Technology – Market Bull Breaths Financial Market News

These Countries Are Pushing For Censored Internet

Francisco Cortez-Delgado — Tue, 05 Mar 2019 19:23:36 +0000

With upcoming elections, countries like India, China and Nigeria are proposing censorship controls in place to limit connectivity and access for their citizens.
This is a business risk that may impact operations of global tech giants like Google and Facebook

The internet has been a driving force for global connectivity allowing the rise of today’s tech giants like Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG). Due to the interconnected nature of the internet, these companies have been able to conduct business internationally across all countries.

However, several countries are putting censorship controls in place to limit connectivity and access. With upcoming elections for many countries, worries of foreign tampering have caused some to consider extreme measures.

India announced a proposal that would install a Chinese-style censorship ahead of its elections. These proposed rules would allow Indian officials to demand that big web platforms remove content they deem bad for society.
Russia has considered creating an autonomous internet only for its citizens in the event that the country is cut off from other networks. Citing cyberdefense concerns, Russia has plans to temporarily disconnect from internet as a way to test their defense.
Congo & Nigeria have used censorship to manipulate elections
China has long blocked access to certain sites from being accessed within its borders. The use of VPNs to go around these barriers has been deemed illegal.

The isolating tactics by some of these countries goes against the fundamental belief of the open worldwide web. Such moves stall development and prove to be a business risk that the giant tech companies may soon deal with on a global scale.

Article by: Francisco Cortez – Delgado
I graduated from Queen’s University with a Master’s of Political Studies. The intertwined world of politics and economics intrigue me. My favourite stories to cover are the ones that show how a few selected officials can impact nationwide macro-economic policies. I also follow the broader markets and FOREX.

Tesla Dominates EV Market in 2018

Mick Ross — Mon, 04 Mar 2019 15:34:39 +0000

EV sales surged 74% in 2018 to a total 1.26M around the world. Atop the list was Tesla’s Model 3

EV sales surged 74% in 2018 to a total 1.26M around the world. Atop the list was Tesla’s Model 3 with 138,000 cars. At number 2, with 92,000 units, was BAIC EC, the Chinese manufacturer.

Tesla’s Model 3 outsold its nearest competitor by about 50% in its first full year on the market.

Even with pressure on their financials, Tesla seems to be dominating the EV market with two models in the top 5. This 2018 data comes around the same time as Elon Musk projected the company to sell 500,000 vehicles in 2019. Tesla is also planning to shut down retail locations as a cost cutting measure to focus funds on bringing their cheaper $35,000 model into the market.

Article by: Mick Ross
Mick is currently a full-time investor and formerly a buy-side analyst (2yrs) covering healthcare companies. Before that, he was a salesperson at a bulge-bracket firm, based in Dallas, Texas. Mick blogs to clarify and synthesize his investment thought process and to elicit feedback; additionally he likes to connect with other investors and swap ideas.

A “Netflix for Games” Could Be On The Way

Mick Ross — Mon, 04 Mar 2019 15:15:04 +0000

The tech giants, Google, Apple, Microsoft and Amazon are expected to make a push into creating a cloud streaming service for games
Detailed plans are expected to be unveiled at the upcoming Game Developers Conference in San Francisco March 18-22, 2019

The tech giants are looking at transforming the gaming space by creating a “Netflix for videogames”. Google, Microsoft, Apple and Amazon are each reportedly working on their own versions of a subscription service for video games.

The companies are contemplating moving video games onto the cloud, which could eliminate the expensive hardware (Playstation and Xbox) needed to play. Instead, games would be accessible on any device, not just specific ones created for gaming.

In order to accomplish this plan, however, the tech giants will need to license content and games from existing developers like Activision and EA. The only issue is that, as it stands, the existing video game publishers have no incentive to change the industry practice.

We will have to wait and see how the most powerful companies in the world divide the terms and incentives with video game publishers.

Below are plans that have been reported from each tech giant

Google is planning to unveil its videogame service at the Game Developer’s Conference next month in San Francisco, Fortune reports. The search giant is reportedly spending heavily to get game publishers to license their content.

Apple is looking to build a service that allows users who pay a subscription fee to access a bundled list of titles, Cheddar reported in January. Apple could choose to use a March 25 event, where it is expected to introduce news and video subscriptions, to also debut a game subscription offering.
Microsoft’s service could let users play high-end video games anytime on any device, not just Microsoft’s own Xbox console, Business Insider reported in January.
Amazon is building a subscription streaming service for games, The Information reports. Like Google, it’s also reportedly in talks with game publishers.

