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Biz Break: Intel initiates battle for Internet of Things standards [San Jose Mercury News :: ](San Jose Mercury News (CA) Via Acquire Media NewsEdge) July 08--Today: Intel launches standards for objects that connect to the Internet, challenging Qualcomm's bid to do the same while Apple and Google traverse their own path. Also: Tech stocks slaughtered on Wall Street. The Lead: Intel challenges Qualcomm with OIC effort Qualcomm flourished by providing mobile chips while Intel remained focused on personal computers early in the 21st century, but Intel isn't waiting as long to challenge its SoCal rival in an arena many expect to generate big sales for tech companies, the Internet of Things. The Santa Clara chipmaker Tuesday launched a consortium to establish standards for connected devices, with the first round of partners including Samsung, Dell and San Jose chipmaker Atmel, among others. The group, called the Open Interconnect Consortium, wants to establish universal communications framework and open-source software that will allow diverse objects connected to the Web, from home appliances to cars to wearable devices, to communicate with one another as well as devices controlled by the owners. "The rise and ultimate success of the Internet of Things depends on the ability for devices and systems to securely and reliably interconnect and share information," Intel executive Doug Fisher said in Tuesday's news release. "This requires common frameworks, based on truly open, industry standards. Our goal in founding this new consortium is to solve the challenge of interoperable connectivity for the Internet of Things without tying the ecosystem to one company's solution." Intel's effort flies into direct competition with a similar push by Qualcomm called the AllSeen Alliance, which has landed commitments from more than 50 companies, including Cisco, LG, Microsoft, Panasonic, Sharp and Silicon Image. A Qualcomm executive compared Intel's move to the doomed fights by Internet companies to control the burgeoning Web at the end of the previous century. "It's better for us to have an industrywide shared platform than to be divided. I don't want to get to a 'Prodigy and CompuServe' of the Internet of Things," senior vice president Rob Chandhok told Reuters. Besides Cisco and Intel, Silicon Valley's largest tech companies have yet to choose sides in the fight, despite investing in the Internet of Things effort. Apple introduced its own software platform for the connected home, HomeKit, during last month's WWDC keynote, while Google is negotiating on its own to connect devices produced by Nest -- a Mountain View connected-home pioneer that Google has agreed to purchase for roughly $3.2 billion. Apple declined to comment on the standards groups Tuesday, while Google and Dell rival Hewlett-Packard did not respond to emails seeking comment. While estimates of connected devices' potential growth vary, they predict big gains: Research firm IDC predicts the Internet of Things will produce annual revenues of $9 trillion in 2020, while rival Gartner predicts a more modest $1.9 trillion in sales for that year. While Gartner's prediction is smaller, its is still more than 10 times Apple's 2013 sales total, which was a dominant leader among Silicon Valley tech companies. SV150 market report: Tech stocks flash back to Q2 plunge Intel fell 0.8 percent to $30.79 Tuesday, which seems like a gain when compared with the declines of other Silicon Valley tech firms that seemed to fall back into the same pattern as the previous quarter. After plunging early last quarter, Silicon Valley tech firms bounced back to end the quarter nearly square, though the post-IPO companies that suffered the biggest sell-offs still ended the quarter down overall. On Tuesday, which officially kicked off corporate earnings season with the arrival of Alcoa's report, the SV150 index of Silicon Valley's largest tech companies dropped 1.5 percent as the tech-heavy Nasdaq also experienced a much larger decline than broad-based indexes such as the Standard & Poor's 500. A similar pattern emerged, with 19 of the 21 SV150 companies that went public in 2012 and 2013 falling sharper than the overall index while experiencing higher-than-normal volume of shares traded: Twitter dropped 7 percent to $37.41, FireEye fell 8.6 percent to $33.46, Yelp plunged 6.7 percent to $70.71, and Splunk declined 7.3 percent to $48.01, for example. Tech companies that have experienced rapid stock increases joined in the drop, with Pandora Media declining 7.3 percent to $25.79, Netflix shedding 3.4 percent to $445.05 and LinkedIn falling 6.3 percent to $158.67. Experts believe that investors are once again cautioning against earnings reports that don't live up to the high valuations given to many Silicon Valley tech companies. "There's clearly some profit-taking in names that have done extremely well," Peter Tuz, president of Chase Investment Counsel, told Bloomberg News. "Some of the stocks have pretty lofty (price-to-earnings) ratios, so if anything does go awry with earnings or guidance, they could have bigger declines. It's just a little bit of rebalancing, which isn't atypical for the start of a new quarter." An announcement after trading closed Tuesday won't help that sentiment: Sunnyvale's Silicon Image revealed that its revenues for the second quarter would come in far lower than previous estimates; the company's stock dropped more than 14 percent in late trading. Apple couldn't avoid the weakness despite its momentum toward record share prices, declining 0.6 percent to $95.35, and Google fell 2.1 percent to $578.40. Tesla Motors declined 1.6 percent to $219.07 as an infringement claim in China followed questions about another Model S wreck. The SV150 index of Silicon Valley's largest tech companies: Down 23.02, or 1.5 percent, to 1,509.8 The tech-heavy Nasdaq composite index: Down 60.07, or 1.35 percent, to 4,391.46 The blue chip Dow Jones industrial average: Down 117.59, or 0.69 percent, to 16,906.62 And the widely watched Standard & Poor's 500 index: Down 13. ___ Sign up for the 60-Second Business Break newsletter at www.siliconvalley.com. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510. ___ (c)2014 San Jose Mercury News (San Jose, Calif.) Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com Distributed by MCT Information Services |