Morning Tech Reading Mar 30

Lenovo, a Chinese company purchased the desktop and laptop business from IBM quite some time ago. The idea was to enter the worldwide market with a strong brand quickly. They did so for $1.25B. Fast forward to the present. The US government wants to purchase about 16,000 Lenovo computers. Okay, a big order, but what’s the big deal? Well, recently the U.S.-China Economic Security Review Commission has requested that Lenovo be probed into concerns about placing spy equipments into those computers. After all, the big red machine (no, not Russia anymore) is out to get the Americans.

Now, the United States appears to pride itself on competition, the free market, and capitalism. Yet when the government gets involved, it seems like all this gets thrown out the window instantly, without second thought. The Dubai ports deal was just another example of America’s recent barrier against what they apparently stand for. Read it and decide for yourself.

The Other Side of the Lenovo Spy Probe

Speaking of politics in tech business, this one comes from the corporate politics side. ATI Technologies uses ULi chipsets for its peripherals chip (South Bridge which provides things such as SATA, USB, etc). NVidia recently purchased ULi and is announcing that they will stop production of the chipsets ATI has been using. Of course, it would be awfully weird for nVidia to continue producing chipsets for a competitor, but nonetheless, it really puts the pressure on ATI to produce a good south bridge of their own, and soon.

Nvidia Accused of Pressuring ATI’s Chipset Business

On that note, ATI annouced its earnings for its second quarter. They came in quite a bit above analyst estimates, but net income dropped around 40% from the same time last year. Sales of lower margin chipsets pushed down those earnings despite a rise in overall revenue to $672.4 million. Stock’s up strongly in pre-market trading.

ATI Tech 2Q Profit Falls 40%

One stock that definitely isn’t up, but is falling in pre-market is Google. With recent worries about growth rates and earnings-per-share, Google’s stock probably didn’t need the announcement that they would be issuing another 5.3 million shares of stock. This only serves to dilute the stock, infusing more equity into the market, which in turn causes everyone else’s stock to be worth slightly less, assuming earnings and such remain the same. It’ll be interesting to see if Google can still hit its earnings estimates even with this sale to the market (worth around $2.1 billion!). The stock’s down around $10 pre-market.

Google Plans to Sell Another 5.3M Shares

[tags]Lenovo, US Government, nVidia, ATI, Google, business[/tags]


2 Replies to “Morning Tech Reading Mar 30”

  1. Pretty soon the US is gonna put a ban on all chinese imports….ie. everything that is imported:P After that comes the ban on the people. Let’s see that means deporting 2.4 million according to the 2000 census. hmmmmmmm…i wouldnt put it past bush though.

  2. You know there was a saying that went, ‘if you can’t beat’em, join’em’. It seems like the administration still thinks they can strong arm everyone. Man, and if they impose that 27.5% levy on all Chinese imports, they’re going to be committing economic suicide. Oh, it’ll hurt the Chinese, but it’ll hurt the US so much more. Think about how much stuff has that little Made in China tag. And, so much stuff that is made there but assembled in the States would get screwed too.

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