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Tech News: Concern Over Galaxy S4 Sales Costs Samsung Electronics $12 Billion in Market Value


Plus, nine tech companies deny they grant the government "direct access" to their servers, Facebook has a new tool for analyzing massive amounts of data, and the Kindle debuts in China.

Concerns About Sales of Galaxy S4 Bring Samsung Electronics Stock Lower

Just yesterday I wrote in this tech news column about Samsung Electronics (OTCMKTS:SSNLF) taking first place in sales with its new Galaxy S4 at Verizon Communications Inc. (NYSE:VZ), Sprint Nextel Corporation (NYSE:S), and T-Mobile US Inc (NYSE:TMUS), three of the four major providers, with only AT&T Inc. (NYSE:T) being led by sales of the iPhone 5 (NASDAQ:AAPL). Today, however, shares of Samsung are down around 6% on the Korea Exchange (KRX) due to a series of significant analyst downgrades.

Analysts are concerned about two new stripped-down versions of the S4 that were recently introduced, suggesting that the proposition of cheaper phones gaining more market traction will threaten profit margins at Samsung. As analyst Kim Young-chan of Shinhan Investment Corp. said, "As the portion of low- to mid-range handsets is expected to increase in Samsung's overall mobile phone business, this has also sparked concerns about thinning margins and lower growth."

JPMorgan Chase was one of the major firms to downgrade Samsung, cutting its price estimate by 9.5%. Citing disappointing numbers in supply chain checks, JPMorgan lowered its expectation for 2013 Galaxy S4 shipments from 80 million to 60 million. Another problem for Samsung, according to analysts, has been the circulating rumors and expectations of a cheaper iPhone launching this year.

Samsung's 6% drop in stock price equates to a loss of $12 billion in market value.

Major Tech Companies Deny Granting Government "Direct Access" to Servers

Yesterday morning, the Internet was astir with news of the National Security Agency's court order that requires Verizon to hand over customer data, and in the afternoon, the Washington Post published a story claiming that nine leading American Internet companies allow the NSA and the FBI to directly tap into their central servers, to access data from audio and video chats, pictures, documents, emails, and connection logs (read that story here).

The paper claims it is all under a government program code-named PRISM, launched in the latter half of George W. Bush's second term as president, along with the Protect America Act in 2007 and the FISA Amendment Act of 2008, which granted immunity to private companies that would cooperate with US intelligence agencies. According to WaPo's top secret source, Microsoft Corporation (NASDAQ:MSFT) was the first PRISM partner.

The other eight companies allegedly part of PRISM are Yahoo, Inc (NASDAQ:YHOO), Google, Inc (NASDAQ:GOOG), Facebook Inc (NASDAQ:FB), PalTalk, AOL, Inc. (NYSE:AOL), Skype, YouTube, and Apple, Inc., and all reacted to the PRISM story by denying any involvement.

Said Apple spokesman Steve Dowling, "We have never heard of PRISM. We do not provide any government agency with direct access to our servers, and any government agency requesting customer data must get a court order." The WaPo story claimed that Apple held out from the PRISM program for five years after its launch before joining in 2012.

Who is right?

Presto! Facebook Unveils New Data Analysis Engine

At a developer conference yesterday, Facebook unveiled a new query engine, Presto, for analyzing its mind-boggling 250 petabits of data (one petabit is equal to 1,000 terabits, or 1,000,000,000,000,000 bits). The new engine replaces the company's Hive engine, which is only a few years old but has become outdated by the increasing demands of data analysis at the company.

As Facebook engineer Martin Traverso said, "The problem with Hive is that it's designed for batch processing. We have other tools that are faster than Hive, but they're either too limited in functionality or too simple to operate against our huge date warehouse. Over the past few months, we've been working on Presto to basically fill this gap."

Beyond enabling faster queries, the Presto engine is seven times as efficient as Hive on a CPU. As Facebook is also looking to cut down on the amount of space its analytics takes up at data centers, this efficiency allows the company to sustain high availability of data with less data duplication.

Presto can run and answer simple queries in only a few hundred milliseconds, and big, complex data queries can run in a matter of minutes. Facebook will release the engine in open source this fall.

The Kindle Is Now Available in China

As of today, both the Kindle Fire HD and the Kindle Paperwhite e-readers are available from, Inc. (NASDAQ:AMZN) in China, with the Fire HD 16GB selling for 1,499 yuan ($244), the 32GB selling for 1,799 yuan ($293), and the Papewhite selling for 849 yuan ($138).

Additionally, the Amazon e-readers will also be sold locally through retail chains Suning and Tesco Shi in major cities.

Amazon's campaign to grow its e-reader market share in China began in December 2012 when the company opened its online Kindle store in China.

Follow me on Twitter: @JoshWolonick and @Minyanville
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