The Download: Samsung profits plateau

This is The Download, a weekday recap of the top technology headlines.

Samsung forecasts $13.2B operating profit in Q2, breaking quarterly record streak

Samsung Galaxy S9

Samsung has released earnings guidance of $13.2 billion in operating profit off $51.8 billion in revenue for Q2, which would represent a 0.7 percent decline in sales and an 11 percent increase in profit year on year. This would end a year-long record profit streak, with the company reporting $14 billion in profit from revenue of $54.2 billion in its last quarter.

Analysts speaking to the Financial Times and Wall Street Journal say that poor Galaxy S9 sales have weighed on Samsung’s bottom line in the second quarter. The S9 is expected to ship 31 million units this year, notching lower sales than every Samsung flagship since the Galaxy S3.

Sonos files for IPO; filing reports 19M products sold globally, net loss of $14.2M on revenue of $992.5M in year ending Sept 30, 2017


Sonos has officially filed for an initial public offering. This is the latest step to legitimacy for the speaker company that has grown into a dominant force in the speaker industry, with a name that’s grown all but synonymous with the concept of multi-room audio setups. Sonos will trade on the Nasdaq Global Select Market under the symbol “SONO.”

The filing is also a good look at some of the numbers behind Sonos’ business. As of March 31, the company reported selling 19 million products in roughly 6.9 million households around the world. That’s a statistic that speaks to one of Sonos’ biggest strengths with every customer having an average of three speakers, confirming the fact that Sonos users are likely to build an ecosystem around their setup. Sonos also touts the fact that its customers tend to listen to “80 percent more music” after buying their first Sonos product.

There was also a deeper look given into the company’s recent earnings. Sonos generated $655.7 million in revenue in the six months between October 2017 and the end of March, with a net income of $13.1 million.

However, the company’s $992.5 million in revenue in 2017 wasn’t enough to put the company in the black with a $14.2 million net loss for the fiscal year, despite being up 10 percent from 2016. Sonos also notes that 55 percent of that revenue was generated outside the United States.

Sonos also pointed out that its current business model is highly reliant on integration with other services and partners, like Spotify, Apple, and Amazon. The company noted in the filing that its partnership with Amazon that gives the Sonos One and Sonos Beam access to Alexa particularly could be revoked by Amazon with “limited notice” – meaning that Amazon could in theory end the Sonos integration if it decides that it wants less competition for its own Echo speakers (which seems at least within the realm of possibility based on Amazon’s ongoing spat with Google over Chromecast sales and YouTube on Amazon devices).

Netflix to end users’ ability to post new reviews on July 30, remove written reviews in mid-August; keeping thumbs up and down system

Netflix Los Gatos

Netflix is removing the desktop-only feature that let users read and write reviews of titles on its website. People will no longer be able to write reviews by July 30, with existing reviews being removed in mid-August.

The current thumbs up or thumbs down system will remain in place.

US Court of Appeals for DC Circuit upholds FAA’s ability to police hobbyist drone use


The US government’s ability to police hobbyist drone use was upheld by an appellate court Friday in a ruling that helps to set the stage for a series of new restrictions and requirements from aviation regulators.

The US Court of Appeals for the DC Circuit rejected arguments by drone hobbyist John Taylor, who successfully overturned the Federal Aviation Administration (FAA)’s system for registering unmanned aircraft last year.

While the three-judge panel said Congress intended to exempt some hobbyists from regulation if they weren’t creating a safety hazard, they denied Taylor’s request to invalidate the rule.

“Because the rule is within the agency’s statutory authority and is neither arbitrary nor capricious, the petition for review is denied.”

Merrick Garland; US Court of Appeals for DC Circuit judge, panel opinion author

In other news…

  • Arlo, the internet-connected security camera company that was spun off from Netgear in February, has filed for an IPO. The company filed an S-1 form with the US’ Securities and Exchange Commission (SEC) and is naturally applying for the ticker symbol “ARLO” on the New York Stock Exchange.
  • MoviePass will offer a refund for customers that had to pay out of pocket for tickets last night after a service outage. Subscribers will need to send in their ticket stubs to get the refund.
  • Niantic’s original augmented reality game Ingress is coming to Netflix in a collaboration with Fuji TV and Crafter as an anime series that will serve as an introduction to Ingress Prime. Both are scheduled to launch around October.
  • Groupon executives along with bankers representing the company have contacted several public companies over the last month to try to get interest in acquiring the daily deal company, according to two people briefed on the approaches via Recode.
  • Adidas is moving reservations for highly coveted speakers like Kanye West’s Yeezys from the Confirmed app into Adidas’ main app.



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