Information technology security major Symantec Corporation (SYMC - Analyst Report) recently disclosed that it has dissolved its partnership with China-based Huawei Technologies, as the company fears that the alliance with the Chinese company will emerge as a hindrance in obtaining United States government classified information regarding cyber threats.
The decision on Symantec’s part was taken at a correct time as the security major can reap benefits from the US government’s efforts to share more classified cyber threat information with the private sector. This incident has forced Huawei to lay off several workers at Huawei Symantec’s Silicon Valley offices this month. Moreover, the company has planned to shift its entire operation out of the United States due to increased American government oversight.
In another development, Symantec announced that its Clearwell eDiscovery Platform has been chosen by Nikon Corp. Nikon seeks to benefit from Symantec's flexible, cross-border solution to execute early case assessments and first-pass review in order to mitigate risks and reduce the overall costs of eDiscovery. Symantec's Clearwell eDiscovery Platform will help Nikon to rapidly and accurately filter, process, search and analyze data in multiple formats and languages.
Symantec has been wooing other customers by offering new services. This strategy has helped the company in securing new orders for its Internet mobile security solutions. This fact is further emphasized by Samsung Electronics’ selection of Symantec’s flagship product, Norton Mobile Security, for a 90-day complimentary subscription on its Galaxy smartphones.
The Internet security market is growing steadily and offers incremental growth opportunities. We expect the network security market to return to the pre-recession growth levels going forward.
The global network security market, described as hardware and software with functionality, which includes segments such as firewalls, VPNs, intrusion prevention and detection, and multi-purpose security known as unified threat management, are expected to generate higher revenues in the coming years and the company is well positioned to capitalize on this opportunity.
This apart, the company is gradually strengthening its position in the mobile security market. However, the uncertainty regarding PC sales is going to hit its Consumer segment this year.
Moreover, reduction in tech spending by different government and private organizations, stiff competition from McAfee -- acquired by Intel Corp. (INTC - Analyst Report) -- as well as the prevailing economic turmoil in Europe may have a dampening effect on the company’s business prospects. Symantec also provided weak guidance and we believe that this could be due to the above mentioned reasons.
Currently, Symantec has a Zacks #3 Rank, implying a short-term Hold rating.