China & USA Tensions Spill Over to Cybersecurity

Mick Ross — Thu, 21 Feb 2019 17:36:59 +0000

US breaches sourced from Chinese hackers have resurged since Obama left office
Hackers are targeting companies with large data on the general public
Increase in attacks could end up being a tailwind for cybersecurity names

American businesses have seen an increase in attacks from Chinese-based hacker groups. The spike in attacks, which is primarily targeting telecom, pharmaceuticals and hospitality companies, can be traced back to Trump’s presidency, around the same time the two countries started clashing.

The Obama administration reached a truce in 2015 not to conduct cybertheft of trade secrets and intellectual property against one another for commercial gain. With the recent tension between the two nations, this truce appears to have been called off.

Hackers target telecommunications and hospitality firms due to the amount of information they have on the general public and other organizations like governments and businesses. The US government last year attributed to China the hack of Marriott’s Starwood hotel chain, which potentially exposed the personal information of approximately 500 million guests.

The increase in the amount of breaches will bring greater exposure, and potential business, to cybersecurity companies like FireEye (NASDAQ:FEYE) and ProofPoint (NASDAQ:PFPT).

Digital Marketing Spend Will Surpass Traditional Marketing This Year

Mick Ross — Thu, 21 Feb 2019 16:50:11 +0000

The rapid growth of digital marketing will continue to push spend higher, while spend on traditional methods declines

Research firm eMarketer predicts that in 2019, U.S. ad dollars spent on digital channels will surpass the total ad spend on non-digital ad channels.

Digital includes desktop, mobile, search, and social media, while non-digital ad channels are television, out-of-home (billboards), radio, newspapers and magazines.

In 2018, eMarketer projects that digital ads were a $108.6B business, shy of the $114.8B spent on traditional channels. This cross between the two will occur in 2019, and by 2021 digital is expected to be a $172.3B business while traditional shrinks to $104.3B.

The conventional methods that have dominated the marketing and entertainment landscape are slowly becoming the alternative option due to the rapid growth in digital marketing. Digital is growing so quickly that it’s slated to surpass revenue from all of the old-school mediums.

This shift is a lift for the large digital advertisers than host most of the consumer traffic online. Facebook (NASDAQ:FB), Google (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) have continued to post record revenues, even though their dominance is shared amongst other smaller players.

Security Concerns and International Disputes Slowing 5G Rollout

Francisco Cortez-Delgado — Mon, 18 Feb 2019 14:43:25 +0000

Rolling out in 2019 & 2020, 5G, the fifth generation wireless system will succeed 4G, which was first introduced in 2009
At 10GB/second, 5G could end up being 100x faster than 4G
Citing security concerns, countries have banned largest 5G equipment maker which could slow the advancement of the technology

A full decade after the commercialization of 4G, the next generation of mobile networks will start rolling out globally. With 5G, a full HD movie could be downloaded in seconds or up to 100x faster than the prior 4G version.

5G will also promote the growth of internet of things (IoT). It increases transmission speed and total bandwidth which will be needed to accommodate the added demand from “smart” objects like vehicles, appliances and clothing, all of which are getting online by communicating with one another.

While 5G will bring more devices online, it will also significantly increasing security worries. By 2024, mobile networks will carry 5x the amount of data that they carry today. During this time, more than 22 billion gadgets will be connected to the internet. The potential for security breaches will increase, as a result.

Some nations are worried that Chinese 5G equipment, chips and software could be outfitted to spy on other nations. In recent months, counties like Australia, USA and several European nations have banned Huawei and ZTE Corp from supplying 5G wireless equipment to its telecommunication operators, citing national security.

These bans and restrictions may cause the US and EU nations to fall behind in the global 5G race. Currently, China, South Korea and Japan are expected to lead the 5G rollout. The US-led crackdown on Huawei could place US & EU nations behind.

With IPO Nearing, People Spent $50B on Ubers in 2018

Mick Ross — Mon, 18 Feb 2019 14:43:23 +0000

Uber reported that total bookings for its ride-service and food-delivery businesses rose 45% from 2017
The company generated $11.3B in revenue by taking its cut, but it failed to show a profit

Uber Technologies Inc had $50 billion in total bookings for its ride-service and food-delivery businesses last year, up 45% over 2017. Uber’s full-year revenue for 2018 was $11.3 billion, up 43 percent.

