Category: Links

Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn

Austin Carr, writing for Bloomberg Businessweek , on the state of Foxconn and Wisconsin:

“This is the Eighth Wonder of the World.”

So declared President Donald Trump onstage last June at a press event at Foxconn’s new factory in Mount Pleasant, Wis. He was there to herald the potential of the Taiwanese manufacturing giant’s expansion into cheesehead country. He’d joined Foxconn Chairman Terry Gou and then-Wisconsin Governor Scott Walker to celebrate a partnership he’d helped broker — “one of the great deals ever,” Trump said. In exchange for more than $4.5 billion in government incentives, Foxconn had agreed to build a high-tech manufacturing hub on 3,000 acres of farmland south of Milwaukee and create as many as 13,000 good-paying jobs for “amazing Wisconsin workers” as early as 2022.

[…]

The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least $219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won’t be 13,000 of them.

[…]

A report from the Wisconsin Legislative Fiscal Bureau, a nonpartisan government agency, estimated the state would be in the red on the deal until at least 2042, and even that projection didn’t account for the kinds of increased public-services costs associated with population growth. It also based income tax revenue projections on the implausible assumption that every employee would live in Wisconsin, whereas some would almost certainly commute from nearby Illinois. “There’s no way this will ever pay itself off,” says Tim Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research. He says Foxconn’s incentives are more than 10 times greater than typical government aid packages of its stripe.

[…]

Wisconsin officials apparently didn’t consider Gou’s track record problematic. Instead, they describe the billionaire, who charmed them with stories of his early days selling TV parts in the Midwest, as almost philanthropic. “My impression of him was, what a nice person,” says Scott Neitzel, who led negotiations for the Walker administration. “An extremely genuine, down-to-earth tycoon.” When asked if the state looked at Foxconn’s history, WEDC Chief Executive Officer Mark Hogan says, “We didn’t spend a lot of time on that because, in the end, we got to know these people so well.”

Apple blocks Google from running its internal iOS apps

Tom Warren, writing for The Verge:

Apple has now shut down Google’s ability to distribute its internal iOS apps, following a similar shutdown that was issued to Facebook earlier this week. A person familiar with the situation tells The Verge that early versions of Google Maps, Hangouts, Gmail, and other pre-release beta apps have stopped working today, alongside employee-only apps like a Gbus app for transportation and Google’s internal cafe app.

“We’re working with Apple to fix a temporary disruption to some of our corporate iOS apps, which we expect will be resolved soon,” says a Google spokesperson in a statement to The Verge.

Apple’s move to block Google’s developer certificate comes just a day after Google disabled its Screenwise Meter app following press coverage. Google’s private app was designed to monitor how people use their iPhones, similar to Facebook’s research app. Google’s app also relied on Apple’s enterprise program, which enables the distribution of internal apps within a company.

In an earlier statement over Facebook’s certificate removal, Apple did warn that “any developer using their enterprise certificates to distribute apps to consumers will have their certificates revoked.” Apple is clearly sticking to its rules and applying them equally to Facebook, Google, and likely many other companies that get caught breaking Apple’s rules in the future.

While Facebook’s internal iOS apps are still not functional, both Apple and Google’s statements make it clear that the companies are working together to fix Google’s issues. It’s not clear if Apple is working “very quickly” to help Facebook resolve its internal iOS apps.

Cheddar: Apple Planning Gaming Subscription Service

Alex Heath, writing for Cheddar:

Apple is planning a subscription service for games, according to five people familiar with the matter.

The service would function like Netflix for games, allowing users who pay a subscription fee to access a bundled list of titles. Apple ($AAPL) began privately discussing a subscription service with game developers in the second half of 2018, said the people, all of whom requested anonymity to discuss unannounced plans.

It’s unclear how much the subscription will cost or what kind of games Apple will offer. The service is still in the early stages of development, and Apple could ultimately decide to abandon it.

The company has also discussed partnering with developers as a publisher, according to two people familiar with the talks, which could signal Apple’s ambition to assume distribution, marketing, and other related costs for select games.

An Apple spokesperson declined to comment for this story.

I don’t see this working as a benefit so much for Macs, but for the Apple TV and their mobile devices, similar to how the Nvidia Shield offers a gaming service, it could work.

Morgan Stanley: Buy Apple now before earnings next week because the bad news is already in the stock

Yun Li, writing for CNBC:

The bar is set low for Apple’s earnings next Tuesday so Morgan Stanley says it’s a good time to buy the stock.

