Tech & Telecom news — Sep 7, 2018
PRODUCTS & SERVICES
Devices
As the smartphone market decelerates, Apple may be preparing to substitute the iPhone by wearables (already $10bn/yr for them) as their key growth driver, with Augmented Reality and health-tracking as catalysts. The challenge is to set design & usability as key differentials (vs. cloud services, where Apple is weaker) (Story)
An alternative view on how to solve the “iPhone deceleration” is, of course, for Apple to rely on the application & services business, with less volatile revenues than devices, and where they already have a good position. Morgan Stanley expects content and services to contribute 62% revenue growth in the next 5 years (Story)
Applications
In relation to this Apple business model shift, the EU antitrust regulators just approved their acquisition of Shazam, the leading music-recognition app, which is expected to reinforce the Apple Music product in its quest to surpass Spotify, e.g. by providing more information on consumers’ musical interests (Story)
Regulation
In her testimony at the US Senate, Facebook’s COO S Sandberg admits their mistakes in the “Russian fake news” affair during the last US election. She said that the interference from foreign agents was “completely unacceptable” and apologized for Facebook having been “too slow to spot this and too slow to act” (Story)
All these news continue affecting Facebook, even after the free fall of the stock price after the company’s last quarterly results. Shares fell nearly 3% yesterday, bringing the accumulated quarter-to-date performance to -16%, and this could be their second-worst quarter since they went public in early 2012 (Story)
HARDWARE ENABLERS
Networks
Leading tech companies like Google and Facebook continue to build their own international fiber networks infrastructure. Facebook just announced a partnership with GlobeNet to build a new 2,500Km fiber link between Brazil and Argentina, in the context of an effort to improve connectivity between US and South America (Story)
Samsung will launch a 5G version of its flagship phone for 2019, but won’t force all customers to pay for it, as they will also release a cheaper, 4G-only model. This seems to reflect that Samsung (very realistically) expects many markets not to have significant 5G coverage by next year, but wants to capture early-adopters (Story)
Components
Flash memory chips are in crisis, after fast growth driven by needs of smart devices and laptops with solid-state drives. A combination of more price competition and lower demand is hurting companies like KLA-Tencor and Micron, and even Samsung (the global leader) has delayed the buildout of a new production facility (Story)
SOFTWARE ENABLERS
Virtual assistants
AI-powered virtual assistants are fast becoming a “me-too” phenomenon, with all kinds of hardware using them as a user interface with information or services in the cloud. This is also true for BMW, which is launching its own assistant, to be run within cars in parallel with Alexa, and more focused on car-specific services (Story)
Game consoles (like cars) are another use case where it may be natural to use the voice to interact with services, as hands and screens are busy with other tasks. Consistently with this, Microsoft is now installing both its own assistant Cortana and Amazon’s Alexa in the Xbox console, as a new way to interact with it (Story)

