Apple takes on Tesla 🍎
Seeding unicorns, PSU divesting, and creator boom.
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Market summary: 📊
Decent bounceback in the Indian markets yesterday, with major indices making a surprise turn. US markets didn’t move much, holding ground as holidays come up.
US:
S&P 500 - down 0.21%
Nasdaq 100 - up 0.22%
India:
Nifty 50 - up 1.09%
Sensex - up 0.99%
Quick things to begin with ☕
1️⃣ Vaccine likely to work—scientists at BioNTech, the company that worked very closely with Pfizer to make the COVID-19 vaccine seem quite confident that the vaccine will work even against the newly found mutant strain of virus in the UK. The news helped allay some fears of citizens as lockdowns were set to make a return.
2️⃣ Divesting shipping corporation—GOI is now seeking bids to divest government owned Shipping Corporation of India (which basically runs many government owned ships on national and international routes), looking to offload all 63% ownership it holds in the entity. The central government had planned on selling several state owned companies this year, raising a record $28 billion, and use that capital to fill budget gaps.
3️⃣ Disaster avoided—the Sensex dropping big on Monday had everyone worried whether we’re going to see a brutal spiral downward. But Tuesday was much kinder, with both major indices adding some, and favorable commentary from pharma companies helping sentiment turn positive. We seem in safe waters, for now.
INFY is on a roll 🖥️
Infosys has forged a long-term partnership with Daimler to manage the company’s IT infrastructure. Just last week INFY signed a similar contract with Rolls Royce, to pioneer RR’s R&D innovation, making this the second straight automobile contract of this size.
Per this particular arrangement, INFY will help Daimler with all the basics of digital transformation -- establishing systems to facilitate daily operations in the remote working world. Also, INFY will streamline service centers, call centers, desk support etc. as traditional enterprises increasingly look to adopt cloud tools.
While there is no information on the dollar amount of the contract, INFY investors are rejoicing at the new found mojo as IT giants slowly crawl back from COVID induced slump.
What matters: automobile companies, despite all their engineering chops, suck at software big time. Companies like Tesla are forcing them to adapt fast to match their competence. Partnering with IT companies is the best bet for these vendors to accelerate change. But it's particularly interesting to see INFY build a unique niche here (in autos) that could bring even more similar business through the door.
Apple’s EV may be a reality 🔌
Credible reports emerge that Apple is working on its own electric car and that with plans of launching the vehicle by 2024. Investors were taken by surprise, adding more froth to an already bubbly market, with Apple itself adding $60 billion to the company’s $2 trillion market value.
It's barely a secret that Apple has been working on their own car project—hiring engineers, designers, autonomous R&D scientists for at least 5+ years. However, with lack of broad data harvesting, a relatively weaker maps-product, and Apple’s focus on “secrecy” of design and R&D, the company failed to make meaningful progress as compared to say Google’s Waymo.
But this time seems different. And unlike other projects, Apple will look to manufacture its own cars, like how Tesla does, holding end to end control over the design of the vehicle, as well as the software that goes into it (a much bigger market opportunity).
Other key details:
Concept is called “Project Titan”
Will use Apple’s breakthrough monocell battery technology, which is expected to be a lot more efficient
Apple veteran Doug Field, who worked at Tesla for 5+ years will lead the project
Apple will prospect manufacturers soon
They definitely have a long way to go. Testing cars, making sure manufacturing is thorough, wooing early buyers to buy (won’t be hard, but this is an expensive product with its own challenges), and then working with financial partners to enable lending and such.
Also, the new happenings emerge as a huge risk to Tesla’s free run to date—the company’s stock has soared nearly 8x this year alone, and investors weren’t prepared for this shocker.
Google “seeding” 2 unicorns 🌈
Utilizing funds from its India Digitization Fund (the $7.5 billion that was earmarked for India), Google invested in 2 Indian startups, Glance and DailyHunt—propelling both to the $1B+ valuation unicorn club. Billion here, a billion there, while rest of us scramble for small seed pennies. :P
Jokes aside, Glance which is part of the InMobi Group fetched $145 million in total, with existing investor Mithril Partners pitching in alongside Google. Glance basically utilized empty “lock-screens” on Android phones in India to deliver localized content to users, turning these lock screens into potential ad-placement properties and a big profit-center for its parent InMobi.
The company now reports over 115 million Daily Active Users, working directly with leading Android smartphone makers in India, including Xiaomi and Samsung. US and global expansion is now on the cards. Genius how InMobi turned this tiny “add-on” extension into a content delivery unicorn right under our noses.
On the other hand, DailyHunt picked up a $100 million check from Google, Microsoft, and AlphaWave, all of which is reportedly going to drive growth for the company’s short-video platform Josh. The vernacular platform, which is available in 12+ languages, is going after 200 million users it “believes” it can capture.
Absolutely believable considering DailyHunt already has like 300 million users, many of whom can be converted, and now they have a fat fat check to ramp up assault.
Bottomline: Google is a smart capital allocator. By investing in platforms around “content” and “advertising” the company is virtually insulating itself from eventual disruption that may come from India, especially considering explosive growth in vernacular content in India. Regardless, the capital infusion is definitely a big win for the local ecosystem, which could see a lot of this capital trickle downstream in time.
Tweet of the day 🐦
What else are we snackin’ 🍿
💉 India Vaccs Going global- Bharat Biotech and US pharma giant Ocugen have signed a binding letter of intent to co-develop the Covid-19 vaccine candidate Covaxin. Ocugen will have US rights to the vaccine candidate and, in collaboration with Bharat Biotech, will be responsible for clinical development, registration, and commercialization for the US market.
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