Netflix may be getting out of the DVD business sooner that previously predicted, if Wednesday’s Q4 financial results are any indicator. The company now has close to twice as many streaming subscribers as DVD subscribers in the U.S., and it lost some 2.76 million DVD subscribers in the last quarter alone.

Netflix had 21.76 million subscribers at the end of Q4, which is 220,000 more than in the previous quarter. Internationally, it now has 1.86 million subscribers. The number of DVD subscribers shrunk to 11.17 million, down from 13.93 million in Q3. That means that for the first time ever, streaming plans outperform DVD rentals by a ratio of close to 2:1.

The good news for Netflix is that even with its steep decline in DVD rentals, the overall number of customers is growing again. Netflix lost 810,000 U.S. subscribers in Q3 as a result of its unsuccessful attempts to spin off the DVD business into a separate company, as well as a price hike earlier in 2011. In Q4, that combined  subscriber number once again grew by 610,000.

Netflix executives have long said that they see the company primarily as a streaming video provider, with DVDs being part of a legacy business that will decline over time. However, the accelerated rate of decline could spell trouble for Netflix’s bottom line: The company has been using the shrinking but very profitable DVD rentals to finance its international expansion, which it put on hold until international profitability returns after launching in the U.K. and Ireland in January. With DVD customers canceling by the millions, that could now be further away than previously estimated.

Netflix CEO Reed Hastings wrote in a letter to shareholders (PDF) that he expects DVD subscription cancelations to level off this year, with an expected 1.5 million customers saying good-bye to the iconic red envelopes in Q1 of 2012. From the letter:

“While contribution profit from domestic streaming will grow sequentially, it will not be sufficient to offset the sequential decline in DVD profits (~ million), and the sequential increase in our international losses (~ million), as well as cover our global G&A and Technology & Development costs. As a result, we expect modest quarterly losses, as well as losses for the calendar year.”

In other words: Netflix won’t enter any other territories in 2012, and might have to work on making more money with streaming if it wants to keep expanding in the future. Because DVDs may not be around for much longer.

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Things are looking up at Clearwire, its Q4 revenue came in just over Wall Street’s estimates at 2 million, split between 8 million retail and 4 million wholesale — with the latter figure up 20 percent over the last quarter. It pointed a finger at increased smartphone usage and slashed operating costs (spending only million) as the reason for the bump. With this being Clearwire, it’s still in the business doldrums, relying on handouts from Sprint to keep it going. It’s planning to flog off around 0 million of debt to “qualified investors” as a way to ensure sufficient funding for the forthcoming LTE rollout. If you’re interested in this sort of thing, you can read the full breakdown after the interval, presumably storming around pretending that you’re Gordon Gekko.

Continue reading Clearwire Q4: revenues up, costs down, LTE expensive

Clearwire Q4: revenues up, costs down, LTE expensive originally appeared on Engadget on Tue, 24 Jan 2012 19:53:00 EDT. Please see our terms for use of feeds.

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According to ComScore, out of the 82.2 million people in the US with a smartphone (up ten percent from last quarter), Android came in first as the biggest platform yet again, capturing a whopping 41.8 percent of the market like a boss. In a not-so-close second, Apple was able to snag 27 percent, followed by RIM in the third place spot with 21.7 percent — down 4 percentage points from last quarter. Pulling up the rear is Microsoft with 5.7 percent, and lastly Symbian with a grim 1.9 percent — both down when compared to the previous three months. As far as US hardware manufacturers goes, Samsung is still on top with 25.5 percent of the market, while LG got 20.9 percent and finally Motorola with 14.1 percent, down 1.5 percentage points from before. Apple was able to snag some standing in the OEM space with a 9.5 percent share, while BlackBerry-maker RIM only captured 7.6 percent. As the battle wages on, looks like Androids, iPhones, and BlackBerrys (oh my) are still on top — at least for this quarter. Check out the PR after the break for the full scorecard.

