Epic Games, the developer of Fortnite, has opened up a battle with Apple and Google over the fees they charge in their app stores. Will Epic lead a revolt against policies that many developers feel are unfair? Sarah E. Needleman reports for The Wall Street Journal: Apple and Google yanked “Fortnite,” one of the world’s most popular videogames, from their app stores in an escalating battle over the fees they charge developers to distribute their software and process in-app purchases. The conflict reflects growing pushback against Apple Inc.’s AAPL +0.60% App Store … [Read more...]
First Mover Advantage Doesn’t Always Last
Slack invented the chat-based communications application category that has become a necessity in today’s work-from-home environment, but being the first to market doesn’t guarantee long-term success. Microsoft Teams is also a chat-based communications platform, and it is included in Microsoft’s Office 365 subscription service. If you get Teams free, why buy Slack? Slack apparently feels Microsoft is engaging in anti-competitive behavior by giving away Teams with Office, but it’s a weak argument that Slack should lose. For investors in Zoom, DocuSign, and other nice software products, the … [Read more...]
Is the S&P 500 a Closet Technology Index?
Tech stock exuberance has pushed the weighting of technology shares (including interactive media and internet retail) to a nearly 40% share of the S&P 500. At the height of the dotcom bubble, tech shares were only 35% of the index. Without even knowing it, index-based investors are making a major industry bet that could backfire if tech falls out of favor. For perspective, the MSCI EAFE a global non-US index has about a 10% weighting in technology shares. … [Read more...]
A Plan to “Slay” Apple
Andy Kessler explains in the WSJ's opinion section, how he would go forward in an effort to take down Apple. He writes: When Apple announced last week that it will soon replace Intel processors with its own, I had a flashback to 1993. Morgan Stanley’s technology investment banker Frank Quattrone called me in New York: “John Sculley”—CEO of Apple—“wants to meet with you Friday,” he said. It was Thursday morning. “About what?” I asked. “I don’t know, do your virtual thing.” I booked the 9 p.m. to San Francisco and the redeye home. Meanwhile, I was on the phone all day with the banking team … [Read more...]
Why Is This Professor so Terrified of Low Cost Online University?
Michael D. Smith, a professor at Carnegie Mellon University, shares in The Atlantic, why he is both afraid and invigorated by America's recent experiment with online learning. He writes: I need no convincing of the value of campus life and in-classroom education. I recognize that online platforms can’t perfectly replace what we deliver on campus. But they can fulfill key pieces of our core mission and reach many more students, of all ages and economic backgrounds, at a far lower cost. What online services lack in quality, they make up for in convenience—and as they get more popular, they’re … [Read more...]
Is World’s Biggest Stock Set for a Bust?
For all practical purposes, Apple is the world’s biggest stock. (Saudi Aramco is technically larger, but the float is small). Since year-end 2015, Apple’s sales have increased at a compounded annual rate of about 3.5%. Net income has increased at a compounded annual rate of about 1.5%. Massive stock buybacks have inflated the annual growth rate in per-share earnings to 7.9%. How has Apple’s share price performed since year-end 2015? The shares have risen at an unimaginable compounded annual rate of 31% per year. Unimaginable for a large company whose sales and earnings have grown at … [Read more...]
Facebook Still an Ad Business
Facebook usage and traffic is soaring, but the company warned business may not be booming. At its core, Facebook (and Google) is still in the advertising business. If small and large businesses are drawing down credit lines and conserving cash, the ad budget is one of the first items that will be cut. Eric Savitz reports for Barron's: In the latest indication that the market for digital advertising is struggling in the face of the rapidly spreading coronavirus pandemic, Facebook disclosed in a blog post that the social network has “seen a weakening in our ads business in countries taking … [Read more...]
Will Democrats Cripple Silicon Valley Growth Machine?
For decades Silicon Valley has been America's growth engine, but increasingly, Democratic candidates seem eager to cripple the tech industry in the name of fighting income inequality. Kiran Stacey and Kadhim Shubber report in FT: The race for the Democratic presidential nomination has fuelled trepidation in Silicon Valley, as arguments for breaking up the world’s largest tech companies gain traction among the field of candidates. Both Bernie Sanders, who won the New Hampshire primary, and his fellow progressive Elizabeth Warren, have called for a break-up of America’s largest technology … [Read more...]
Is Uber About to Be Beaten on Price in London?
An Indian car-booking service named Ola is targeting Uber's business in London. The plan is to defeat Uber on price and capture the top market share within a year. Tim Bradshaw reports for the Financial Times: Ola believes it can unseat Uber as London’s top car-booking service within a year, an executive at the Indian company has said, as the two SoftBank-backed companies prepare for battle in one of the world’s toughest transport markets. Bengaluru-based Ola will make its long-awaited debut in London on Monday, six months after obtaining a permit from Transport for London. It is hoping … [Read more...]
Apple Needs Another China
Tripp Mickle reports the troubles faced by Apple in China as a result of the outbreak of the coronavirus. He writes: Coronavirus has given new meaning to something Apple Inc. executives have been saying for years: Apple needs another China. The rapid spread of the virus and the disruption it has caused is the latest test of Apple’s dependency on the world’s most populous nation, both as a consumer market but more fundamentally as a manufacturing base for most of the iPhones, iPads and Macs sold world-wide. The outbreak prompted China to keep many factories closed after the Lunar New … [Read more...]
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