Technology Bulletin

    • Fortnite Maker Epic Games Sues Apple, Google After...
    • Aug 18, 2020
    • Apple and Alphabet's Google on Thursday removed popular video game Fortnite from their app stores for violating the companies' in-app payment guidelines... View More
      Apple and Alphabet's Google on Thursday removed popular video game Fortnite from their app stores for violating the companies' in-app payment guidelines, prompting developer Epic Games to file federal antitrust lawsuits challenging the two companies' rules. Apple and Google cited a direct payment feature rolled out on the Fortnite app earlier on Thursday as the violation. Epic sued in US court seeking no money from Apple or Google but rather injunctions that would end many of the companies' practices related to their app stores. (Gadgets 360, August 14) Ankit Malhotra's key takeaways: An epic battle indeed, magnified by the bad press Apple has gotten lately from the likes of Facebook, Spotify, Airbnb and ClassPass.   An Epic win would be a gamechanger for many developers across the community, allowing them to reroute some of the flow of cash directly to their own payment gateways – resulting in dilution of control and services revenue for Apple. 
    • Foxconn Planning for 'Inevitable' Split Between US...
    • Aug 18, 2020
    • Foxconn, the world's largest contract manufacturer and Apple's most important supplier, said nearly one-third of its production capacity is now outside ... View More
      Foxconn, the world's largest contract manufacturer and Apple's most important supplier, said nearly one-third of its production capacity is now outside of China, a figure that will likely keep growing due to the "inevitable" decoupling of Chinese and American supply chains. (Nikkei Asian Review, August 12) Brady Wang's key takeaways:  The trend to shift production outside China will continue, but key questions are by how much and how fast.  Hon Hai publicly stated it’s gone from 25% in June last year to 30% today.  Tough to put an exact figure of where we’ll end up, but if we were to look at Apple products, we can see what parts would make sense for ex-China prioritization:  iPhone: Low degree of automation makes it difficult to expand non-Chinese production quickly,  but it could meet US demand by 2021. iPad: High degree of automation and low demand in the US, so easier to expand outside China. Mac: Although production automation is higher than the iPhone, I think we’d still need to wait until 2021 to meet US demand, which is high. Apple Watch: Likely see ex-China production bases from this year. AirPods: The future design of AirPods from SMT to SiP can improve the level of production automation; some are already being ‘Assembled in Vietnam’. 
    • Here's How Micromax Co-Founder Rahul Sharma Plans ...
    • Aug 18, 2020
    • Home-bred handset maker Micromax will invest Rs 500 crore towards manufacturing and research and development (R&D) as it plots a comeback in India's sma... View More
      Home-bred handset maker Micromax will invest Rs 500 crore towards manufacturing and research and development (R&D) as it plots a comeback in India's smartphone market, backed by the government's incentive scheme…Micromax, which at its peak in 2014 rose to No. 2 in smartphones, has practically been wiped out of the market by the Chinese onslaught, which began to take shape in 2016. (Economic Times, August 14) Shilpi Jain's key takeaways: The new PLI scheme will be a big help for local brands like Micromax to compete more effectively with the Chinese on the pricing front.  We could also see more component players coming to India as other brands work to increase local contribution.  Long term, we could see a complete ecosystem of connected devices being launched.  Bigger picture, PLI could become a key driver of exports as more brands set up production bases in India.
    • Signs of Growth as Nokia Reports Surprise 2Q Profi...
    • Aug 4, 2020
    • Nokia delivered a strong improvement in Q2, with better-than-expected profitability, significant improvement in cash generation, clear indications of a return t... View More
      Nokia delivered a strong improvement in Q2, with better-than-expected profitability, significant improvement in cash generation, clear indications of a return to strength in mobile radio, and a year-on-year increase in earnings-per-share, despite the challenges of COVID-19. (Nokia Earnings, 2Q 2020) Gareth Owen's key takeaway: We believe Nokia has turned a corner and growth is returning driven predominantly by the Mobile Access business.   As the Reefshark FPGA-to-SoC chipset transition accelerates, Nokia’s RAN products are becoming more competitive and profitable.  Other positives included continued growth at the young Nokia Enterprise division, which recorded an 18% increase in revenues; Nokia announced that it now 180 private network customers. During the new few months, Nokia looks likely to benefit from the Huawei restrictions with a likely increase in market share. The company confirmed that it has received new interest from numerous MNOs, particularly in Europe. Interestingly, there are also signs that Nokia’s diversification strategy into software, IP routing and optical networking is finally beginning to pay off.  Although revenues fell at all these businesses, Nokia was awarded data center contracts by several blue-chip tech companies during the quarter, including Apple, Baidu and Tencent – surely a vote of confidence in its optical networking technologies and a good omen for the future?
