RF Micro Devices

Apple iPhone 3GS, Motorola Milestone and LG GW60

Apple iPhone 3GS, Motorola Milestone and LG GW60 (Photo credit: Wikipedia)

Target: US$7.50

RF Micro Devices is a leading supplier of power amplifiers, front end modules and other RF components for mobile devices (handsets, smartphones, tablets) and communications infrastructure.

Investment recommendation:

We believe RFMD is well positioned to deliver strong growth in C2013/14 driven by share gains in flagship LTE smartphone platforms including Samsung, Nokia, BlackBerry, and Apple. Further, given RFMD’s strong position in mid- and low-tier smartphones driven by its broad GaAs- and CMOS-based portfolio, we believe RFMD is well positioned to benefit from elastic smartphone demand in emerging markets including China.

Overall, we believe RFMD  should grow faster than the RFIC market in F2014/15 and reduced costs due to facilities management, improved fab capacity utilization, and redesigned CMOS products should drive margin leverage. We reiterate our BUY rating and $7.50 price target.
Investment highlights
 Given RFMD’s improved LTE portfolio including Phenom PAs and antenna switching solutions, we believe RFMD is well positioned to gain content share in flagship smartphone platforms including the Samsung Galaxy S4, Nokia Lumia and Asha series, BlackBerry Z10 and Q10, and potentially Apple’s next generation iPhone programs.
In addition, we believe RFMD is less vulnerable to softer near-term iPhone sales where RFMD’s competitors have greater exposure.
 Further, our market analysis indicates ramping sales of affordable 3G smartphones from Chinese OEMs powered by Qualcomm QRD, MediaTek, and Spreadtrum turnkey solutions, and we believe RFMD has strong share, particularly in TD-SCDMA smartphones.
 Finally, we believe the closure/sale of RFMD’s UK switch facility, increased utilization at the Greensboro, NC production facility, and the transition Amalfi CMOS products to lower-cost designs should expand gross margin and drive leverage from increased sales. In fact, we believe management’s target of 300-400bps gross margin improvement exiting F2014 is achievable given these initiatives.
 We maintain our above-consensus F2014/15 pro forma EPS estimates of $0.43 and $0.68, respectively.

Our $7.50 price target is based on shares trading at roughly 11x our F2015 pro forma EPS estimate.

Apple’s Stock Looks Cheap ( Part 2)

Apple Inc.  New Headquarters

Apple Inc. New Headquarters (Photo credit: MarkGregory007)

( Read with Monday post)

Apple stock has tanked 35% from its all-time high, and now sits at $450.

If things go badly for Apple over the next several years, the stock could fall a lot farther from here.

But if things go even moderately well, the stock should deliver a compelling return.


Because, at $450, the stock looks cheap.

At $450, Apple stock is trading at 10X trailing earnings per share.

For a company that is still expected to grow, albeit at a much reduced rate, that’s an attractive valuation.

Importantly, Apple also has $135 billion of cash and no debt. Much of this cash is available to be returned to shareholders in the form of stock buybacks and, possibly, dividend increases. So it’s worth considering Apple’s market value and multiple excluding this cash.

Excluding its cash, Apple’s business is now valued at about $300 billion, or 2X revenue. Apple’s business currently earns about $40 billion a year. So Apple’s business is valued at about 7-times earnings.

That’s an even more attractive valuation. Even when you consider that Apple’s earnings are now declining.

Think about it this way.

If you spent $425 billion to buy Apple today–the whole company, not some shares of stock–you would be able to immediately pocket the $135 billion of Apple’s cash. You would then own a business that spits out about $40 billion of cash per year. Assuming the business maintains close to this level of earnings, you would get the remaining ~$300 billion of your purchase price back in about 7-10 years. You would then own all of Apple and its future earnings “for free.”

Even if Apple’s earnings shrink over the next few years–which I actually think is likely (Apple’s net income in the next quarter is expected to be down a startling 20% from last year)–it would only take 10-15 years for you to get your money back.

