5 Companies That Had A Rough Week

The Week Ending Feb. 2

Topping this week's roundup of those having a rough week is Apple, which is reported to be under investigation by two U.S. federal agencies over its controversial move to throttle the performance of older iPhones to extend battery life.

Also making the list this week are VMware and its shareholders after the company lost about $10 billion in market value over reports of a possible reverse merger with Dell; Intel partners who are dealing with a shortage of Broadwell Xeon processors; Huawei for its reported loss of a smartphone distribution deal with Verizon that the Chinese company was counting on for U.S. expansion; and Cisco for having to scramble to fix a vulnerability that exposed a number of its security and networking products.

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.

Apple Reportedly Under Investigation By Federal Agencies Over iPhone Throttling

The controversy over Apple's performance throttling on older iPhones isn't going away. This week published reports said that two U.S. federal government agencies, the Department of Justice and the Securities and Exchange Commission, are investigating whether Apple broke any securities laws in its handling of the performance throttling issue.

Last month Apple CEO Tim Cook acknowledged that his company lacked transparency when communicating about a performance-reducing update to iOS. The measures were intended to slow the operations of older iPhone models to reduce the impact on rechargeable batteries.

Apple came under fire from consumers when the company's actions came to light in December.

The DOJ and SEC have reportedly asked Apple to provide information about its actions surrounding the issue.

VMware Loses Nearly $10 Billion In Market Value Following Reverse Merger Report

It was a tough week for VMware and its shareholders. VMware stock plunged more than $25 per share or nearly 17 percent in trading Monday after reports of a possible "reverse merger" that would see VMware acquire the larger Dell to pave the way for Dell to go public without filing for an IPO.

On Friday the company confirmed that the Dell Technologies board is considering such a plan.

The report shook investors and the drop in its share price resulted in VMware's market capitalization falling to $50.90 billion on Monday from $60.47 billion at the close of trading Jan. 26. (By Friday of this week VMware's stock had rebounded slightly, trading in the range of $126-$127 per share with a market capitalization of just over $51 billion.)

Dell owns 80 percent of VMware, meaning that it too was a loser in VMware's falling stock price.

Dell is wrestling with new interest tax deduction limitations that were part of the Tax Cuts and Jobs Act passed by Congress in December. Dell has $50 billion in debt on its balance sheet after it acquired EMC for $67 billion in 2016.

Intel Partners Face Shortage Of Broadwell Xeon Processors

System builders and other Intel Partners are discovering that Broadwell Xeon server CPU processors are in extremely short supply. Low- to mid-range Xeons, scaling from Intel’s E5-2609V4 models to the E5-2650V4 models, are particularly impacted.

Distributors currently have no stocks of the processors and partners say they have been told they don’t expect to have any until the end of March or even until April, a custom system builder told CRN.

Word is that Intel believed system manufacturers would have moved on from Broadwell to the Scalable Processor series by now and did not anticipate that demand for the older chips would remain so high.

Huawei Reportedly Loses Smartphone Distribution Deal With Verizon

Efforts by the Chinese tech giant Huawei to expand within the U.S. apparently encountered another obstacle this week when telecom carrier Verizon reportedly backed out of a deal to sell mobile phones manufactured by Huawei in the U.S.

Verizon reportedly backed away from the deal because of fears from U.S. government agencies and lawmakers around Huawei's suspected ties to Chinese espionage efforts, an issue that has plagued the company and its efforts to expand within the U.S. for years.

Huawei was said to be counting on the Verizon partnership to sell its Mate 10 Pro smartphone in the U.S. in competition against Apple's iPhone and Samsung mobile phones.

Cisco Issues "Critical" Firewall Security Vulnerability Alert For VPN Devices

Cisco Systems had to scramble this week after it identified a critical software security vulnerability in several of its firewalls, switches, routers and security software that could let cyber-attackers into VPN devices.

With the IT industry on edge because of the fallout of the Specter and Meltdown exploits, IT vendors are under even more pressure to quickly correct vulnerabilities in hardware and software systems.

Cisco said the vulnerability is in the Secure Sockets Layer VPN functionality of the vendor's Cisco Adaptive Security Appliance software and could allow an unauthenticated, remote attacker to cause a reload of the affected system or execute code remotely.

The company issued a list of 10 affected Cisco products including its 55 Series Adaptive Security Appliances, the ASA 1000v Cloud Firewall and the company’s Firepower Threat Defense software.

Cisco developed and issued free software updates to solve the problem, but said there were no workarounds to fix the vulnerability.