Backfired 💥
Building EVs, Airtel’s victory, and passing of an icon.
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What’s brewing hot? ☕
✅ Airtel scores one over JIO—the telco wars have a new twist, Airtel managed to add more subscribers during the last 3 months of 2020 than Jio. With some 5.5 million new subs, compared to Jio’s 3.2 million, Airtel ended the year with a market share of about 33.7%, just a tad over Jio’s 33.6%. While scrambling far behind both of them is Vodafone, with a 26.3% share, lost in its own problems of poor coverage and no cash to service assets. Jio taking the gas off the pedal a bit with its aggressive marketing campaign, combined with a couple price increases in tariff may have let Airtel eke out the lead, but investors are rejoicing and Airtel stock’s up like 40% in the last few months.
✅ We're done paying the Brits bruh—India’s refusal to pay Cairn Energy the $1.2 billion or so in back taxes we owe them has forced Cairn to sue India again, this time in US courts. The dispute is basically from 2015, when GOI demanded an energy company pay some ₹10,200 crore in taxes. The company refused saying it was insulated by a tax treaty, so GOI force sold some of their assets here in India. Cairn went to a UK based arbitration court, which ruled against India, and forced GOI to pay back the money. Anyway, India has no money to spare right now given a tight budget and the pandemic caused cash crunch, but chances are we’re gonna have to pay up soon.
IBM dumps Watson 👋
IBM will be selling off its Watson Health AI business, as the company aggressively shifts focus towards the cloud software opportunity, in a desperate attempt to return to growth under the leadership of the new CEO, Arvind Krishna.
Launched back in 2010, IBM's Watson program was in fact originally the company's flagship move for revival. The marketing around Watson pitched the product as the world's foremost AI computing system back then, and companies who love spending on “buzz words” ended up paying bombs of a price for early exclusive use. But over time the layers began peeling off and people realized we’re talking about a bunch of data management products repackaged with custom services, many of which were part of the old product portfolio IBM was already selling.
So the growth the business was to deliver to the rest of the IBM empire never really came. Despite the gimmicks and the pushback though, the healthcare focused vertical makes about a billion dollars in revenues, but isn’t profitable, and hence of no use to Krishna who’s a man with a task right now.
Negotiations are now on with a host of companies for sale, including private equity firms or a blank cheque company.
Key takeaway: the move is part of a series of decisions by the new IBM CEO taken to bring the company to growth. Just last year had IBM decided to sell off another major business unit that focuses on consulting.
Ouch, FB 💔
So last week Facebook banned all news on its platform in Australia, over protests against the Aus government’s latest law demanding FB pay news publishers some commissions. Well, it appears the move may not have worked out as FB would’ve hoped.
Over the weekend the The Australian Broadcasting Operations (ABC) news app shot to the top of Apple’s App store chart. Effectively, people who were used to getting their fix of the day’s news on social platforms, ended up going right to the source, giving the news apps a direct relationship with consumers and the digital following they had been asking for unsuccessfully for years.
The news app sitting on top of all of other FB owned properties is just a piece of art.
If the trend continues, perhaps it could give the news companies some leverage and a reason to continue to hold the line against Facebook... Also, what happens if ALL news players in some tiny region decide to quit FB altogether, hoping for a similar outcome? Too far fetched, but Facebook may have opened the Pandora’s box on this one, and lost engagement was the last thing the declining FB blue app needed.
When cars are made like smartphones 🚗
Global electronics maker Foxconn, which is one of the leading makers of Apple’s iPhone, is setting up its electric vehicle manufacturing operations, and will be ready to mass produce electric vehicles for its contract partners by the end of 2021.
Why this matters—electric vehicle markets are on fire right now, with every EV stock and startup flying off the shelf like hot cake. But the lethargy and inertia of the traditional automakers to make the most of this opportunity is crippling progress. However, it's also offering a nice entry for electronics manufacturers to control the game.
In the EV game, the "mechanical" innovation is limited. We don’t need stronger brakes, or better wheels, or better combustion systems. Instead, most product innovation will come from superior electronics (for drivetrain, and for batteries) and software—an angle giants like Foxconn have honed for decades by making you those fancy iPhones and computers.
Not all, but some of this tech is easily replicable and if guys like Foxconn are fast, they can quickly build momentum in the long long long ass game.
Anyway, two passenger vehicles and an electric bus are in the pipeline for Foxconn, and they’re basically making these cars for automakers on a contract basis.
Closing out—guy who made the Bull 🚗
Arturo Di Modica, the guy who made the iconic bull sculpture on Wall Street—a global symbol of the force of capitalism and the free markets, passed away over the weekend.
Arturo’s story is quite amusing—he was an Italian immigrant to New York back in 1973, and spent nearly $350K of his own money to make the massive bull, got a crane and truck and had it installed himself without permission sometime in 1989. He wanted to honor the “strength” of the bull economy after the market crash of 1987.
Tweet of the day 🐦
What else are we snackin’ 🍿
🛒 Myntra pushing for change—Myntra’s new leave policy will not only allow employees to take leaves when they’re sick but also when their family members are sick. The company has also made a decision to make wedding leaves available for same-sex couples. With work from home causing massive overworking, blurring boundaries, and bringing new challenges around productivity, it's good to have startups show sensitivity and drive some change.
Hit that 💚 if you liked today’s issue.
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