Tech showdown 🔥
CEO hearing, Unlock 3.0, and unstoppable Medtech.
Hi 👋, Tanvi here.
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Stock summary: 🤔
US - S&P 500 - down 0.38%
India - Sensex - down 0.88%
Silicon Valley roars on Wall Street 📈
In one of the most watched earnings seasons, technology companies unanimously reported breakout performances, putting all doubts to rest and cementing themselves as the new overlords of the world economy.
In summary, Amazon posted second quarter growth like it never did since 2011 on the back of unprecedented ecommerce demand, Facebook grew revenue 10% even as the digital market cratered, Google’s YouTube and Cloud saved the day, and Apple sold $26 Billion worth of iPhones, in the middle of a goddamn economic crisis.
Who in their right minds is buying $1,200 iPhones in the middle of a pandemic when people are losing jobs and literally dying. Seriously!?
Here’s some highlights from the record performances:
Revenue of $18.6 Billion, up 11% against last year
3.14 Billion people use its platforms each month, up 14% against last year 😱
Company making $29.78 each year per user on average
Added 32% more jobs vs. last year
Apple
Total revenue of $60 Billion, up 11% against last year
Sold $26 Billion worth of iPhones in 3 months
Apple’s most watched services revenue grew 15% against last year, to $13.1 Billion
Macbook and iPad were huge surprises as people working from home are upgrading their setups
Amazon
40% revenue growth as locked down consumers rely on them for everything
Cloud (AWS) revenue up 29% to $10.8 Billion
Stock gained almost 5%
And finally Google
Revenue down 1.7% YoY as Search advertising suffered due to travel and other sectors hurt by pandemic
YouTube revenue grew 5.5% accounting for $3.8 Billion in advertising revenue
Google cloud led by Thomas Kurien made $3 Billion for the quarter
Takeaway: rarely do we see recessions where leading companies continue to get stronger each day while consistently reporting top class business performance. Tech companies are writing history here and Wall Street can’t help but cheer. Read more.
Big Tech CEO’s picnic 🏛️
CEOs of Big Tech firms including Bezos, Zuckerberg, Pichai, and Tim Cook of Apple were grilled for over 5 hours yesterday by the US Congress in an antri-trust hearing, which was quite frankly amusing and boring at the same time. The hearing was a culmination of a year long investigation into anti-competitive practices of the companies.
If you’ve ever seen a congressional hearing of big tech before, you know better than having high expectations. The standard dialogues ensued with Congress representatives taking turns grilling the CEOs, while putting their basic technology unawareness out on display.
For example, one representative asked Mark Zuckerberg why politicians were being taken down on Twitter, implying that he doesn’t know the difference between both the platforms. The Chairman of the committee wore an Apple Watch to the hearing where the CEO was being grilled for their practices. Countless such odd events.
Jokes aside, some notable highlights:
Some representatives came surprisingly well prepared, questioning businesses on their previous M&A, regular practices, and malignant actions
Republican members asked a lot of questions on anti-conservative bias
Zuck was quizzed on quashing competition from Snap and Insta
Bezos was asked about fake products, 3rd party data usage
Tim Cook of Apple received the fewest questions
Analysts believe not much will come of the toothless hearing, other than of course more heat on big tech companies, which means no more lax decisions, bad PR, or aggressive acquisitions for a while that may attract regulator attention. Read the highlights here.
Bottomline: it is very hard for the US to take down all big tech companies at once, particularly when their products are so popular worldwide and they carry the weight of the US economy. Moreover, the US is in an unspoken tech war against China, and handicapping its own leaders could backfire.
Unlock 3.0 🔓
The centre has issued new guidelines for opening up of activities in areas outside the containment zones as the nation prepares to enter part 3 of its phased unlock. Rules will go into effect from 1 August 2020.
What will be different?
Gyms and yoga institutions will open from August 5
International air travel under Vande Bharat mission will be permitted
Independence day functions will be allowed
No restrictions on inter and intra state travel
Metro rails to not open
Cinema halls to remain shut along with bars, parks, assembly halls.
