Credit: Shutterstock photoLast week was replete with big announcements and rumors from Apple AAPL , Facebook FB and Microsoft MSFT dotted with lingering regulatory concerns for Google GOOGL .
Will Apple Auto Beat Google to the Market?
Wall Street has been looking for a car from both Apple and Google given that these are the two tech giants with the adequate resources. But despite the fact that both have been hiring engineers and other personnel, the auto industry hasn't taken them seriously. There are a lot of complicated logistics involved that makes it a difficult business to branch into and at the end, it doesn't even generate strong margins, this doesn't appear to be an area highly profitable tech giants would be interested in.
But Google is already testing its self-driving car, and Apple has an electric car in the works though the first iteration won't be self-driven, according to a WSJ report/rumor citing "people familiar with the matter." Google could be planning to use them for delivery, taxi services, etc. since it seems to be interested in everything. But Apple's plans aren't clear at all, especially since the demand for electric cars is uncertain.
For now, all we know is, WSJ says that Apple is tripling the headcount for Project Titan (its car project) from the current 600 to meet a 2019 deadline. Google expects to launch in 2020.
Facebook: Much Ado About VR
At the virtual reality (VR) conference in LA last week, Facebook started off by enabling 360 degree viewing on the social networking platform. It was joined by Walt Disney, GoPro, Discovery and similar others, which uploaded 360 degree videos (captured using a camera set covering all angles). This enables Facebook users to decide their angle of choice when watching these videos.
This was followed by an announcement from Samsung, which along with Occulus (acquired by Facebook in 2014 for $2 billion) announced a new Gear VR headset at $99 to work with all of Samsung's latest devices. But what really made this announcement exciting was partnerships with Twentieth Century Fox and Lions Gate Entertainment to bring popular content like Hunger Games and Pulp Fiction to the Gear headset. Netflix already launched an app with Hulu and Vimeo slated for later this year as is Microsoft's Minecraft. Phew!
Office 2016: Brave New World or Old Wine in New Bottles?
On the face of it, nothing much has changed because Word and Excel still work like a dream. But Microsoft has doubled down on collaboration this time and its assistant is right there to execute your command.
So in the Excel you can easily locate what you need by typing into the "Tell me" box at the top. But Microsoft is determined to make things cloud-dependent, which is why it doesn't give you a full-service offline version. The online version eliminates the need to send emails (since the spreadsheet when saved in the cloud may be shared with the click of a button according to the preferences you set). With Word it's done more or less the same thing except that there's greater context to searches (basically Bing integration). Clicking on "Define" describes the word and clicking on "Smart Lookup" brings context from Bing images and web search that can be copy pasted into the text itself.
The best part is, it is truly cross platform and Skype-integrated enabling you to talk over any item while you're both looking at it and irrespective of whether you're using iOS, Android or Windows. Google offers some of these things, but it doesn't have Skype, nor Microsoft's installed base. This could be huge. Certainly no old wine.
France Will Enforce RTBF Laws
Google is standing by its policy of "respectfully disagreeing" with French authorities about the Frenchman's right to have desired pages removed permanently from all Google properties and not only those with European extensions. Publishers of removed articles have reportedly objected to their stories being removed in some cases and the Index on Censorship has earlier said that asking a search engine to remove links was "akin to marching into a library and forcing it to pulp books."
The exact problem is not very clear from media reports, i.e., whether the French authority is objecting to the article being seen by anyone all over the world or by French/European citizens only. In the latter case, there might be a technological solution to the problem. Otherwise, it's just a question of strong-arming a commercial operator by threatening to penalize it financially.
The right to be forgotten opposes the right to information, but is there a middle line? And what might that be? And who is to determine what is "inadequate, irrelevant, no longer relevant, excessive and not in the public interest" and with respect to who? Because that is what Google is expected to determine when processing requests for the "right to be forgotten."