    • Paypal: Second Quarter Results
    • Aug 4, 2020
    • -    Total Payment Volume (TPV) of $222 billion, growing 29% YoY -    Revenues of $5.26 billion, growing 22% YoY -   &... View More
      -    Total Payment Volume (TPV) of $222 billion, growing 29% YoY -    Revenues of $5.26 billion, growing 22% YoY -    Cash flow from operations of $2.4 billion, growing 103% YoY, with a free cash flow of $2.2 billion, growing 112% YoY. -    21.3 million Net New Active Accounts (NNAs) added; strongest quarter for NNAs in PayPal’s history (Paypal Earnings, 2Q 2020) Arushi Chawla's key takeaway: 2020 Q2 proved to the strongest quarter for PayPal. The widespread roots of PayPal have reflected its strength during government restrictions and lockdowns.   In the midst of the pandemic, the company’s stellar consumer and merchant support was considered a key success factor.  The proactive nature of the company towards collaboration/partnership and the introduction of new payment options has helped it sustain growth. These initiatives include:  Deployment of QR code technology in 28 markets globally. Entered commercial relationship with Gojek. Enabled direct deposit for Venmo users. Venmo also launched Business Profiles, a new offering that allows sole proprietors and casual sellers to have a professional presence on Venmo’s platform. Now available as a payment option within Mercado Pago’s online checkout for shoppers in Brazil and Mexico. Expanded its Visa Direct partnership globally to accelerate real-time access to funds for small businesses, consumers and partners across PayPal’s platform.
    • 3 Months of Hell: U.S. Economy Drops 32.9% in Wors...
    • Aug 4, 2020
    • The Coronavirus pandemic triggered the sharpest economic contraction in modern American history, the Commerce Department reported Thursday. Gross domestic produ... View More
      The Coronavirus pandemic triggered the sharpest economic contraction in modern American history, the Commerce Department reported Thursday. Gross domestic product — the broadest measure of economic activity — shrank at an annual rate of 32.9% in the second quarter as restaurants and retailers closed their doors in a desperate effort to slow the spread of the virus, which has killed more than 150,000 people in the U.S. The economic shock in April, May and June was more than three times as sharp as the previous record — 10% in 1958 — and nearly four times the worst quarter during the Great Recession. (NPR, July 30) Maurice Klaehne's key takeaways: We are seeing the smartphone market rebound in May, June, and even July due to pent up demand, but given how we still have millions of unemployed people and rising COVID-19 cases, the economic outlook has been dire. Re-opening the country has helped some states regain economic activity close to the levels they had in 2019, but the spikes in Texas, Florida, and California put a damper on this. In addition, July was the last month where Americans could get up to $600 in extra unemployment money. Congress is trying to work out another economic stimulus package which includes extra unemployment benefits and another round of stimulus checks, but have not come to an agreement yet. The US is heavily looking towards vaccines to help alleviate the economic impact that COVID-19 is having. Other methods such as social distancing, mask-wearing, shutdowns, all have not been successful and have even been met with federal and state opposition. No federal mask mandates with states continuing to re-open restaurants, bars, and even schools all suggest additional risks and a continued high case count. This will continue affecting smartphone sales, although as we have seen with Apple, those OEMs who offer services can still increase their revenues in these pandemic times.
    • COVID-19 Pandemic to Delay 5G Rollouts in Europe b...
