Weekly Market Links [23-29 Aug 2021] Antitrust Interventions Go Global, Robotaxis Rollout, Pfizer Approved
Antitrust Interventions Go Global, Robotaxis Rollout, Pfizer Approved
Macro
Vaccination Schedules
Singapore hits 77%, US at 60%.
Japan crosses 50%, while the Philippines, Thailand and Vietnam see accelerated vaccinations with renewed vaccination supply.
Countries
USA
Pfizer is granted full approval by the FDA as a COVID vaccine. Being the first has its merits, as new vaccine mandates by local governments and businesses can be issued, at least in the US.
This factors for aspects such as increasing the confidence in Pfizer’s vaccine, especially for making this acceptable in certain states for those aged 16 and over.
The implications for this? Companies and states can now mandate employees and citizens to take the vaccination or face certain restrictions or consequences. An example, Delta airlines adds a monthly charge for unvaccinated workers as a “cost” pressure on workers to vaccinate.
Such actions have repercussions; In some industries, workforces have opted to resign due to compulsory vaccination mandates. This would lead to a lack of staff, and service quality is bound to get affected, leading to lost customers.
2. China
Tianjin, a city in China, has asked tech companies such as Alibaba and Tencent to move their data into a state-owned cloud system.
Apart from just cities, there is mounting pressure on Chinese tech giants to conform, adding more costs to operations in adhering to new demands of the government, and giving control back to the state.
China will also set up their own pension company, comprising 17 financial institutions and registering USD$1.72B in capital.
This is aligned with China’s plan to support their three-pillar national pension system, in a rapidly ageing population by the end of the decade.
3. South Korea
South Korea will have their own app store to challenge Google’s Play Store and Apple’s App Store.
Called ONE store, it will be launched globally in 2022, and charge up to 30% less commissions than its counterparts.
Backed by SK Telecom, KT and LG U+, its first market will likely be in Southeast Asia, rumoured to have close ties with a Singapore-based telecom carrier.
ONE Store is also giving cashback to telecom subscribers if they make a purchase on their store - so far, $272M if benefits have been given to about 3 million users through the telecom membership.
Seemingly in a coordinated effort, South Korean legislations are tabled to prevent Apple and Google from charging commissions on in-app purchases.
It is even nicknamed the “anti-Google law”, and it will receive a final vote to restrict these tech giants in South Korea, forcibly creating a market for Korean companies. Are more country-level interventions ahead?
Additionally, South Korea will invest a total of 206B in “next-generation technologies”, consisting of semicons, bio, telecoms and more. It seems that a bulk of the budget goes directly to companies such as Samsung and its affiliates.
Companies
Alphabet / Google
Continues to pay Apple to be the de-facto search engine in Safari on iOS.
Google makes about $50Bn in search revenues from iOS, and ponying up $15bn this year to Apple is a sizable deal.
Last year, it was estimated that Google paid $10bn for this privilege to Apple.
Waymo launched robotaxis for the first time, starting in San Francisco for vetted drivers.
Robotaxis are going to become commonplace in way faster timelines than people imagine.
For comparison, Tesla’s autonomous driving uses solely cameras, whereas Waymo’s uses a combination of radar, lidar and cameras.
Uber and Lyft are testing their own, but may even piggyback that of Waymo’s, thus the ruling in treating drivers/delivery workers as non-employees may not be of much use, if this technology becomes more mature, effectively making driver/delivery a commodity.
In a race to the bottom, it is possible some of these companies are independent start-ups that can license the tech to another, forming lower riding and delivery costs for consumers.
In addition, Waymo will no longer sell its sensor products services to other companies and will be focusing on deploying Waymo drive across ride-hailing and delivery units.
Bytedance
TikTok rolls out its AR experience editing tools, creating new features and experiences that duke it out with Facebook and Snap on AR experiences.
Also related to VR, Bytedance is intending to acquire Pico, a maker of VR headsets to go heavily into AR/VR content in the coming years.
Pico sells to clients based in Asia, Europe and the US, and is China’s largest VR gear maker.
This follows Facebook, Apple and Huawei in making similar moves into the sector.
Apple
Apple’s class-action lawsuit is to be settled. Apple will agree to allow developers to direct their users/consumers to other payment options, partially side-stepping Apple’s app store fees.
Developers do not have to pay Apple commissions in some situations, but not all - it requires their app users to jump through a few more hoops, as commissions will still be taken for payments taking place inside the app.
An ongoing verdict in the South Korean market may take this into account, but on a net-net basis, Apple will see revenues reduced ever so slightly from their Services segment.
Facebook, similar to Alibaba, is also looking at developing products and features for NFTs, alongside its Novi digital wallet product, and stablecoin.
Addressing election-related concerns, Facebook is also forming an Election Commission, to advise and decide on matters such as the viability of political ads, and what to do about misinformation.
This is a move seen to combat concerns from regulators and the public opinion, while also reducing the internal efforts required to try to craft a balanced way to deal with all sorts of issues.
By having advisers ranging from academics, policy experts and regulators themselves, Facebook is playing nice with critics who have blamed the social media giant for a plethora of reasons, and thus the company would not be seen as the “sole decision-maker on political content”.
Microsoft
Microsoft will spend $20B on cybersecurity in the next 5 years, quadrupling its existing spending. This was announced in a security summit meeting with US President Joe Biden and leaders from Big Tech, addressing concerns of their Microsoft Azure cloud vulnerabilities.
Microsoft has announced their push for XBOX cloud gaming, whereby the gaming device itself may not matter in the future- but more of a platform that distributes games.
If this takes off with other game device makers such as Sony and Nintendo, it could be disruptive for hardware makers’ margins, and beneficial for the game developers.
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