IPL devalued 📉
JioFiber raise, News vs. Apple, and ride hailers fight.
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Market summary: 📊
US:
S&P 500 - up 0.34%
Nasdaq 100 - up 0.68%
India:
Nifty 50 - up 0.53%
Sensex - up 0.56%
Yo, the Arabs keep comin for more 🤝
Last month we wrote about the Qatar Investment Authority looking to plonk $1.5 billion into JioFiber, helping Reliance build out a dense fiber optic network in India. Now the Saudi Public Investment Fund is contemplating buying a piece of the cake for itself, for about $1 billion.
The Saudi sovereign wealth fund (huge backer of Softbank) is currently rotating its bets, upping its investments in Silicon Valley and other tech initiatives across the world while running away from its sports and other entertainment bets battered by the pandemic. Apparently the Saudi’s got a whiff of their investment rivals, the Abu Dhabi Investment Authority, courting Jio for an investment and made their pledge in replacement.
Anyway, after locking in $20 billion for digital services via Jio Platforms, the momentum is very strong in RIL’s favor and raising for pan-India broadband and 5G infrastructure deployment won’t be that hard.
Bottomline: countless carriers across the globe (Verizon, AT&T, Orange, Docomo NTT you name it) tried dominating the full spectrum of consumer tech offerings - from infrastructure to end digital services, and only a couple succeeded. Yet, none of them had firepower in early days to the tune of what Reliance does today, so you can only imagine what’s coming in the future. Read more.
Ride-hailers’ new quest 🚕
As ride hailing demand remains crushed, Uber is keen on experimenting with alternative avenues of business. It’s recent foray is to deliver prescription medicines in the US.
Partnering with an on-demand prescription fulfillment startup called NimbleRx, Uber will offer the last mile logistics services and deliver drugs from pharmacies to homes of patients. So far the pilot is launching in just 2 cities, but a potential rollout could come to 34 US states that NimbleRx is operating in.
What does this mean: ride-hailers were already struggling to make unit economics work. The pandemic dealt an unwarranted death blow, worsening the state of business. But as they say, necessity is the mother of innovation and all ride hailing companies globally are forced to look for additional monetizable avenues. Last mile fulfillment and logistics was on the back burner until now but as ecommerce is winning in the new world, the case for ride-hailers to enter is extremely compelling.
What’s unique about Pharmacy is that the margins tend to be very attractive. Some drugs cost thousands of dollars in the US, with expensive insurance payouts bearing the costs. Ride-hailers could considerably beef up their profits here without much heavy lifting.
We could even expect an Amazon/Flipkart/RIL partnership with Ola/Uber coming up in India as well, as ecommerce giants vigorously enter the online pharmacy arena. Read more.
Making new foes 👊
Major news houses including the New York Times and Wall Street Journal have joined the fight against Apple for unfavorable app store terms. The news companies are trying to get a better cut of the digital subscriptions sold on Apple’s platform.
Currently, Apple takes 30% of a subscription through its App store, and only drops the rate to 15% once a consumer comes to renew next year. However, the news agencies, who have been struggling thanks to advertising revenues vanishing, think that the fee is too high which stops them from investing in high quality news.
The group of news companies have submitted a memorandum to Apple’s Tim Cook. So far no legal routes have been taken. Read more.
While we’re still onto Apple,
The company apparently secretly acquired an Israeli computer vision company called Camerai, to accelerate pace of innovation in the augmented reality space. Camerai’s platform allowed developers to integrate AR and image processing functionality without writing a lot of code. The company has mostly been operating in stealth before Apple scooped it up for “tens of millions of dollars”, and folded it into Apple’s computer vision team building iPhone’s cameras.
Late night theatrics 🌚
Last night, Lyft and Uber warned Californians of a looming shutdown at midnight as the companies were unable to comply with court ruling demanding drivers be instated as full time workers.
As the deadline was closing in, and as the risk of countless drivers thrown jobless and passengers rendered helpless seemed inevitable, a Judge granted an emergency stay order, offering ride hailers temporary respite to continue operations without disruptions.
The nail biting thriller is turning out to be a mockery of California’s politics, as the state, despite grappling with a battered economy and fleeing residents, remains headstrong in taking on the gig economy enablers who employ millions.
But the state is also quickly running out of firepower on its side as the ride hailers have amply shown they’re willing to walk away entirely. Trials begin in October and the world will be watching how this ends. Read on.
COVID’s impact on IPL 🏏
Locked down citizens may desperately be waiting for some sports entertainment but that won’t be enough to fix all of IPL’s problems this year.
The VIVO fiasco apparently alienated a sizable number of viewers in the short term. IPL inadvertently found itself on the wrong side of the India-China fiasco and some fans are livid.
Then although a new sponsor jumped in, saving the day for BCCI, the deal came at a considerable discount. VIVO’s contract was for ₹440 crores, while Dream 11 scooped it up for ₹222 crores only.
Then moving games over to the UAE, with no sales of tickets or commissions from other merchandise adds to the problem. In total, estimates suggest IPL’s brand value will tank 5-15% in this COVID battered year, a considerable hit from the 13.5% percent growth to ₹47,500 crore we witnessed in 2019. Read on.
What else are we snackin’ 🍿
👏 No hate talk on TikTok - advocating a zero tolerance policy towards hate groups, social app TikTok has removed over 380,000 videos in the US for violating its hate speech policy this year. The company also banned more than 1,300 accounts for posting hateful content.
😕 No mo parties - Airbnb has enforced strict social distancing norms and has banned reserving its properties for parties as the company steps up policing on the platform. The move could partly be driven by a mandate to appear more “corporate” like to appease Wall Street investors as Airbnb prepares for an IPO. Partying guests are threatened with permanent bans.
📦 Doordash’s latest foray into groceries - Restaurant delivery company Doordash has launched a new grocery service on its app, delivering staples in real-time with little to no wait. The company will focus on expanding to more regional and specialty chains in the coming weeks. So far, the company has been really effective in stealing market share for its other services.
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