July 2011 Tech Earnings 1.2

A few reports after the close yesterday and before the open today:

• RVBD: RVBD will reinforce the 25-30% down rule for high multiple growth companies that miss forward expectations.  RVBD also went out and purchased two companies.  A few days ago I posted this about FFIV “Here is an article that says that FFIV is going to buy ALLT for $450-500M.  This is somewhat interesting because the last time FFIV bought a company for $400M is was Acopia and that did not work out well.  The question is why would FFIV want to spend ~5% of their market cap on ALLT?  I think the answer is when growth falters, buy something quick.  I could be wrong, but this assumption has proven true many times in the past.  It should all be clear when FFIV reports their results and we can get management’s view as to the market TAM and growth rates.”  RVBD saw weakness in EMEA and they knew that organic growth was not going to meet expectations so that is a good time to buy stuff.  Just the way it works.  Regarding what they purchased; Zeus could be very good for RVBD and bad for FFIV.  ADCs are going to be a virtual appliance in a virtualized world so this is a good pick up for RVBD in my opinion.  As for the calls to by the weakness, I think this is a multi quarter slowdown.  See you in 2012.

• AAPL: Wow.  As I wrote before the way to play the mobile device market was through AAPL, GOOG and QCOM.  The most interesting analyst factoid I read this morning was from Ben Reitzes at Barclays who said that iPad quarter units sold had reached 10% of the PC market units in 15 months.  In a new category class (i.e. tablets) created by AAPL, they reached 10% of quarterly PC unit volume in 15 months…that is a positive product cycle.

• VMW/EMC: Big data and virtualization are two tech themes that keep on giving

• INFN: Somewhat concerning comment from INFN last night that 10G market is competitive and they have had to provide additional discounting to protect share and win new deals.  Two of INFN’s top 5 customers were MSOs.  Is it me or does INFN look more like a cable equipment supplier?

/wrk

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