Continue reading ComScore calls Android top dog, Apple pulls further ahead of RIM

ComScore calls Android top dog, Apple pulls further ahead of RIM originally appeared on Engadget on Wed, 31 Aug 2011 04:09:00 EDT. Please see our terms for use of feeds.

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The next Android vs iOS battle is shaping up between two challengers in the U.S.: The upcoming Samsung Galaxy S 2 and anticipated next iPhone model. What makes this interesting is that comparisons between the two platforms are generally looked upon differently, depending on which platform you support.

Apple’s iOS handset sales are mainly generated from from one new model per year, although older models also contribute. Android sales are derived from a vast number of different phones using Google’s platform.

The U.S. is poised, however, to see these two companies go head to head. It’s expected that Apple will announce and release a new iPhone in August or September. Samsung introduced the Galaxy S 2 in May, spreading availability to many countries outside of the U.S. and claims 5 million sales in just 85 days.

Several U.S. versions of the Galaxy S 2, varying by carrier, are likely to launch within the next month or two, including at least one for AT&T that may have a hardware keyboard. AT&T accounted for more than 17 percent of all iPhone sales last quarter, so that particular battleground should prove interesting.

While all U.S. carriers have embraced Android, AT&T publicly renewed its commitment to Google’s platform this week. The second largest carrier said it will offer Android 2.3, also known as Gingerbread, for all Android handsets it launched in 2011, starting with the Motorola Atrix 4G. Five other handsets already earned a spot on the upgrade list, including the Samsung Captivate, which is last year’s Galaxy S model for AT&T; an then-impressive alternative to Apple’s iPhone.

Also impressive are this year’s Android phones; many of which bring either a faster processor, improved user interface, or high-quality camera sensor. T-Mobile’s myTouch 4G Slide gains all three of these features and impressed me over a two-week review period.

At 6.5 ounces, the phone is heavier than most smartphones, but the main reason is due to the 4-row QWERTY keyboard that hides under the 3.7-inch display. A 1.2 GHz dual-core chip keeps the phone moving along quickly and the wide aperture 8 megapixel camera is paired with smart software that supports a fast burst mode, HDR images and wide panoramic views.

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AT&T’s version of the hotly anticipated Samsung Galaxy S II smartphone appears to have a slide-out hardware keyboard, something we’ll never likely see on Apple’s iPhone. The reported keyboard is shown on the Boy Genius Report site, which has an image of what clearly resembles a Samsung smartphone running Google Android 2.3.4. The four-row keypad is supplemented by two tall, thin buttons on the left and right; each doubles as a button for the four capacitive touch buttons on the display for search, home, menu and back functions. AT&T still sells the lion’s share of iPhones, but a high-powered Android handset with a hardware keyboard could sway some away from Apple.

I have no doubt that when Apple introduces the next iPhone model, AT&T will still continue to sell millions of the device. Surprisingly, even though the iPhone is on many networks around the world and available on Verizon since February, AT&T appears to have sold 17.1 percent of all iPhones last quarter. Apple reported sales of 20.34 million iPhones and just days later AT&T claimed 3.6 million iPhone activations in the same time period. That’s a big number in relation to all iPhones sold.

As strong as those numbers are, there’s still money being left on the table, because no matter how good the software keyboard is on the iPhone, there are consumers that simply won’t consider it due to the lack of a hardware keyboard. I’ve heard this complaint time and again in various conversations and it comes more from women in my experience. It turns out that women with long fingernails — again, based on my conversations — can’t easily use a capacitive touchscreen keyboard. That’s just one example of many I hear; talk to a long-time BlackBerry user and you’re likely to hear a similar aversion to touchscreen keyboards.