If Apple’s earnings grew instead of stayed flat, meanwhile–which isn’t inconceivable–you would get your money back even faster than 7 years.

In other words, unless Apple’s earnings really tank, and stay down, you will have bought a good company at a reasonable price.

Now, you are not going to be buying all of Apple anytime soon, so you can only think about the description above theoretically. But here is a more likely scenario.

A more likely scenario is that Apple’s earnings will stay flat or drop over the next several years, and Apple will start to get even more serious about returning some of its massive cash pile to investors.

To reiterate: Apple has ~$135 billion of cash.

And it is currently generating more cash at a rate of about ~$40 billion per year.

Apple has no idea what to do with this money.

No company needs $135 billion of cash.

In the past, Apple has demonstrated that it is not stupid enough to make huge, bad acquisitions (at least so far). So one can hope that Apple will not be stupid enough to make such acquisitions going forward.

So that leaves two other ways to use the cash mountain that Apple continues to pile up and doesn’t know what to do with:

Right now, Apple pays a ~$10 annual dividend. With the stock at $450, that’s about a 2.5% yield.

Paying this dividend costs Apple about $10 billion of cash per year.

Apple could easily afford to double this dividend to ~$20 per year.

That would create a 5% yield, which is an excellent yield. It’s also a much higher yield than almost every other stock in the market pays. And even this would only consume $20 billion a year.

And Apple could also easily afford to spend another $20 billion a year buying back its own stock. At $450 a share, this would shrink the share base by about 5% per year. So Apple’s earnings would be split up over fewer shares.

If Apple keeps earning $40 billion a year, and it returns $40 billion a year to shareholders, its cash balance will stay at ~$135 billion, which, again, is vastly more cash than it needs.

Apple could use $50-$100 billion of that cash to buy back stock, and that would shrink the share base even further.

All of which is to say, Apple has multiple levers at its disposal to return cash to shareholders and boost earnings per share irrespective of the business. And the business itself looks cheap relative to its current earnings stream.

Now, I am not suggesting that Apple’s stock is suddenly going to rocket back to $700. For that to happen, Apple would have to release another product that is a quantum leap over the competition, and it would have to sell hundreds of millions of units of this product before its competitors caught up. (As has happened with the iPhone).

I am also not suggesting that Apple’s stock won’t go lower from here. It may very well go lower from here. In fact, it may go lower and stay lower–forever.

As I described a few days before Apple missed Q4 expectations and the stock crashed below $500, Apple could be in the beginning stages of the same sort of implosion that it experienced in the 1990s–the same sort of implosion that has claimed Research In Motion, Palm, Nokia, Yahoo, AOL, Cisco, and dozens of other tech giants over the years. The stocks of these companies are trading at mere fractions of the highs they hit back when they were “must-own” stocks, barring miracles, they will never trade at those highs again. Apple is certainly not immune from this fate. And anyone who still thinks it is is not facing up to the reality of the situation.

But, Apple is also still a good company. And it has good products in fast-growing markets–smartphones and tablets. So if it can merely remain a good company, and keep pace with the competition (again, no guarantees), and if it begins to return even more of its vast cash mountain to shareholders, it should be able to maintain strong earnings per share, at least for a while.

And if Apple can do that, the stock doesn’t just look cheap. It is cheap.

As a reminder, no one knows what is going to happen to Apple over the next few years, including the folks at Apple. So don’t hallucinate that there’s some guru somewhere who can tell you. All of these scenarios are possible, including the “train-wreck” one. Stock prices represent collective guesses about what will happen in the future, and no one knows for sure what the future holds.

One final caveat…

Most of the folks who bought Apple stock over the past 5 years bought it because they considered it a “growth” stock, not a “value” stock. The scenario I described above is very much a “value” stock scenario. If Apple’s earnings do decline over the next couple of years, the “growth” investors who bought Apple’s stock will jettison it, and the “value” investors will have to buy it. This process will take time. So even if Apple does end up delivering a compelling return over the next few years, this “turnaround” will likely take a while.


