5 Companies That Had A Rough Week

The Week Ending April 7

Topping this week's roundup of companies that had a rough week is Cylance, which has undergone a round of layoffs.

Also making the list this week are Apple, which is being sued by an Australian regulatory agency over the "bricking" of devices with software updates; Broadcom, which saw the disclosure of a security vulnerability in its Wi-Fi chips; Canonical, which is throwing in the towel on development for the mobile version of the Ubuntu operating system; and Imagination Technologies, which is set to lose Apple as major licensee of its graphics processors.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

Cylance Hit By Round Of Layoffs

Endpoint security firm Cylance has been hit by a round of layoffs, multiple sources close to the company told CRN this week. Sources said the majority of layoffs hit the company's sales and marketing departments. Irvine, Calif.-based Cylance confirmed that employee cuts occurred, but did not offer specifics. Cylance Senior Vice President of Marketing Shaun Walsh said the moves amounted to a "small adjustment."

The Register reported layoffs at Cylance reaching 20 percent of the company's workforce, a figure that matched what sources told CRN. Cylance's Walsh said that number is a "significant exaggeration" of the cuts. Walsh added that there were a "few individuals" affected in the company's channel organization but said partners "are not going to see a material difference in our channel."

Cylance was the fastest-growing private cybersecurity company in 2015, according to the Inc. 5000, with $11.1 million in revenue in 2015 and a 7,613 percent three-year growth rate. The company has also landed a huge amount of venture capital funding, including $100 million in Series D funding in June, one of the largest by any security company last year. Sources have told CRN that the company has struggled to meet its sales expectations.

Cylance partners said they weren't concerned about the company's outlook or the layoffs, with multiple partners saying their business through the company is still booming. One partner executive attributed layoffs to "unrealistic expectations" of growth for any startup company, rather than a lack of demand for its technology.

A ustralian Regulatory Agency Sues Apple

An Australian regulatory agency this week announced a lawsuit against Apple for "bricking" devices with software updates, leaving the devices unusable, and then refusing to fix the devices.

The Australian Competition and Consumer Commission said that Apple bricked hundreds of smartphones and tablets -- between September 2014 and February 2016 -- but would not make repairs because the devices had previously been taken to third-party repair businesses. Apple had claimed that the device owners weren't eligible to have their devices restored as a result of engaging with third parties, but the Australian agency argues otherwise. Consumers’ rights to repairs under these circumstances "are not extinguished simply because a consumer has goods repaired by a third party," the agency wrote in a statement. Apple, based in Cupertino, Calif., did not immediately respond to a request for comment.

Broadcom Hit By Wi-Fi Security Flaw

This week, Broadcom saw the disclosure of a security vulnerability in its Wi-Fi chips, which hackers could potentially exploit in order to seize control of smartphones and tablets.

The vulnerability was disclosed in a blog post by a researcher for Google, Gal Beniamini, who works for the Google Project Zero cybersecurity research group. Broadcom Wi-Fi chipsets are common in major smartphones, and devices that use the affected chips include recent iPhones (between the iPhone 5 and iPhone 7) as well as recent Samsung Galaxy phones (including the Galaxy S6 and S7), according to the research. Google and Apple responded by issuing patches for the bug in Android and iOS this week.

Broadcom, co-headquartered in San Jose, Calif., and Singapore, "has been incredibly responsive and helpful," and is now "considering implementing exploit mitigations in future firmware versions," Beniamini wrote in the blog post.

Canonical Scraps Ubuntu Mobile Version

Canonical, the producer of the open-source Ubuntu operating system, this week disclosed that it's giving up on development of the Ubuntu mobile version.

The London-based company said that it's halting all work on the Ubuntu mobile platform, which can run on smartphones and tablets, in part due to "commercial constraints." Ubuntu has aimed to serve as an alternative to the dominant mobile operating systems, iOS and Android, with advantages such as the ability to provide a desktop experience when docked (Microsoft Continuum and Samsung DeX are two other examples of this idea on the market). But mobile devices running Ubuntu have not seen much success -- Canonical lists just one device available currently (the BQ Aquaris M10 Ubuntu Edition tablet), while there have been four devices available previously.

"The choice, ultimately, is to invest in the areas which are contributing to the growth of the company. Those are Ubuntu itself, for desktops, servers and VMs, our cloud infrastructure products (OpenStack and Kubernetes) our cloud operations capabilities (MAAS, LXD, Juju, BootStack), and our IoT story in snaps and Ubuntu Core," Canonical founder Mark Shuttleworth wrote in a blog post.

Apple To Cease Licensing Of Imagination Technologies Processors

British chip designer Imagination Technologies said this week that Apple plans to cease licensing of its graphics processors and instead has been developing independent graphics chips. Imagination Technologies, which has provided its PowerVR graphics processors in Apple products like the iPhone and iPad, relies on Apple licensing for about half its revenue.

The company said that Apple will discontinue using its graphics designs in devices within 15 months to two years from now. Apple, which holds an 8 percent stake in Imagination Technologies, did not respond to a request for comment.

Imagination Technologies said in a statement that it would be "extremely challenging to design a brand-new GPU architecture" without infringing on its patent rights. ’Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information," Imagination said in the statement.