The World of Tech in July
Updated: Sep 22, 2020
India cracks down on China tech
India’s ban of 59 apps Chinese apps (including TikTok) with a cumulative total of 5bn downloads comes as a big blow to Chinese tech firms looking to expand overseas. The main gripe comes with the fact that Chinese laws require firms to share data with state security agencies, and this has, without doubt come as a further consequence of Chinese aggression towards India in mid-June. Other crackdown on Chinese apps has come from Wells Fargo, which has also ordered some of its staff to delete social network TikTok from their work devices over “privacy and security” concerns as TikTok comes under intense scrutiny over data gathering and other possible security implications.
Huawei kicked out of the UK
By 2027 all Huawei hardware is to be removed from British 5G network, and this comes
after advice from National Cyber Security Centre (NCSC) on the impact of US sanctions against Huawei. Britain is also stepping up efforts to persuade its “Five Eyes” security partners and other allies to collaborate on finding alternatives to Huawei as a 5G supplier, ahead of its expected decision this week to curb the Chinese company’s role in UK networks. BT, however, warned on Monday that it would be “impossible” to remove all the equipment made by Huawei in its telecoms networks in less than a decade, as the industry cautioned the UK government against taking drastic action against the Chinese company.
BT said in January that the cost of complying with the 35 per cent cap on Huawei’s market share would be about £500m. Boris Johnson’s government says, however, that existing kit must be stripped from 5G networks by 2027, but consequently, Britain’s rollout of 5G phone networks could be delayed by up to three years and cost an extra £2bn. This has entirely seen the slowdown in the growth of Huawei – The group’s telecoms equipment business has faced severe political headwinds, while its consumer division has been affected by trade sanctions that stop its latest phones from using Google’s suite of mobile phone software.
Ericsson, the Swedish telecoms equipment maker and the biggest rival of China’s Huawei, has seen significant boost following government orders for carriers rip out kit made by Huawei and, in several countries, replace it with Ericsson’s, sending the stock up by a tenth to its highest level in more than a decade.
Cambridge University predictive touch technology trialled by Jaguar Land Rover
The ongoing pandemic continues to see touchless technology growth, with contactless movement-tracking systems being implemented within the interior interface of high-end Jaguars and Land Rovers. Being pioneered in Cambridge University, predictive touch technology may also become a staple good in consumer retail stores. Such anti-social and anti-contact technologies are also being increasingly implemented in the form of robots, as many firms have used this opportunity to turn to such technologies as cheaper, and more efficient sources of labour as the pandemic squeezes margins. For instance, DHL are using artificial intelligence to allow for fleet management for further efficiency.
Deals, Listings, and more...
Nvidia looks to buy Arm from SoftBank
Nvidia, the US Chip company, is in talks with SoftBank to buy Arm, the UK chip designer in a deal worth upwards of $32bn. This is particularly interesting given the ability of Nvidia to use its stocks in the purchase, which nearly tripled in value in the last 4 months.
This deal would put Nvidia at the centre of the semiconductor industry, as Arm’s technology has applications outside of Nvidia’s high-end position within gaming, research and AI, through Arm’s licensees such as in Apple and Qualcomm.
SoftBank itself is still quite promising, as the Tokyo-listed technology conglomerate’s shares have risen 143 per cent in value since hitting a panic-inducing low in mid-March. They now sit at a 20-year high, while some of most high-profile investments in its $100bn Vision Fund, such as Uber and Slack, have seen their share price double in the same period. Thus, its review of potential assets to strip such as Arm comes of particular interest.
Secondary listings for another chipmaker - SMIC
Shares in SMIC popped 246 per cent in the first day of trading, as the Chinese chipmaker entered the ranks of country’s most valuable publicly listed companies following a secondary listing in Shanghai. Shares began trading at Rmb95, up sharply from the offer price of Rmb27.46 and closed at Rmb82.92.
Insurance start-up Lemonade shares double after IPO
Lemonade, which was IPO’d at $29 was up to $60 by midday, valuing the firm at $9bn. The destructive and 5-year young firm aims to capitalise on the age-old insurance industry in which older firms have failed to modernise
Uber strikes deal to buy Postmates for $2.65bn
The deal, worth $2.65bn, is expected to close in Q1 2021 after the failed attempt to acquire Grubhub, being beaten out by Just Eat for $7.3bn.
The acquisition would place Uber-Postmates in a position with 37% of the national market in US, against DoorDash’s 45%.
Sony invests $250m in Fortnite’s Epic Games
After concerts within Fortnite drew more than 12.3m concurrent live viewers, Sony hopes to push more of its music, movies and other content into the Fortnite world, and so has bought a $250m stake in Epic Games as they prepare for the launch of the PS5.
New media companies in trouble
New media companies like BuzzFeed and Group Nine are at a critical moment, with their hopes of turning a profit this year dashed by the pandemic. Publishers’ online advertising sales are expected to drop between 19 and 23 per cent in 2020 and companies have been slashing pay and jobs since March.
Apple and Taxes
EU judges have quashed a European Commission order for Apple to pay back €14.3bn in taxes to Ireland in a landmark ruling that deals a big blow to competition commissioner Margrethe Vestager’s efforts to crack down on low-tax regimes in the bloc.
Dell looks to sell off assets to overcome stock market discount
Dell Technologies is considering a spin-off of its near-$50bn stake in VMware, a data centre software company widely considered its most attractive asset, in a bid to overcome a hefty stock market discount on its business. It plans on Wednesday to sell its 81 per cent stake in VMware, the cloud computing business it acquired when it bought data storage maker EMC for about $63bn in 2016.
Volvo invests in blockchain group to track electric battery materials
Investing approximately $80m in Ciruclor as it plans to ensure a discrete step away from unethical sourcing of energy. This comes after many European factories ceased operations amidst the pandemic due to Chinese mines closing.
The Ant Group’s secondary listing
Alibaba’s payments arm Ant Group, which has most recently been valued at $150bn, has announced its long-awaited public offering with a dual listing in Shanghai and Hong Kong.
A listing of even a small portion of its shares would represent one of the biggest IPOs of an Asian company.
eBay merges with Adevinta in $9.2bn deal
Norway’s Adevinta is paying $9.2bn in cash and stock to create the world’s largest online classifies advertising business with eBay, which will become the largest share-holder in the company.
The merger makes Adevinta the number one player in the main European economies, with the combined company including classified ads websites in 20 countries.
India’s Jio receives further investments
Facebook and Google are leading investments into India, investing over $10b into Ambani’s Jio.
Jio now seeks to dominate India’s digital economy, whilst for Silicon Valley, the investments provide a foothold in India’s rapidly growing digital market, facilitating future access.
The EU investigates Google’s bid for Fitbit
Google’s $2.1bn bid for Fitbit comes under further scrutiny, as the EU plans to open an investigation into Google’s ability to use Fitbit’s data for enhancing targeted advertising despite Google’s pledge not to do so.
On the whole, a very interesting month for technology, and we look forward to see how things unfold in the coming months and how companies evolve with the pandemic.