Español: Telefono Inteligente Samsung I617 BLA...

Español: Telefono Inteligente Samsung I617 BLACKJACK (Photo credit: Wikipedia)

iShares SouthKorea ETF

(EWY : NYSE : US$59.74

Samsung said its Q4 profit increased by 75.6% to a record 7.04 trillion won ($6.6 billion) driven by strong smartphone and memory chip sales.

For the full year, it logged a net profit of 23.8 trillion won with revenue and operating income reaching 201.1 trillion won and 29.05 trillion won respectively. Management cautioned that the “furious growth spurt” in the global smartphone market in 2012 would be “pacified” this year by intensifying price competition compounded by an onslaught of new products.


It said, “In the first quarter, demand for smartphones in developed countries is expected to decelerate.” The company did not provide figures for quarterly smartphone shipments; however analysts estimate the company sold 63 million smartphones on total handset sales of 110.5 million units. For this interested in gaining exposure to Samsung in North American markets, check out the iShares MSCI South Korea Index Fund which has more than 20% of its
assets invested in Samsung.

Apple Cuts Orders for iPhone 5 Parts On Weak Demand

Monday, Monday...

Monday, Monday… (Photo credit: practicalowl)

Apple Inc has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand, the Nikkei and The Wall Street Journal reported on Monday, in a further sign the U.S. firm is losing ground to Asian smartphone rivals.

Shares of the Cupertino, California-based company fell more than 4% to $498.20 before the bell on Monday. They closed at $520.30 on Friday on the Nasdaq. The news also dragged shares of Apple suppliers such as Cirrus Logic Inc and Qualcomm Inc.

Apple has asked Japan Display Inc, Sharp Corp and South Korea’s LG Display Co Ltd to roughly halve supplies of LCD panels from an initial plan for about 65 million screens in January-March, the Japanese daily said, citing people familiar with the situation, adding the U.S. firm also cut orders for other iPhone components.

The move, if confirmed, would tally with analysts saying that sales of the new iPhone 5, which was released in September, have not been as strong as anticipated.

Apple was not immediately available for comment outside regular U.S. business hours. No one at Sharp was immediately available to comment on Monday – a national holiday in Japan – and parts suppliers to Apple in Taiwan declined to comment.

Apple has lost ground in the $200 billion plus global smartphone market to South Korean rival Samsung Electronics and smaller Chinese rivals such as Huawei Technologies Co Ltd and ZTE Corp.

Jefferies analyst Peter Misek trimmed his iPhone shipment estimates for the January-March quarter on Dec. 14, saying that the technology company had started cutting orders to suppliers to balance excess inventory.

Apple also cut its orders for memory chips for its new iPhone from its main supplier and competitor Samsung, Reuters reported in September, quoting sources with direct knowledge of the matter.

The company has been cutting back its orders from Samsung as it seeks to diversify its memory chip supply lines.


Samsung said on Monday that global sales of its flagship Galaxy S smartphones had topped 100 million since the first model was launched in May 2010. The Galaxy S3, launched last May, sold more than 40 million in seven months.

The new Galaxy S IV is widely expected to be released within months, and may have an unbreakable screen, full high-definition quality resolution boasting 440 pixels per inch, and a more powerful processor.

Samsung has overtaken Apple, helped in part by the popularity of its Galaxy Note II phone-cum-tablet, reinforcing the benefits of offering a wider range of handheld devices at most price points, while Apple rolled out just a single new smartphone last year globally, analysts have said.

Samsung is expected to increase its smartphone sales by more than a third this year, and widen its lead over Apple, according to researcher Strategy Analytics, which has forecast Samsung will sell 290 million smartphones in 2013 versus iPhone sales of 180 million.

Kim Sung-in, an analyst at Kiwoom Securities in Seoul, sees Samsung shipping 320 million smartphones this year and doubling sales of its tablets to 32 million.

Japan Display’s plant in Nomi, southwest Japan, where Apple has invested heavily, is expected to temporarily reduce output by up to 80% from October-December levels, the Nikkei reported, while Sharp’s dedicated facility for iPhone 5 LCD panels will trim production in January-February by about 40%.

