Apple: DOJ to Withdraw Court Action after Cracking iPhone, Says USA Today

The U.S. Department of Justice intends to withdraw its attempt to force Apple (AAPL) to unlock the iPhone of one of the San Bernardino, California shooters, after managing to unlock the device with the help of a third party, according to a story this evening by USA Today‘s Kevin Johnson and Jon Swartz, citing an unnamed federal law enforcement official.

Johnson and Swartz write that the help offered, by an unnamed party, “allows investigators to crack the security function without erasing contents of the iPhone.”

The FBI had earlier this month requested Apple’s help in getting the passcode lock on the phone, but was rebuffed by Apple, which cited issues of privacy and a need to preserve strong encryption. A court date for last week had been postponed at the government’s request while it tried out the third-party approach to crack the device.

Apple shares today closed down 48 cents, or half a percent, at $105.19.

Uber CEO Kalanick Tells CNBC No IPO This Year

Travis Kalanick, CEO of ride-sharing service Uber was on CNBC earlier today saying his company has enough capital to avoid an initial public offering this year.

Asked the channel’s Geoff Cutmore, “So all those salivating investment bankers who are hoping for an IPO this year they should forget about it?”

Said Kalanick,

Most definitely, and the reason why is, like look I’m an entrepreneur, I want to move as fast as I possibly can, I want to build something that endures, and we’ve raised, I don’t know the last 18 months something like, somewhere in the neck of the woods of 10 billion dollars, we’re not in need of public capital if that makes sense, but there also of course is that sort of, I call it the moral obligation with investors who put money in they need to see liquidity and of course we have employees as well who put in a lot of blood, sweat and tears to make Uber successful, and they own equity and so we have to ultimately find liquidity for all shareholders. I’m going to make sure it happens as late as possible.

Tableau: Drexel Sees Past ‘Severely Damaged Stock’ to ‘Brighter Days’

Drexel Hamilton’s Brian White today reiterates a Buy rating on shares of data visualization and analytics software maker Tableau Software (DATA), and a $75 price target, arguing that the company’s wares will “eventually become a ‘must have tool’ for information workers.”

White’s note comes the same day RBC Capital’s Matthew Hedberg defended an Outperform rating on shares of competitor Qlik Technologies (QLIK).

Of course, the two have suffered since a February 5th earnings miss and weak forecast from Tableau that sent both stocks tumbling, just a week before Qlik missed with its own earnings.

Infinera: Buy on Over-Reaction to Inphi, Says Deutsche

Deutsche Bank’s Vijay Bhagavath today reiterates a Buy rating on shares of optical networking equipment provider Infinera (INFN), and a $26 price target, after making “checks” of the sales channle for its gear that show opportunities in the data center.

In particular, Bhagavath is responding to the introduction last week of optical plug-in cards for routing equipment from Inphi (IPHI), which had some on the Street worried that such products might eat into the market for equipment from Infinera and Ciena (CIEN).

Inphi made the products in collaboration with Microsoft’s (MSFT) cloud computing business, and Microsoft says the Inphi parts are a more economical alternative for its purposes than the Infinera and Ciena offerings.

Apple Will Escape Historical Hardware Fate, Says UBS

UBS’s Steve Milunovich today asks whether Apple’s (AAPL) a “hits-driven annuity business” or a “platform” business, and concludes it’s the latter, which to him means Apple’s stock price is not getting sufficient credit for its staying power.

Milunovich, in a 25-page note, reiterates a Buy rating on Apple shares, and a $120 price target, writing that the company’s rate of users upgrading their iPhone will improve in 2017, and that the company’s platform will hold at bay “good enough” alternatives from competitors.

Will the iPhone ever grow again? is his first point, and Milunovich answers positively:

The smartphone market is maturing but not fully mature. Apple management believes there is still growth in the iPhone. Even after raising our F16 phone estimate for the SE, we expect a 2% unit decline. The question is whether there will be growth in the iPhone 7 cycle in F17. There do not appear to be new features that would prompt an accelerated upgrade as the iPhone 6 enjoyed with the two larger screen sizes. Analysts consider the 6s as marginally better—some owners are not even aware it has 3D Touch. Apple has been providing quarterly the percentage of the base as of Sep 19, 2014 that has upgraded to the 6 line (now 6 and 6s). That figure was 30% in Sep and 40% in Dec. We had used those numbers to drive our expectation of upgrades. However, we overestimated upgrades in F16 because (1) we assumed that over 70% of the base would upgrade to the 6 line by the end of F16, but that likely is high in part because used phones upgrade more slowly and some not to new phones at all, and (2) the upgrade cycle appears to be lengthening—in the US we think AT&T’s most popular plan is 30 months and Verizon’s is at least 24 months.