    • Aug 4, 2020
    • The COVID-19 pandemic will delay the rollout of 5G networks in Europe by 12 to 18 months, according to a recent report by PwC. According to the report, Europea... View More
      The COVID-19 pandemic will delay the rollout of 5G networks in Europe by 12 to 18 months, according to a recent report by PwC. According to the report, European telcos’ investment spending over the next two years will fall by €6bn-€9bn ($7.1bn-$10.6bn). “Telcos need to act urgently to address the squeeze on their 5G investment plans. Specifically, they must review their 5G business cases and deployment timetables, given the significant growth and changing pattern of demand for network capacity that has emerged due to the COVID-19 lockdown,” PwC said. (RCR Wireless, July 31) Aman Madhok's key takeaways:  Delays bring serious risks and knock-on effects from reduced delivery of innovative services to cashflows – all of which compromise long-term 5G business cases for operators; these will likely need to be revised.   On the vendor side, expect major rethinks from these operators in terms of capex allocation. Further, many emerging technologies could also take a hit, for example, V2X, IoT and the like.  
    • BMW, Tencent Tie up to Launch Computing Centre for...
    • Jul 28, 2020
    • German automaker BMW and Chinese tech giant Tencent have teamed up to launch a computing centre for developing semi-autonomous and autonomous vehicles (AVs) in ... View More
      German automaker BMW and Chinese tech giant Tencent have teamed up to launch a computing centre for developing semi-autonomous and autonomous vehicles (AVs) in China. (Reuters) Soumen's key takeaways:  Since BMW is looking to launch its L3 AV in China in 2021, the D3 (Data Driven Development) platform will play a huge role in data collection, simulation, validation and testing. As BMW has already tied up with NavInfo in February 2020 for collecting local data in China, this partnership will give a huge boost to BMW towards starting AV pilot testing. This deal will help Tencent to reduce dependency on the gaming segment. Tencent was trying aggressively to enter this future space of the mobility market. BMW has already been working with Baidu from 2014 in China for the introduction of AVs. The automotive industry is transforming into a connected and autonomous ecosystem but none of the automakers have expertise in data and computing systems, hence they need local players to build their own ecosystem.
    • Mitsubishi Performance Hits an All-Time Low
    • Jul 28, 2020
    • The automaker sold 139,000 vehicles globally during April-June, a 53% YoY decline.  It projects an operating loss of $1.33 billion in FY21, the biggest in ... View More
      The automaker sold 139,000 vehicles globally during April-June, a 53% YoY decline.  It projects an operating loss of $1.33 billion in FY21, the biggest in the past 18 years.  (Reuters) Aman's key takeaways:  Mitsubishi has bet its growth on the ASEAN region where it is stronger than the competitors. The automaker’s sales in this region fell 70% during the period, representing 17% (down from 25%) of its global sales. Since COVID-19 came to ASEAN later than other regions, it is likely that the recovery of Mitsubishi sales will be delayed.
    • Renault Electric Car Zoe Outsells Tesla, Volkswage...
    • Jul 28, 2020
    • Renault delivered a shock in its latest sales figures to anyone who had only paid attention to Tesla’s stock chart. The French carmaker’s all-electr... View More
      Renault delivered a shock in its latest sales figures to anyone who had only paid attention to Tesla’s stock chart. The French carmaker’s all-electric Zoe out-muscled the Model 3 as Europe’s best-selling electric vehicle in the first half of the year. (The National) Fahad's key takeaways:  Renault's four-door electric hatchback Zoe bested Tesla’s Model 3, Volkswagen’s electric Golf and Nissan Motor’s Leaf to become Europe's top-selling electric vehicle.   Zoe has seen its sales increase steadily YoY. The affordable price of this subcompact, coupled with the incentives provided by French and German governments, has led to the sales of over 38,000 units in the first six months of 2020. Zoe is one of the biggest names in the electric vehicle market and has helped position Renault as a major player in the future of mobility. Since its launch in 2009, Zoe hasn't undergone major changes except for a few redesigns and upgrades. The new Zoe has a 10-inch TFT cluster and EASY LINK infotainment system with a 9.3-inch portrait screen that features real-time charging information, and Android Auto™ and Apple CarPlay™. Iconic models also include a unique seat fabric that is made from 100% recycled material. Zoe provides a comfortable drive in urban centres because of its narrow, boxy shape and manoeuvrability.  VW's long-awaited ID.3 has entered the market and PSA Group is promoting two new electric models, the Peugeot 208 and the Opel Corsa. The competition will be fierce in the second part of the year.

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