Other stories you might have missed -
Corporate
Washington Post Joins Facebook Instant Articles : Facebook scored a big win last week when the Washington Post agreed to publish its 1,200+ articles through Facebook Instant Articles. The social networking company says that load times are faster on the service, which leads to more users reading the articles. The more they read, the more they are likely to see the ads the publishers (or Facebook) serve, increasing the social network's importance to publishers.
WPP Warns Against Fake Ad Views : Google has its plate very full with WPP, one of the largest ad agencies accusing it of charging companies for views by robots. WPP CEO Sir Martin Sorrell spoke with reference to a report by four independent firms that created two bots to view a YouTube video 150x. Unfortunately for Google, 25 of those views were taken as genuine by its system.
While Google has invested heavily to create the best bot detection system available currently, Sorrell said that companies like Google and Facebook needed to do more if they wanted to stop advertisers going back to traditional channels like TV. To make matters worse, advertisers won a petition to sue the company as a group, meaning it may now have to deal with class action lawsuits.
Google Play Suffers Chinese Cyberattack : Chinese hackers are having a field day. Just a few days after attacking Apple's App Store, they successfully circumvented Google's Play Store protections last week. CheckPoint's Michael Shaulov said that it was an extremely sophisticated infiltration (now patched) and anywhere between 200K to a million Android devices may have been infected. The goal appears to have been the placement of ads inside a "brain test" app to generate ad revenue and gather information. The hackers used Alibaba analytics and Baidu tools and the domain names used were traced to China.
Groupon to Slash Headcount : Groupon's GRPN decision to reduce headcount by 1,100 (out of a total of 12,000 employees at year-end) sent its shares crashing . Investors are concerned about its growth prospects, but the company is acting according to a prior strategy wherein it has been shutting down operations in several international locations to focus on core assets and operations. By 2016, it plans to exit Morocco, Panama, the Philippines, Puerto Rico, Taiwan, Thailand and Uruguay. This headcount reduction will result in charges of around $35 million, $24 million of which will be taken in the current quarter.
Legal/Regulatory
Yahoo Stock Unaffected by IRS Comments : Yahoo YHOO shares have been retreating on concerns that the tax-free Alibaba spin-off may not actually materialize in view of the new rules being reviewed by the Internal Revenue Service that disallow the spin-off of assets with the object of avoiding taxes, which is basically what Yahoo's doing. But IRS Associate Chief Counsel Robert Wellen has apparently said that the new rules will not have retrospective effect, which would prima facie indicate that the Yahoo plan may go through. While Yahoo shares did initially rise in response to the FBR note that brought up the issue, they sank again on the realization that the uncertainties remain.
New Technology/Products
Intel SSD For Data Centers : Intel's INTC new chips for the data center double data throughput rates (over the previous generation) for HPC, data center and big data analytics operations. The P3608 series as it is called supports a couple of non volatile memory express (NVMe) controllers and eight lanes of PCIe 3.0 data transfer for speeds of up to 5Gbps. Using NVMe standards for PCIe Flash greatly reduces latency and increases speeds and that's what Intel's doing here.
Microsoft Could Soon Launch Band 2
Microsoft Azure Cloud Switch Linux-Based : Microsoft said that the dissociation of hardware and software for advanced networking switches used in cloud operations will develop into quite a trend and it has therefore relied on Linux to build custom software for its Azure Cloud Switch (ACS). Since a lot of development in the cloud has taken place on Linux, using it for further development means you can learn from other's mistakes to speed up development and save costs.
Microsoft also has many other cloud initiatives (for example, it along with companies like Facebook, Apple, Cisco, Juniper etc, is a founding member of the Open Compute Project or OCP). Microsoft has announced that the ACS will integrate network management functions developed by the OCP in a big nod to open source and SDN.
Google Nexus Event Coming Up : Google has sent out an invite for a Sep 29 event at which it will likely provide further details about Marshmallow, unveil a couple of Nexus devices from LG and Huawei, and also possibly tell us about a new Chromecast. Based on leaks and surmises, it appears that the new Huawei phone will be its stepping stone back to China and Chromecast 2 (or whatever they are calling it) will come in three colors and include faster Wi-Fi and "Fast Play" for a quicker connection, as well as the ability to be directly plugged into a multi-speaker system.