© Thomson Reuters 2013

Apple : Strong iPhone Product Mix / Lower estimates

English: The logo for Apple Computer, now Appl...

English: The logo for Apple Computer, now Apple Inc.. The design of the logo started in 1977 designed by Rob Janoff with the rainbow color theme used until 1999 when Apple stopped using the rainbow color theme and used a few different color themes for the same design. (Photo credit: Wikipedia)

Investment recommendation:

We believe Apple’s industry-leading software ecosystem and its leading hardware expertise will lead to a strong product cycle for its key products. In fact, we believe Apple is well positioned for strong F2013/14 sales and earnings growth driven by new product introductions, including the recently launched iPhone 5, iPad mini, recently refreshed iPad, MacBook, and iMac line-up.

We also anticipate an earlier refresh of the iPhone in C2013 with expanding channel distribution. We reiterate our BUY rating and $750 price target.
Investment highlights
 We believe demand for the iPhone 5 was very strong during the December quarter. However, based on our analysis and monthly store surveys, we believe demand for the iPhone 4 remains very strong with the iPhone 4 more in short supply than the iPhone 5.
 We believe the strong iPhone 4 demand supports our longer-term expectations Apple will more aggressively pursue lower-priced iPhone
models to expand global growth during 2013. In fact, we believe Apple could launch a higher-end iPhone model during the June quarter versus
its more typical September/October timing.

We also believe Apple could potentially launch a lower-end iPhone focused on more price-sensitive pre-paid markets, as we believe consumers in markets such as China, Latin America and Eastern Europe would have strong demand for a more affordable iPhone.
 Due to the stronger iPhone 4 mix and higher iPhone 5 inventory levels exiting the December quarter, we have modestly lowered our iPhone
unit and ASP estimates for the remainder of F2013. This results in us lowering our F2013 EPS estimate from $51.95 to $50.25 and our F2014
estimate from $58.11 to $57.45.

Our $750 price target is based on shares trading at roughly 13x our F2014 EPS estimate.

Consumer Reports : Apple’s iPhone 5 Is The Worst Of The Top Smartphones

One of the reasons Apple’s stock has gotten clobbered lately is that many people think Apple has lost its edge in its most important product line: smartphones.

The iPhone has been such a mind-boggling success that it drives more than half of Apple’s overall profit. And for most of the past five years, Apple has had a lock on the “best smartphone in the market.”

In recent years, however, competitors have caught up with the iPhone. Some reviewers think Samsung’s new phone is superior to Apple’s latest phone. And many people expect Samsung to leap ahead when the new Galaxy S4 comes out this spring.

Another respected product reviewer, Consumer Reports, agrees with those who think Apple has lost its edge.

In fact, Consumer Reports’ conclusion is even more depressing for Apple fans.

Consumer Reports actually rates the iPhone 5 the worst of the top smartphones.

CR doesn’t spell out the reasoning for its numerical ratings (yet), but the results are still startling.

Below is the summary box of CR’s lab tests, which appears in the February issue of the magazine. The numerical ratings are close together, but they’re unequivocal.

As you can see, on AT&T and Spring, the iPhone 5 is rated behind two phones:

As you can see, on AT&T and Spring, the iPhone 5 is rated behind two phones:

* The LG Optimus G (Android)  [The what?]

* The Samsung Galaxy S III (Android)

On Verizon, meanwhile, the iPhone 5 is rated beneath at least three smartphones:

* The Motorola Droid Razr Maxx (Android, and owned by Google)

* The Motorola Droid Razr HD (Android, and owned by Google)

* The Samsung Galaxy S III (Android)

Consumer Reports iPhone 5

Consumer Reports

Not even ranked in the top 3 at Verizon? Ranked behind Google phones in addition to Samsung phones? That must feel like a bit of a slap in the face.

