Saturday, June 17, 2017, Inc. (AMZN) and Wal-Mart Stores Inc (WMT) Will Shred Costco

Costco now fights a war on two fronts - against old foes Walmart and Sam's Club, but also against Amazon, now armed with Whole Foods

Source: Atomic Taco via Flickr
Early Friday morning, e-commerce juggernaut, Inc. (NASDAQ:AMZN) announced plans to purchase Whole Foods Market, Inc. (NASDAQ:WFM) in an all-cash deal worth $13.7 billion that will also see Amazon absorb Whole Foods’ debt. And while the deal sent a number of food-related retailers lower, I see Costco Wholesale Corporation (NASDAQ:COST) as the biggest potential victim.

At least for the time being, Whole Foods’ retail stores will continue to operate under the same brand name, there won’t be any immediately noticeable differences for shoppers, and there are no plans to lay off Whole Foods workers, either.

But once the deal is complete and WFM is wholly in the Amazon fold, quite a bit is expected to change — and not just on the grocery front.

Whole Foods has struggled for quite some time with increasing same-store sales and boosting short-term profits. With Amazon’s plethora of resources behind it, WFM management should be able to more effectively work toward lifting sales figures. Additionally, AMZN is in the perfect position to use its influence and global logistics network to reduce in-store costs for consumers.

There’s a reason grocers hit the floor on Friday.

Wednesday, June 07, 2017

Facebook Inc (FB) to Pull WhatsApp Off IBM Cloud Servers

Neither FB stock nor IBM stock will be affected by the transfer of WhatsApp

According to a CNBC article this afternoon, social media juggernaut Facebook Inc (NASDAQ:FB) is making arrangements to move the WhatsApp messaging service off of cloud servers hosted by International Business Machines Corp. (NYSE:IBM) and onto its own bank of data centers instead.

However, the effects of this decision will likely be minimal for both companies, and negligible for FB stock and IBM stock as well, even though those effects will be in direct opposition to one another.

Earlier today, some other news outlets reported that WhatsApp is one of IBM’s five largest cloud service customers and described the messaging service as the “poster child” for the IBM cloud.

However, an IBM representative told me this afternoon that WhatsApp is not actually one of the company’s top five clients. She said:
Contrary to what some of the stories are saying, WhatsApp is not a “top 5” cloud client at IBM – not even close. We have many multi-million and even some billion dollar cloud clients, including US Army, Wal-mart, BMW, American Airlines, Lufthansa, Emirates, Workday, Chubb, AT&T, Wanda, Etihad, Maersk and many more.
So, losing the WhatsApp account could have a negative impact on IBM’s bottom line, but considering that list of other cloud clients it’s likely to be almost insignificant, at least from a financial perspective.

Facebook, on the other hand, stands to gain a bit from this decision. Apparently, “Facebook was spending nearly $2 million per month on the IBM cloud,” according to an unnamed source for CNBC.

That means once the transition to FB’s own cloud servers is complete, the company could realize as much as $24 million per year in savings (not considering, of course, the potential costs associated with maintaining the WhatsApp data on Facebook-owned servers).

International Business Machines Corp. (IBM) Leads the Silicon Race

IBM stock may be slow to respond, but it also has a healthy dividend

Source: Connie Zhou/IBM
International Business Machines Corp. (NYSE:IBM) announced Monday that its research department has successfully developed the world’s first ever 5-nanometer chip. What does that mean, though? describes it like this: “In case you’re wondering how small that is in real terms, a nanometer is one billionth of a meter. A single blood cell is 7,000 nanometres wide.”
So, for the non-geeks, we’re talking about the tiniest microscopic chip ever — “a 5-nanometer device is just a few atoms thick.” What’s more, this development has made it possible for IBM to jam more than 30 billion transistors onto a single piece of silicon the size of your fingernail. If you’re unfamiliar with the inner workings of electronic circuitry, transistors are essentially on-of switches.

The announcement was made at the 2017 Symposia on VLSI Technology and Circuits conference in Kyoto, where IBM presented its groundbreaking wafer and explained that it can deliver performance enhancements of more than 40% alongside a 75% reduction in power usage. IBM said:
“Let that sink in while reading this article on a mobile device with 10 percent power left: 5nm chips would give you hours, not minutes, before needing to recharge. A future 5nm-chip-powered mobile device will last days longer than what’s in your hand right now.”
Developers went on to explain in excruciating detail the methodology used to create IBM’s 5nm chips, and how significantly it differs from the current 10nm processes. If you really want to know, head over to IBM’s announcement post on the company’s THINK Blog. Unfortunately, it’s a bit too comprehensive for me and my eyes started to glaze over as I read about nodes and FinFET transistors and silicon nanosheets.

What I was able to take away from IBM’s announcement post is that its 5nm chips are expected to be available within the next three-to-five years.