Say what you want about the tech sector, but it’s never boring. Any given week will keep tech investors flooded with product announcements, earnings surprises, and crazy strategy shifts that absolutely nobody saw coming.
These are three of the most shocking pieces of tech news this week.
Hurry up and wait for a better network
It’s no secret that Google Inc (NASDAQ:GOOG) wants to expand its Google Inc (NASDAQ:GOOG) Fiber high-speed networking service. The company has focused on the twin Kansas Cities for three years but stretched down to Austin, Texas, earlier this month.
But nobody expected the third territory to show up just one week later. This week, Big G added Provo, Utah, to its Fiber to-do list.
This one’s unique, because Google Inc (NASDAQ:GOOG) isn’t building a citywide fiber network from scratch. Instead, the company will take over an existing 10-year-old network run by the city. The aging infrastructure will be upgraded to gigabit speeds, and low-cost but high-bandwidth services will roll out across the city.
And it’s not all about ultra-fast speeds, either. Thanks to the pre-existing cable runs, Google Inc (NASDAQ:GOOG) offers a 5-megabit connection at no monthly cost, with a low $30 activation fee. Local cable provider Comcast Corporation (NASDAQ:CMCSA) offers a similar 6-megabit service for $50 a month. This Comcast Corporation (NASDAQ:CMCSA) plan needs to get drastically cheaper in Provo, if Comcast wants to access the low-end market here.
Danger, Will Robinson!
Alarms blared and Apple Inc. (NASDAQ:AAPL) shares fell 9.1% this week, as an important component supplier delivered weak results.
Audio-chip maker Cirrus Logic, Inc. (NASDAQ:CRUS) plunged 17% on Wednesday on a disappointing preliminary fourth-quarter report. Sales jumped 87% year over year but still fell short of analyst targets, and the company is backing out $20.7 million of high-volume products into an inventory reserve. The reason is “a decreased forecast for a high volume product as the customer migrates to one of Cirrus Logic, Inc. (NASDAQ:CRUS)’s newer components,” which sounds a lot like Apple Inc. (NASDAQ:AAPL)’s having trouble moving one of its current flagship products.
I’m thinking that the culprit is the iPhone 5, given the way Verizon Communications Inc. (NYSE:VZ) sold 2 million iPhone 5 units but also just as many previous-generation iPhone 4 and 4S handsets. It’s been that way ever since the iPhone 5 was unveiled, but that imbalance could be forgiven in earlier quarters as Apple Inc. (NASDAQ:AAPL) struggled to meet high demand with adequate supply. That excuse is off the table now, and consumers still like older and less profitable versions.