Apple had better be cranking on the iPhone 6…

Apple To Build Macs In America Again : CEO Tim Cook

Image representing Apple as depicted in CrunchBase

Image via CrunchBase

Bloomberg News

Apple Inc. plans to spend more than $100-million next year on building Mac computers in the U.S., shifting a small portion of manufacturing away from China, the country that has handled assembly of its products for years.

“Next year we’re going to bring some production to the U.S.,” Cook said in an interview with Bloomberg Businessweek. “This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money.”

Apple, which until the late 1990s made and assembled many products in the U.S., moved manufacturing to Asia to take advantage of the region’s lower labour costs. The planned investment makes up a sliver of Apple’s $121.3-billion in cash, and probably won’t meaningfully affect profit margins. Still, it reflects pressure on companies to create even a modest number of domestic jobs as the unemployment rate hovers near 8% and the economy rebounds from the recession that ended in 2009.

“I don’t think we have a responsibility to create a certain kind of job,” Cook said. “But I think we do have a responsibility to create jobs.”

Cook discussed the investment plans in an interview that touched on his relationship with Apple co-founder Steve Jobs, the recent dismissal of senior executives and the company’s competition with Samsung Electronics Co.

While Cook didn’t outline where the manufacturing would happen or how much would be produced in the U.S., he said the company will work with partners and that the operations would include more than just final assembly.

Shares Decline

Apple’s shares declined the most in almost four years Wednesday on concern that the company will lose ground in smartphones to Nokia Oyj in China while giving up market share to Google Inc. in tablets.

China Mobile Ltd., China’s largest wireless carrier, agreed to carry the Lumia 920T, a device based on Microsoft Corp.’s Windows Phone 8 software.

In another announcement that may have fuelled the stock’s slide, research firm IDC said Wednesday that Apple’s share of the tablet market will slip to 53.8% this year from 56.3% in 2011, while Google’s will increase.

Creating Jobs

Many of the parts that go into the iPhone and iPad already are made in the U.S. This includes the display glass, which is made in Kentucky, Cook said.

Apple also has created jobs in the mobile-software industry through the introduction of the iPhone in 2007, which fuelled an explosion in creation of applications, he said.

Besides building a new headquarters in Cupertino, California, Apple is working on a campus in Austin, Texas, Cook said. The company is building new data centers in Nevada and Oregon, while expanding an existing one in Maiden, North Carolina, he said.

Before shifting work abroad, Apple had handled manufacturing in such locations as as Elk Grove, California, near Sacramento, and Fountain, Colorado, near Colorado Springs.

Mac desktop and laptop computers — once Apple’s cornerstone — have been dwarfed by the iPhone and iPad more recently. With sales of $23.2 billion on 18.2 million units last year, Macs accounted for just 15% of total revenue. The device is currently manufactured mostly in China.

Other companies that have said they’ll shift production back to the U.S. from overseas include Caterpillar Inc. and General Electric Co. Google Inc. this year delayed a wireless media device that it had pledged to build in California.

Cook, in the interview, also addressed his recent decision to revamp Apple’s management team to improve cooperation among groups. Senior Vice President Scott Forstall, a main architect of the iPhone software that’s now on more than 400 million Apple devices, was fired in October amid complaints that he clashed with other senior executives.

Samsung Ties

“These moves take collaboration to a whole different level,” Cook said, without discussing specific executives. “We already were — to use an industry phrase that I don’t like — best of breed. But it takes us to a whole new level. So that’s what it’s all about.”

Cook also said Apple has a complicated relationship with Samsung, one of Apple’s biggest component suppliers and its chief rival in the smartphone and tablet markets.

Tech Trends That Will Make Someone Billions Of Dollars Next Year

Big Data

Big Data (Photo credit: Kevin Krejci)

The world will spend a whopping $2.1 trillion on tech in 2013

The world will spend a whopping $2.1 trillion on tech in 2013


2013 will be a make-it-or-break-it year in mobile for some vendors

2013 will be a make-it-or-break-it year in mobile for some vendors

Steve Kovach, Business Insider

When it come to mobile, 2013 will bring us these three things:

  • Mini tablets with screens less than 8 inches in size will be the rage, accounting for 60% of tablets sold.
  • The market for smartphones and tablets combined will grow by 20%.
  • 2013 will be a make-or-break year for mobile platforms. Those that don’t attract interest from at least 50% of app developers won’t survive. Google and Apple are past that threshold. Microsoft now sits at 33%. RIM is at 9%.