Google Keep for iOS : Google has brought one of its most popular apps called Keep to iOS. Keep is a note-taking app with a difference, letting you store your thoughts, photos, audios, lists, etc and backing up in the cloud for access from practically any device in the future. Some of its advanced features include audio transcription, geo-location based reminders and picking up text from an image that can be fetched later.
M&A and Collaborations
Cisco In JV With China's Inspur
Microsoft Shows Some Love To Baidu
Tech Titans Fund Cybersecurity Startup CloudFlare : The unicorn (billion-dollar company) that its founders expect to go public by 2017, just raised around $110 billion from the who's who of tech world. And this is more than just an investment, because each will play a role in CloudFlare's future growth. Microsoft is bringing enterprise relationships, Qualcomm Ventures is bringing compatibility with mobile devices, Baidu will take care of China market penetration, while Google is already partnered with it for the delivery of its cloud services.
Some Numbers
Apple Gets More Popular in U.S. : A recent survey by Baird Equity Research shows that Android switchovers to iOS might accelerate. Around 53.2% of the 1,500 people surveyed said they intended to buy iPhones compared to 43.7% of a similar group that intended to buy last year. Apple's "Move to iOS" app has a 1.7 star rating on Google Play and App Annie says that it's rated 42 out of 500 apps, or "not awful", a rating used to compare apps of the same category. The app, along with Apple's upgrade program could generate a higher switchover in this cycle according to industry experts.
Instagram Usage Touches 400 Million
Google Moonshots Have High Price Tag : Citi analysts reportedly expect that Alphabet's non-Google businesses will account for about 12% of its operating expenses or $4.5 billion. The analysts are also optimistic about the core Google cash margin that improved in the last quarter. They believe that the core business is undervalued based on a sum-of-the-parts analysis, and therefore expect upside to the shares. The report stems from the increased transparency promised by new Google CFO Ruth Porat.
She has recently even started an old Wall Street custom to talk to investors during the quarter, which is viewed as a good way of building trust. Dubbed "Office Hours," these 15-30-minute sessions have been used to reaffirm that third-quarter expenses will be higher, driven by seasonal hiring of college grads, the beginning of holiday season marketing and higher legal expenses (Regulation FD okays these communications as long as they are not used to selectively disclose non-public information).
Google Drive Now Has One Million Customers : This is a big deal considering the fact that Google hasn't been that long into the game (Amazon and Microsoft have been there longer). Competitors Box and Dropbox have 50K and 130K users, respectively. More significant is the fact that these Google customers are business users indicating that Google is making headway with its enterprise strategy.
It's also important because storage services tend to be sticky with customers tending to go with the services they start using because of the increased cost of switching to the competition. Google has also reportedly obtained the ISO/IEC 27018:2014 privacy standard for Google Apps for Work, which means that a third party has validated its adherence to privacy standards. This puts Google on par with Microsoft OneDrive and Dropbox for Business.
Pandora Royalties Hit Milestone : The company that championed ad-supported music says that all-time royalties generated by its service touched $1.5 billion recently. Pandora has 80 million active monthly users that listen to 20 hours of music a month on average. The company says that the last half billion was generated over the past year or so, indicating that momentum is finally picking up.
Gartner Lowers Device Estimates Again : Gartner says that device shipments will decline this year as people hang on to their devices longer, extending lifetimes. Gartner also did a study of six key markets (U.S., U.K., France, China, Brazil and India), where it found that tablet users (excluding 7 and 8-inch categories) were the most likely to switch to other device categories, with smartphone and desktop users most likely to replace devices with others in the same category.
The largest chunk of people not replacing with similar devices in laptop, tablet and smartphone categories remain undecided about making purchases. Gartner includes Windows devices in its estimates and says that Windows 10 based on Intel's Skylake will grow through 2016 and pick up strongly in 2017. It doesn't include Chromebooks in its calculations. FX will be negative through 2016.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