Even with the impressive top-line growth, the company reported losses before taxes, depreciation and other expenses of $1.8 billion, an improvement over the $2.2 billion loss posted in 2017. With an IPO planned in 2019, analysts have projected that Uber’s valuation can top $100B.

Many investors are overlooking Uber’s lack of profits for top-line growth, betting that Uber can turn a profit with enough of a presence globally. Currently Uber is subsidizing ride costs to compete with alternative services such as Lyft and Ola in India. Still, Uber critics question whether the company’s business model is broken and if it can ever operate a profitable business.

Reddit Cleans Up Advertising Model and Receives $3B Valuation

Mick Ross — Thu, 14 Feb 2019 15:06:36 +0000

Reddit raised $300 million at a $3 billion valuation, up from a $1.8 billion valuation in 2017, when the company took in a $200 million investment.

Reddit had focused efforts to clean its platform to attract advertisers

Reddit has faced criticism for its lax regulation around hate speech, piracy, harassment and even election interference. As a result, the social media company is seeing valuations much lower than peers because advertisers have shied from Reddit.

Reddit has roughly 330 million monthly active users (MAUs), making it on part with Twitter. Yet, monetizing efforts have been significantly lower. It’s estimated that Reddit revenues are approximately $100M. This means that each monthly active user is worth about $0.30.

To compare, Facebook (NASDAQ:FB) yields a average revenue per MAU of $7.37 and Twitter (NYSE:TWTR) of $2.83.

Reddit has focused its efforts over the past year on cleaning up its platform to build a better advertising model. As a result, it has cleaned up its site and focused on more lucrative advertising opportunities, primarily video. Investors have rewarded the company most recently with a $3B valuation.

Apple Revenues Shifting To Services With US User Spending Up 36%

Mick Ross — Wed, 13 Feb 2019 14:12:51 +0000

Apple service revenues, which includes App Store subscriptions, Apple Music, Apple Pay, are showing robust growth as the company is also reporting decline in iPhone sales

Revenue generated per U.S. iPhone grew 36%, from $58/user in 2017 to $79 in 2018. Much of that increase can be attributed to mobile gaming, which accounted for more than half of this per-device average. This service figure includes Apple’s (NASDAQ:AAPL) App Store subscriptions, Apple Music, Apple Pay, iCloud, App Store Search ads, AppleCare and more.

From 2017 to 2018, iPhone users spent an average of $21 or more on in-app purchases and paid app downloads — a 36 percent increase compared with the 23 percent increase from 2016 to 2017, when revenue per device grew from $47 to $58 (below)

The majority of the revenue is coming from mobile games’ in-app purchases such as Activision Blizzard’s (NASDAQ:ATVI) Candy Crush. However, the highest growing category is “Entertainment”, which grew 82% year over year due to popularity of video streaming services like Netflix (NASDAQ:NFLX).

The increase in service revenue comes at a time when Apple has reported slowing iPhone sales and China concerns. The company’s reliance on services is showing signs of paying off.

Competitive Pressures from Fortnite Cut Into Profits of Video-game Makers

Mick Ross — Fri, 08 Feb 2019 13:37:33 +0000

Electronic Arts and Take-Two Interactive delivered disappointing sales forecasts amid stiff competition from the likes of Fortnite, developed by Epic Games.
Shares of the video-game makers have tumbled

The biggest names in video games have stumbled this year as big releases flopped and online spending came up short. Revenue figures have disappointed investors as Electronic Arts (NASDAQ:EA) disclosed that some of its top productions – including its latest Battlefield title – had come below expectations.

Take-Two (NASDAQ:TTWO) has seen shares fall over 20% over last 6 months after forecasting sales that were $100 million below Wall Street forecasts. Activision Blizzard (NASDAQ:ATVI) is down 48% from its October high, and had underwhelming numbers for Destiny 2 and an expansion of that shooting game.

The results are a reminder that video-games are a hit-driven business, rising and falling based on unpredictable consumers. A wildcard competitor like Fortnite, developed by Epic Games and partly owned by Chinese Tencent, could pose huge issues for large video-game makers.