Big IT companies will feast on smaller cloud players

Big IT companies will feast on smaller cloud players

The software-as-a-service phenomenon really grew up in the past 12 months, with big vendors like Oracle and SAP spending billions to buy their way into the market.

IDC thinks we haven’t seen anything yet.

“There will be over $25 billion in SaaS acquisitions over the next 20 months, up from $17 billion in the past 20 months,” it says.

Some companies are too highly valued to make for easy acquisitions, like the publicly traded Salesforce.com, worth $22 billion, or the fast-growing, still-private Box at $1.2 billion. But a bunch of others could be ripe for deals: Okta, Zenoss, and ServiceMax come to mind

A lot of smaller, specialized clouds will sprout up

A lot of smaller, specialized clouds will sprout up

In 2012, a lot of new cloud tech came out that made it easier and more affordable for anyone to build a cloud.

That means that in 2013, a whole bunch of new clouds will crop up. These will serve specific industries, for instance hospitals, construction companies, banks.

Big data will get bigger

Just like 2012 was the year that mobile devices and cloud computing became the must-have things for every company, big data will be the thing everyone will use in 2013.

IDC says the big-data market will grow at an annual rate of 40%. It will hit about $5 billion in 2012, $10 billion by 2013, and $53 billion by 2017.

The data center as we know it is over

The data center as we know it is over

Meet Yellowstone, the super hero supercomputing fighting climate change


New data-center technologies that took root in 2012 will become the big thing in 2013.

These include “converged systems,” where companies buy machines that have computation, storage, networking, and software bundled together.

Another is software-defined networks, which is a new way to build networks.

These represent a tremendous opportunity for the established players like Cisco, Dell, HP, and Oracle. But they are also a big risk if they get it wrong. A whole class of startups are rising up to disrupt these guys.

Your work computer will be an ID you keep in your head

Your work computer will be an ID you keep in your head


The bring-your-own-device trend, also known as BYOD, will morph into BYID—bring-your-own-ID.

That is, your work computer will be available to you anywhere, on any device. All you have to do is properly log in.

This is the ultimate result of investments in new cloud, mobile, and data-center technologies

Samsung Ate HTC’s Lunch

Android on HTC Gene

Android on HTC Gene (Photo credit: Wikipedia)

Nov. 23

Thanks to the incredible sales of its Galaxy SIII and other Android phones, Samsungbecame a juggernaut in 2012. It now dominates smartphone market share worldwide, and its being rewarded with massive revenues and profit.

Over the past 12 months, Samsung revenues were $173 billion.

The operating income from its mobile business alone is more than $4.5 billion per quarter.

Soon, Samsung’s mobile operating income well be twice as much as Google’s overall operating income.

What’s truly incredible about this rise is that as recently as a year ago, Samsung wasn’t even the leading seller of Android phones.

Back in 2011, that was HTC.

And that’s why, even in the year of the Facebook IPO, Zynga’s collapse, and Hewlett-Packard’s $8 billion write down, you have to say that the biggest business failure of 2012 was HTC’s.

In the past year, HTC smartphone sales shrank by 36%.

HTC’s October 2012 revenues declined 19% over September 2012, and 61% from October 2011.

The weirdest thing about HTC’s decline, especially in relation to Samsung’s rise, is that, according to our phone reviewer Steve Kovach, HTC’s top-of-the-line phone, the One X, is basically as wonderful as Samsung’s flagship, the Galaxy SIII.

So what happened that HTC, leading in market share in 2011, producing phones on par with Samsung’s in 2012, could have collapsed so drastically?

What went wrong?