“We believe the recent pullback is an attractive entry point given upcoming services launches and shares already pricing in extremely cautious iPhone replacement cycle and average selling price headwinds,” the bank’s analyst Katy Huberty said in a note on Friday.

Apple’s stock has plummeted more than 28 percent over the past three months. Shares of the iPhone maker took a huge hit when it slashed revenue guidance by 8 percent on Jan. 2, blaming the slowdown on weaker sales in China. The stock tanked 15 percent that day.

Morgan Stanley said the Wall Street and buy-side investors have already lowered their expectations for Apple’s December numbers after the guidance, so next week’s numbers will unlikely tank the stock further. All eyes will be on any forecast for the current quarter

I’m sure Apple will bounce back after all their bad news so far this year, but it will be interesting to watch.

NHL develops app to give coaches live stats during games

Greg Wyshynski, writing for ESPN:

In a digital age, NHL teams were still relying on analog approaches to deliver stats and data to coaches during games. One team’s video coach would leave his room with 30 seconds left in a period and run out to print game summaries from NHL.com to ensure that his coaches had them ready for intermission.

“They’re running around corners, printing. That’s what was happening,” said Chris Foster, the NHL’s director of digital business development.

The coaches wanted to innovate the process, and the league listened. The SAP-NHL Coaching Insights App will begin appearing on coaches’ iPads located at the benches and in the dressing rooms — which are currently used for video replays — as early as February.

No more waiting for the printer to churn out stat sheets. The data will now arrive in the hands of coaches as the game is going on, in real time. No more waiting until intermission to analyze the numbers; now, coaches can make informed adjustments to everything, from faceoff choices to ice time, on the fly.

“This will provide real-time data, analytics and metrics to complement the video and give them what they want in the live game environment,” Dave Lehanski, the NHL’s senior VP of business development and innovation, told ESPN. “As far as we know, we’ll be the only sports property delivering real-time video and data to the benches for the coaches and the players.”

[…]

In 2017, the NHL and Apple partnered to build an in-arena, in-game coaching system that allowed teams to review video highlights during the game. The request was made by players and coaches, and the system was well-received.

Over time, coaches began asking about adding real-time stats to the iPads. So the NHL, Apple and SAP began collaborating with bench coaches, video coaches and team analytics analysts to determine what data they’d need during the game to better make decisions, and how best to deliver it.

The result is a clean interface that brings the real-time stats found on the league’s website during games, as well as exclusive features, into the hands of coaches during play.

“There are two stat types across the board that every coaching staff said that, without question, helped them make in-game moment decisions: Time on ice and faceoffs,” Foster said. “With time on ice, you want to manage your top players to make sure they have gas in the tank at the end of the game, or if they’re coming back from an injury.”

For both ice time and faceoffs, the app offers something that the coaches uniformly requested from the NHL: easy-to-read displays. Faceoff success or failure is depicted as a series of green circles with check marks or red circles with X’s, and faceoff percentages can be broken down by where they were held and against whom.

“While coaches consider season performance or career performance, it’s what they’re doing in that game that matters,” said Foster.

Players that are near or over their ice time projection during the game will have their names displayed in red, with a small red triangle with an exclamation point next to their photo — similar to a “check engine” light on a car dashboard.

Apple’s Precarious and Pivotal 2019

M.G Siegler on Apple’s earnings call:

The results are in. Actually, they’re not in. And that was a major problem yesterday for Apple.

You see, the company had to do something they almost never do. They had to revise their earnings guidance.¹ Downward. The stock was halted. Yikes.
Today, the stock is down nearly 10%. Tens of billions of dollars have been shaved off of Apple’s market cap, literally overnight.

The company is now the 4th most valuable corporation in the world. That sounds like a great thing until you remember that until recently, it was the most valuable company in the world — and for much of the past several years, this was the case by far.

Yesterday was a nightmare scenario for any public company. But it’s almost unfathomable that this happened with Apple. For years and years, this is the company that not only beat their earnings guidance (not to mention Wall Street’s expectations) quarter after quarter, they crushed them.

I mean, this is the company which celebrated becoming the first trillion dollar company just this past August. What a difference a few months makes.

Tim Cook’s letter to shareholders on the matter is fascinating. On one hand, he makes a very simple case: chalk it up to China.

A bad economic situation exacerbated by a trade war has created a perfect storm of sorts, undoubtedly for many companies operating in the country. Yet many U.S. companies don’t operate in China the way that Apple does. It’s their third-largest market. So yeah, this was always going to hurt.