No religious, social, political activities and large gatherings will be allowed
Lockdown in containment zones to go on till 31st August
Only essential activities in containment areas will be allowed
The pandemic is getting worse as India cases crossed a 15 lakh mark with the death toll rising to 34,193. However, if the rest of the world is any cue then it seems like we can wear masks, maintain social distance, and get back to some normalcy without worsening things, while putting a stop to the economic damage this lockdown has inflicted. Read more.
Another massive ed-tech win 💪
Ed-tech startup Toppr has raised $46 Million in a round led by Dubai-headquartered Foundation Holdings, bringing the test prep website’s total to-date raise to over $92 million. Congos!
The company stated that proceeds from the round will be used to ramp up its adaptive AI learning product and to launch new platforms to teach coding. The capital will also be utilised to develop an AI-based Toppr School Operating System - an end-to-end management system that will be sold to schools, that also integrates in-school and after-school curriculum to allow Toppr and schools to deliver personalised experiences. Sounds innovative!
Just last month the startup also launched a monthly subscription product Codr, aimed at helping all school-age children learn computer programming.
Bottomline: outside of ecommerce, there is no space that comes close to ed-tech’s rage currently in India. And the continued momentum tells us we’re far from any growth saturation. Read more.
Medtech is unstoppable 🏥
An Israeli medical imaging player, Nanox, out to replace the X-Ray has raised over $59 Million to close out its $110 Million Series B round. The company’s product replaces bulky X-ray machines with a low cost, downsized set up.
Nanox’s flagship set up is about 70 kg compared to 2,000 kg for a CT scanner, and costs a fractional $10,000 vs. $1-3 million for the CT scanner.
The startup currently lacks the regulatory certifications to sell its devices by itself so it sells its IP to Foxconn, SK, Fuji and other traditional vendors, who make devices based on its concepts. Immediate plan post the capital raise is to have at least 15,000 scanners out in the market.
Nanox is particularly interesting because it represents an era in the future where portable medical technology is key to bringing better services to the masses. COVID-19 has only accelerated that necessity. Imagine having the scanner fitted in an ambulance, connected to the cloud with a physician on the other end. Particularly as 5G is on the horizon, the company claims a lot of telecom operators have shown interest in them.
Why we care: med-tech offers transformative opportunities in India and with the onset of 5G, could be a critical angle of attack for wannabe tech leaders in India. Worldwide, medical technology is a $650 Billion market by 2025, growing more than 6% each year. The opportunities are abundant. Read more.
Tweet of the day -
Look ma...
What else are we snackin’ 🍿
🕴️ Old retail takes a haircut - Raymond Ltd., one of the world’s biggest producers of worsted wool fabric is cutting costs by more than a third as the pandemic evaporated demand. The company will slash jobs, shut down some retail, and cut down on marketing. They will also freeze loan repayments under a one-time program offered by the central bank.
👋 Uber dumps Hong Kong - Uber has halted its plan to move its Asian HQ to Hong Kong after China enacted a National Security Law for HK which has Uber worried about its future there.
👊 Challenging China app ban - a digital advocacy firm has questioned the government's decision to block 59 apps and noted that any opaqueness in blocking rules impacts the digital rights of citizens. The firm filed an RTI request seeking reasons behind the ban but was informed that information is "restricted" and "prohibited".
👕 Adapting to the new reality - Myntra is launching a Work-From-Home wear private brand adapting to the new world. The platform will partner with UAE based brandNoon and Namshi, to sell ath-leisure and casual wear to shoppers in the region, in a test run before it thinks of India.
👻 Snap’s diversity pledge - Snapchat pledged to double the number of minorities and women staff in its tech teams after reports highlighted how gender balance within its tech teams remained low and that the bias might start creeping into its policies toward users. The company announced extensive plans to diversify its workforce by 2025.
💭 IBM’s quantum dreams - the company launched a research partnership in Japan to accelerate advances in quantum computing, deepening ties between the two countries in an emerging and sensitive field. Members of the new group, which include Toshiba Corp and Hitachi Ltd, will gain cloud-based access to IBM’s U.S. quantum computers and IBM will also set up a quantum computer for R&D in Japan.
🍻 Dealing with the important problems - Karnataka government is seriously considering a proposal that allows home delivery of liquor and kicked off extensive consultations with all stakeholders. As a first step, the excise department is planning to allow online sale of liquor in Bengaluru city via mobile apps before extending it to the rest of the state.
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