It seems HTC made two mistakes:

  • It didn’t spend enough on marketing. In September, Jason Mackenzie, president of global sales and marketing at HTC, told us the reason Samsung was kicking his butt was the size of his budget. He told Business Insider’s Jay Yarow: “Samsung spent four to six times more in advertising than us.” This rings true. You remember all Samsung’s ads making fun of iPhone users waiting in line. Anyway, HTC’s slogan is “quietly brilliant.” Clearly, it shouldn’t be so quiet about it.
  • HTC got pushed around by carriers. Samsung sells the Galaxy SIII on all four major carriers and some smaller ones too. HTC’s top phone, the One X, is only available on AT&T. Carriers want “exclusive” phones, and HTC caved to them on this demand.  T-Mobile sells a version of the One X, called the One S, but it’s not as good.  Sprint has a version called the One V, but it’s even worse than the One S. Verizon passed on the HTC One series altogether.

HTC could have afforded to spend more on marketing. In 2011, HTC had an impressive profit margin of 13%+.  And the decision to have an exclusive with one carrier on a phone without the brand recognition of the iPhone was probably also a mistake.

Google’s Chromebook : Review


Image representing Google Chrome as depicted i...

Image via CrunchBase

Tech blog FT

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/tech-blog/2012/10/googles-chromebook-comes-of-age/#ixzz2Ag6Q5653The launch this week of a $249 (£229) Chromebook makes Google’s vision of computing in the cloud affordable and appealing, with a thin and light machine from Samsung that is $200 cheaper than its previous model released in May.

This is the fourth version of the Chromebook I have tried and Google and Samsung appear to have finally got it right. The CR-48 prototype was too buggy and had a terrible, unusable trackpad; the first proper Chromebook in June 2011 seemed too restrictive – I felt trapped inside a browser that filled the screen; the second, released a year later, seemed a mismatch of free limited software and expensive high-spec hardware – I thought then that Google’s vision of the future appeared to be about paying more for less.

With the new Chromebook, the balance and the price are right.

This is less powerful and makes more compromises on components than its predecessor, but not so that you would notice or mind much, as everything works so well.

The screen has been reduced in size from 12.1in to 11.6in, but it is still sharp and pleasing. The construction is less classy – it is aluminium-coloured plastic. But this is a smaller, lighter machine – just 2.4lbs down from 3.3lbs, and it has more memory – 16Gb versus just 4Gb before.

The trackpad works smoothly and superbly and the keys are nicely spaced to make typing a pleasant experience – I am writing this review on it now (One bugbear remains – still no delete key, only a backspace one).

Battery life is about six hours, aided by one of Samsung’s own Arm-based processors, rather than an Intel one this time, which also makes the Chromebook run cool and silent on my lap.

Riding the Caltrain from San Francisco to Mountain View, I felt a little inferior banging away on this next to someone with a MacBook Air – before realising he would have paid four times as much.

The Chromebook turns on in a flash and web pages load quickly – it has dual-band 802.11n Wi-Fi as well as Bluetooth 3.0. There is also a USB 3.0 port, a 2.0 one, a full HDMI connection and a memory card slot. A webcam and microphones are above the screen.

The software is much the same. Google is thankfully sticking with allowing us a desktop to run the Chrome browser inside and there is the useful taskbar giving access to an increasing number of apps. I did not try them all, but the Chrome Remote Desktop Beta worked better than previously in putting the desktops of my Windows and Mac computers in a browser window and letting me control them. They looked slightly fuzzy and I could not make them go full-screen, but this can be a useful feature.

For someone who spends most of his time in one Google service or another – Gmail, Drive, Chrome browsing, Play for music and other entertainment – I would certainly slip the Chromebook into a bag on days when I am out and about and not needing to do any heavy-lifting PC work.

Where Google services are weaker – for example, Chat is still poorly designed and no match for Skype – the Chrome operating system still seems limited in not being compatible with or having available some favourite programs.

But overall the Chromebook feels like a mature product and no longer a questionable experiment on whether we are ready to live in the cloud.


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