him “While both AT&T and or not, John Legere’s plan is working. Verizon had comparable What happens when you combine a bombastic CEO with a marketing strategy that ruthlessly attacks its quarters to T-Mobile in overall competitors? Apparently, it’s 2.1 million new customers. customer growth, T-Mobile nd walloped them when it came On Thursday T-Mobile US reported 2 quarter net subscriber additions of 2.1 million, bringing its total number of connections to 58.9 million. The company managed to lure more than 1 million subscribers to to postpaid phones.” its networks for nine straight quarters. In three of the last four quarters its customer ranks grew by more than 2 million—strong evidence that its aggressive Uncarrier campaign is still working its charms.

T-Mobile has long been the smallest of the four nationwide carriers, but in the last two years its outspoken and media-savvy CEO John Legere has orchestrated a huge turnaround, largely by shaking up the mobile industry. Promotions like T-Mobile’s Jump phone upgrade programs and its Freedom service, which exempts audio streaming from customers data plans, have put its larger competitors on the defensive. In the last year T-Mobile has been in a race to overtake Sprint, which will post its earnings on Tuesday. Although, unless Sprint has exceptional customer growth to report, T- Mobile will likely become the third largest U.S. operator.

T-Mobile’s subscriber growth helped it garner Q2 profits of $361 million (or 42 cents a share) off of $8.2 billion in revenue, which increased 14% year-over-year.

Depending on how you look at it, T-Mobile either owes its success to—or in spite of—its fiery CEO John Legere, who’s profanity-laced tirades against the competition on Twitter and in media interviews have become legendary. At T-Mobile’s earnings call this morning, Legere kept the four-letter words to a minimum, but even as he highlighted new features and campaigns he ridiculed AT&T and Verizon’s— which Legere calls “dumb” and “dumber”—attempts to counter to them.

For instance, when T-Mobile earlier this month introduced its Mobile Without Borders program, which essentially extends most T-Mobile calling and data plans to Mexico and Canada at no additional cost,

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Verizon responded with its own $5 per month international calling add-on plan, which Legere dismissed as “lame. They make my job too easy,” Legere said of T-Mobile’s competitors. “I appreciate that. Keep it up.”

While 2.1 million net subscriber additions is certainly impressive, not all mobile subscriptions are created equally, though. If you break down T-Mobile’s numbers we see an 886,000 wholesale connections from virtual carriers like Ultra Mobile and Google’s Project Fi that buy network capacity from T-Mobile at much lower rates than a retail customer would pay. Of its 1.86 million retail net additions, 178,000 were MetroPCS prepaid subscribers as well as 248,000 tablet and data modem connections, two categories that trend toward the lower end of the spending spectrum.

The key number to focus in on is 760,000, the number of postpaid phone subscribers T-Mobile added in the second quarter. They represent high-value smartphone connections—subscribers signing up for T- Mobile’s core voice and data plans—and they’re the most difficult kind of subscriptions to acquire. In an age where practically everyone already has a phone, the only way to grow your smartphone base is to steal customers away from the competition. In that area, T-Mobile excelled.

While both AT&T and Verizon had comparable quarters to T-Mobile in overall customer growth, T- Mobile walloped them when it came to postpaid phones. Of AT&T’s 2.1 million additions, 1.4 million were Internet-of-things connections, mainly supplying the links to automakers GM, and Tesla’s systems. Meanwhile Ma Bell actually lost 410,000 postpaid phone subscribers in the quarter (many of whom likely wound up at T-Mobile). Verizon grew its postpaid phone ranks by 321,000, but most of its success throughout the quarter came from connecting tablets, not phones.

Still, T-Mobile’s weaknesses stood out right alongside its strengths. While those Internet-of-things and tablet connections may not bring in the same revenue as smartphone plans, they’re also big growth areas, which Verizon and AT&T are taking full advantage of while T-Mobile scraps it out for phone subscribers. On tablets, in particular, T-Mobile has failed to make any sizable dent in the market, and it actually shed Internet-of-things connections in Q2.

T-Mobile’s feistiness also extends to its customers, which have a higher turnover rate than customers from other operators. T-Mobile’s postpaid churn rate—the percentage of customers who leave for greener pastures every quarter—was 1.32%, compared to 1.01% for AT&T and 0.9% for Verizon.

T-Mobile, however, has started fixing what many consider its biggest weakness: coverage. The knock on T-Mobile is that it works great when you’re in the big cities, but in the vast spaces in between your signal goes to pot. The operator has started building new LTE networks in the 700 MHz band, which will propagate signals much further than its other networks, to fill in those gaps as well as provide better in-building coverage. Legere said T-Mobile networks will cover 300 million people in the U.S. by year’s end.

It’s been more than two years since Legere introduced the country to a rejuvenated version of T-Mobile, but the Uncarrier shows few signs of slowing down. Since the end of second quarter, T-Mobile has already introduced two new programs intended to keep the competition on its toes: Mobile Without Borders and Jump! On Demand, an upgrade program that lets customers trade in their phones for newer models at any time.

T-Mobile has to falter at some point though. There’s no way it can keep up its growth through postpaid smartphone plans alone. You can bet Verizon, AT&T and Sprint are waiting for that day, if only to get John Legere to shut up.

fortune.com

Samsung Profits Drop For Fifth Straight Quarter, Company Blames Tough Mobile Business Environment July 29, 2015

Samsung Electronics offered a downbeat outlook for the third quarter after April-June profit dropped on a supply shortage for one of its main smartphone models, underscoring continued headwinds for the tech giant.

Samsung remained the world’s top smartphone seller in the second quarter, but investors and analysts say the South Korean firm’s inability to meet demand for its curved-screen S6 edge likely cost the firm in April-June.

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Second-quarter operating profit fell 4 percent to 6.9 trillion won ($5.9 billion), matching an estimate issued by the company early this month. But the firm doubled its interim dividend payout to 1,000 won per common share.

“While 2H 2015 is expected to present mounting challenges, the company will try to improve earnings,” Samsung said in a statement.

The mobile business reported an operating profit of 2.76 trillion won, down from 4.42 trillion won a year earlier.

Samsung has said the supply problem is resolved and it is also is bringing forward the launch of its Galaxy Note phone. The company also said on Thursday it will be flexible on pricing for its premium Galaxy S6 smartphone models to keep sales up.

But analysts say an expected unveiling of Apple’s new iPhones in September will limit sales growth in the third quarter.

The firm said on Thursday that the mobile division faces a tough business environment as smartphone market growth slows.

On the bright side, the chips division reported an operating profit of 3.40 trillion won, up from 1.86 trillion won a year earlier on the back of healthy demand for memory chips and sales growth for its mobile processors.

Overall, annual profit is expected to rebound from a three-year low marked in 2014, thanks to robust profits and some stabilization for the mobile business.

An average forecast from a Thomson Reuters I/B/E/S survey of 48 analysts compiled prior to Thursday’s results tips this year’s profit at 27.3 trillion won though several have lowered their expectations in recent months.

In addition to the supply shortage for the S6 edge model, some analysts are worried by softer demand from China and . Research firm TrendForce last week cut its forecast for 2015 global smartphone shipment growth to 8.2 percent from 11.6 percent, citing a weaker world economic outlook.

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