Pandora Drops 9%: FBR Defends Value, Axiom Sees Admission of Problems

Shares of online streaming radio pioneers Pandora Media (P) are down $1.06, or almost 10%, at $9.87, after the company this morning said founder Tim Westergren would take over as CEO replacing Brian McAndrews, effective immediately.

The replacement suggests to some on the Street today that the immediate hope for a takeover of the company by a larger media or tech firm is now less likely, hence the drop in price.

While paying homage to Westergren’s profile as a “visionary” and a “seasoned entrepreneur” and former band member and composer, the company announcement gave no reason for McAndrews’s replacement.

In fact, nothing in this very vague release suggests any change in direction for the company. McAndrews is quoted as saying the company has “put in place a robust strategy to make Pandora the go-to source for fans and artists,” and that he is “passing the baton.”

Chairman Jim Fueille remarked that Pandora “has become a stronger company under Brian’s leadership,” and that “Tim carries the vision for how Pandora can transform the music industry.”

Among Street views today, FBR & Co.’s Barton Crockett reiterates an Outperform rating, and a $16 price target, writing “We take the news of no change in strategy at face value, but also read into this CEO switch a potentially stronger commitment within Pandora to remaining independent, and also to obtaining a CEO who will be a higher profile spokesman for the company.”

Don’t give up on a takeover, though, writes Crockett:

Facebook: Evercore Sees Opportunity in ‘Dead End’ of Apple, Google App Stores

Evercore ISI’s Ken Sena today reiterates an Overweight rating on shares of Facebook (FB), and raises his price target to $150 from $140, writing that messaging applications are primed to become more and more important on the Internet, and that Facebook is “best positioned” to benefit from that.

Developers of software, writes Sena, are becoming frustrated with the dog-eat-dog market for apps, where few become big in Apple’s (AAPL) or Alphabet’s (GOOGL) Google’s mobile stores.

He charts the “dead end” for app developers on iOS and Android (click on the image to see it larger):

Apple May Some Day Pay Out 100% of Cash Flow, Says RBC

Shares of Apple (AAPL) are up 18 cents at $105.85, after RBC Capital’s Amit Daryanani today told investors to get set for an increase in the company’s capital allocation, and perhaps 100% of its cash flow paid out over time.

Daryanani, who has an Outperform rating on the shares, and a $130 price target, thinks the company can increase its capital returns, including both dividends and share buybacks, to more than $50 billion annually:

Qualcomm: Barclays Throws in the Towel on Threat of Intel in iPhone

Shares of wireless chip giant Qualcomm (QCOM) are down 75 cents, or 1.5%, at $50.11, after Barclays’s Blayne Curtis this morning cut his rating on the shares to Equal Weight from Overweight, writing that the company is likely to lose business to Intel (INTC) in Apple’s (AAPL) next iPhone, and he’s “moving to the sidelines until this transition and QCOM’s response is better understood.”

As you’ll recall, there’s been increasing speculation for weeks now that Intel has struck a deal to supply some percentage of the next iPhone, presumably an “iPhone 7,” with a “baseband” cellular modem, the brains of the wireless connection in smartphones.

Curtis, sounding disappointed, thinks he stuck with Qualcomm too long:

Qlik Surges 9%: Oracle Among Logical Bidders, Says RBC (Update)

Shares of data visualization technology maker Qlik Technologies (QLIK), which is currently the subject of an activist campaign involving Elliott Management, are up $2.38, or 9%, at $29.07, following a story out Friday afternoon from Reuters’s Liana Baker saying the company is exploring the possibility of selling itself, citing multiple unnamed sources.

The firm has hired Morgan Stanley to help with the review of possibilities, Baker writes.

RBC Capital’s Matthew Hedberg today reiterates an Outperform rating, and raises his price target to $35 from $30, writing “While we have no knowledge of a pending transaction, we believe a sale to either a strategic or private equity buyer could make sense.”

Oracle (ORCL) or IBM (IBM) could be potential bidders, he writes:

We’ve always thought the BI landscape could continue to consolidate and believe Qlik is a strategic asset and a real analytic platform play, especially following the launch of Qlik Sense last year. While traditional players such as SAP might be less interested following their acquisition of Roambi last month, we believe vendors such as IBM, ORCL or HPE could make a lot of sense as a potential acquirer. We also believe private equity could make sense given the margin profile should provide an opportunity for leverage.

Note that competitor Tableau Software (DATA) is up $1.73, or over 4%, at $44.63.

Update: This afternoon, Elliott Management increased its stake in Qlik to 10.8% from a prior 8.8%, according to Briefing.com. See the latest 13D filing from Elliott.