On the other hand, all of that could have been explained in one or two paragraphs. Cook’s letter is nearly 1,500 words long.

But it’s worth diving a bit deeper into what’s going on. Or actually, just zooming out a bit, to summarize. Because to me, the interesting bits are about what’s going on with Apple beyond the China situation.

[…]

While the bad miss on the quarterly revenue and the revised statement surprised me, the underlying issues that Cook hints at do not. They point to something we’ve known for years: it was always inevitable that the law of large numbers would catch up with Apple. More specifically, with the iPhone — perhaps the greatest product from a business perspective in history. And that appears to have happened. Finally.

Two paragraphs in Cook’s statement stand out to me:

In addition, these and other factors resulted in fewer iPhone upgrades than we had anticipated.

This is a big deal. Almost mentioned as an aside; love it. And:

While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.

Again, there’s the weaker-than-expected iPhone upgrades data point. But with a bit more detail this time.

[…]

The iPhone has simply been too good of a business. And it’s hard to see what tops it. Certainly in the near term. If Services is to carry Apple in the future, it will likely be only after years of relatively stagnant iPhone revenue growth mixed with a rising overall market. In other words, time and the broader world will have to catch up. And then Apple can have their “Microsoft Moment” — a services-based resurrection of growth.

Read the rest of the article, M.G is spot on with every point he makes.

CNBC talks with Tim Cook

After this “Letter From Tim Cook to Apple Investors”, published yesterday on Apple’s Newsroom:

Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29. We now expect the following:

Revenue of approximately $84 billion

Gross margin of approximately 38 percent

Operating expenses of approximately $8.7 billion

Other income/(expense) of approximately $550 million

Tax rate of approximately 16.5 percent before discrete items

The CNBC interview makes for an interesting watch.

Samsung partners with copycat Supreme brand in China

Stefan Etienne, writing for The Verge:

Samsung is getting criticized by hypebeasts everywhere after it claimed to be collaborating with Supreme; in reality, it partnered with a Supreme rip-off. Samsung is actually partnering with a fake legal brand, a rival company based in Barletta, Italy, that beat Supreme NYC in a court case this summer regarding who can use the brand name in Italy.

[…]

The real Supreme — the New York City-based fashion brand made famous by its box logo, collaborations, and limited-run items — said in a comment to Hypebeast that it is not working with Samsung or opening a flagship store in Beijing. “These claims are blatantly false and propagated by a counterfeit organization,” a spokesperson said.

The two CEOs of the fake Supreme were ushered onstage with confidence during a product launch today. “Youth these days want to show their uniqueness in style … to show off style, we have two brands that begin with S,” said Feng En, marketing head for Samsung China, pointing at the logos of Samsung and Supreme on-screen behind him.

After the stream aired, Samsung China’s digital marketing manager, Leo Lau, clarified in a now-deleted Weibo post that Samsung was not collaborating with the authentic Supreme brand. “We are collaborating with Supreme Italia, not Supreme NYC,” Lau said. “Supreme NYC has no sales and marketing authorization in China, but Supreme Italia has obtained product sales and market authorizations in the Asia Pacific region (except Japan).”

So first, Samsung announces a partnership with Supreme, but wait, it’s the fake Supreme. (-‸ლ)

Google Allo to shut down in March, putting focus on Messages and Duo

Ry Crist, writing for CNET:

Several months after “pausing investment” in the service, Google is officially shutting down Allo, its messaging rival to the likes of Apple iMessage, Facebook Chat and WhatsApp.

The search giant said in a blog post Wednesday that the app will work through March. Until then, users will be able to export their existing conversation history.

“We’ve learned a lot from Allo, particularly what’s possible when you incorporate machine learning features, like the Google Assistant, into messaging,” the post says.

Attention will now shift to Messages, Google’s Android-based messaging app. That comes with a focus on RCS, which is set to give Android users advanced messaging features like read receipts and higher-resolution image-sharing capabilities. Additionally, Google will continue to support Hangouts for group chat and Duo for video chat.

“We’re … ready to take what we’ve learned from Allo and put it to work to make Messages even better,” Google’s post reads. “And by refocusing on Messages and Duo for consumers and Hangouts Chat and Hangouts Meet for team collaboration, we’re focused on delivering a simpler and more unified communications experience for all of you.”

Another one bites the dust when it comes to Google messaging services.