So while the Samsung Galaxy S II is no iPhone when it comes to software or ecosystem, it may drive sales on AT&T’s network for those seeking the touchscreen smartphone experience but with the addition of a hardware keypad. The Galaxy S II is certainly powerful enough to please with Samsung’s 1.2 GHz dual-core processor; early benchmarks from the overseas model show it to run rings around most other smartphones. A Super AMOLED Plus display brings vibrant colors that draw the eye. And even with a peppy processor, early reviews show the phone capable of lasting a full day on a single charge. It’s no wonder the Galaxy S II is the company’s fastest selling smartphone with 3 million sales in 55 days.

Hardware keyboard aside, potential customers will still focus on iOS vs Android as a major part of their purchase decision. But if these folks consider the two platforms to be “close enough” to parity, a keyboard could help Samsung move more Galaxy S II smartphones on AT&T. And given AT&T’s importance to iPhone sales, that helps Samsung as it battles Apple to become the new smartphone king.

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Amidst all of the champagne cork-popping and bubble talk in the wake of the LinkedIn IPO Thursday morning (high-five to Reid Hoffman) I’ll offer up this downer of an article: the LinkedIn IPO is bad for the cleantech industry. No, not for the future progress of green technologies in general — LinkedIn’s stock shooting up over 100 percent on the first day has nothing directly to do with how cheap solar panels can get, or if people will embrace electric cars.

But as a second bubble appears to be growing around venture capitalists investing in web companies, the generalist venture capitalists that tested the greentech waters several years ago are now fleeing, returning to investing in the web, and are also having a nasty case of envy over the returns that the consumer web companies are delivering their investors. The killer LinkedIn IPO — one of the biggest web IPOs since Google — will only increase that shift.

It’s a sentiment that we’ve pondered before (Cleantech Officially Less Cool Than Groupon). As Kevin Surace, CEO of Serious Materials, said last month during a panel at the SolarTech summit, “No one in cleantech is worth (billions). Yet you can create this small online team that creates billions of dollars in market cap [Groupon].” LinkedIn now has a market value of more than billion for what is basically a very successful website for resumes and job listings.

As I wrote earlier this week, cleantech seems like it is in a bit of a slump (I tried to put a positive lens on it: Why the Future of Greentech Needs to Sound Awesome). But it’s the reality that green technologies like next-gen biofuels, electric cars, and nuclear (post Fukushima) are crawling along. European countries (the largest market for solar) are revising their solar subsidies, kicking solar firms in the gut in the last quarter. The bad news has been piling on, from battery maker Ener1 writing down its investment in EV maker Think (EVs happening too slow), to NRG Energy writing down its investment in expanding a nuclear plant (all nuclear construction is on hold for the time being). Top that off with the fact that the funding for clean energy from the stimulus package is dwindling, there’s been no energy legislation in the U.S., and the likelihood that the Department of Energy will not get an increased energy research and development budget for several years.

It’s not a shocker that a chunk of the investors that made bets on greentech seem to be exiting. Last month Mass High Tech published an interesting article looking at 10 venture firms that made five or more new cleantech deals between 2003 and 2008, and then completely pulled back from new cleantech investments after 2008. Kleiner Perkins has reported reversed course slightly from greentech. Surace acknowledged the same thing during the SolarTech panel: “What you’ve seen in the past year is degradation in new startup funding. Venture capitalists are still doing follow-up rounds, but this space is collapsing from four to five years ago.” The bulk of the so-called almost record spending on cleantech last quarter went to capital intensive companies that needed follow-on rounds like EV-maker Fisker, and solar companies Solyndra and BrightSource.

With less venture money going into new and early stage greentech companies, the overall greentech funding from venture capitalists will likely start to dwindle. There’s only so many later stage, growth rounds that can go to already established “winners.” Private equity, government funding, corporate investors and other forms of investing will have to step in at all phases, to keep greentech entrepreneurs and startups going.

But if the second consumer Internet bubble actually happens — as the LinkedIn IPO seems to suggest — and makes enough VCs and entrepreneurs rich off the web again, those investors that got locked into a multitude of bad greentech deals can’t help but have investors remorse.

Image courtesy of Mrs Logic.

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