With China market concerns diminishing, technology news last week centered around Apple’s AAPL annual product event, Google’s GOOGL revamped Android Pay Solution, Microsoft’s MSFT distribution relationships with HP and Dell, Yahoo’s YHOO failure to obtain IRS approval for the Alibaba BABA spinoff plus so much more…
Apple’s New Product Event
Apple’s event brought a few surprises, with the new iPhones featuring a better processor, better camera, 3D Touch (by varying the pressure you get to either peek into data or act on it, thus limiting the steps to taking specific actions) and a more efficient Siri.
The all-new iPad Pro is definitely a play for the enterprise market. It’s really big (12.9 inches), thin and light, and comes with a very high resolution display, Apple’s most powerful processor and more than 850K apps specifically designed for it. An all-new stylus called Apple Pencil enables precision actions through sensors that can pick up variations in pressure and slant.
iOS 9 is coming as a free update to older iPhone, iPad and iPod Touch users.
Apple made a statement with the new Apple TV. Based on the all-new tvOS (a derivative of its iOS), it enables Siri integration to voice search programs (by title, genre, cast, crew, rating or popularity) apps, and access sports, stock and weather information. But the focus is definitely on apps with Apple opening the Apple TV App Store and welcoming app developers to the platform to completely overhaul the TV viewing experience. It is also publicizing Game Center for playing and sharing games.
In wearables, Apple announced Watch OS 2, which allow apps to run natively on its Watches without pairing with an iPhone, complications (way for other apps to display information on the Watch face) and Time Travel (to see past headlines and future events among other things). New watch faces and bands, new colors (gold and rose gold for the lower-end Sport) and leather bands for the steel Watch through a partnership with luxury brand Hermès.
Android Pay Launches
First announced back in May, Google’s revamped payments service went into operation last week. The first attempt was unsuccessful because of the lack of support from AT&T, T Mobile and Verizon, which were trying to build a system of their own, called Softcard. But the only thing this achieved was allowing Apple headway in the payments business. Realizing their mistake, they subsequently sold off Softcard to Google and partnered with it. They will now be selling phones that come preinstalled with Android Pay. Others can simply download the app from Google Play Store.
So what exactly is Android Pay? It’s an NFC-based payments system facilitating contactless payments for phones running Android KitKat or higher (that’s the bulk of Android phones being used today). And you can store your credit and debit cards, reward cards, gift cards, etc in it, just like a wallet. Your Android phone gives you a device specific card number, so your information is never disclosed to retailers and others.
You also get a onetime password when making payments, so no one can remotely use your wallet without possession of your device. All payments will be processed through the four major processors: American Express, Mastercard, Visa and Discover. It’s available at a million locations in the U.S. and early partners include Toys ‘R’ Us, GameStop, Panera, Walgreens, Macy’s, Subway and Whole Foods.
Competition: Apple Pay is almost exactly the same, except that there’s a slight difference in waking the screen and a bigger difference in the fact that it allows in-app payments, where Google is yet to rope in a significant number of app makers. Apple Pay works on the latest Apple devices. Samsung Payments allows payments through both existing and NFC-enabled systems and it’s available on the latest Samsung devices. So Android phones from Samsung would have both payments systems.
If you’re wondering whether Google Wallet is dead, no way. Google has made it a separate app for peer-to-peer fund transfers including currency transfers.
Yahoo Denied IRS Approval
Marissa Mayer’s plan to turn over Alibaba value to Yahoo shareholders in a tax free distribution hit a snag last week when the IRS decided not to grant prior approval. Yahoo shares have slid over 29% since May after the IRS said that it was carefully considering special cases of tax-free spin-offs where the operating business was just a small portion of the new publicly-traded company.
Yahoo shareholders were concerned at the time because the operating business forming part of the deal was Yahoo Small Business, which is not much of an operation anyway. Management at Yahoo said at the time that the IRS decision wouldn’t have an impact on the Alibaba spin-off because the request had already been made some time back.
That said, the IRS hasn’t determined that the transaction is taxable, it has simply refused to grant a private letter ruling that would have made the process smooth sailing. Management is now promising careful consideration of its options and legal counsel have reportedly said that they still consider a tax-free distribution possible.
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Apple Prices Euro Bonds: Apple has returned to the euro zone to raise funds for shareholder returns. This time round, the company is paying 1.375% a year for a billion euros maturing in Jan 2024 and 2.00% for another billon maturing in Sep 2027. Lower borrowing rates in the euro zone are attracting U.S. players.
Google Fiber Expands: Google Fiber, which is now a separate operation of Google’s parent company Alphabet, is considering three new locations of its high-speed Internet service (that’s 1gbps, or 100X faster than most existing services). The company has submitted plans to launch the service in San Diego, Irvine (CA) and Louisville (KY) taking the total count to 27 cities. But the plans are in the early stages and details have to be worked out with the local governments.
Google’s plans were originally intended to drive incumbent players to offer faster speeds, so people enjoy staying online more often and get to see more of its ads. It’s not clear yet if this is a profitable business, but Google is going very slow and checking demand before launching in any region.
Media reports indicate that the infrastructure groundwork costs $500 per household and Google charges less than or equal to the amount charged by current ISPs. Google Fiber will have competition in some of these markets since Cox Communications got to Irvine first and is ready to launch in San Diego as well.
Google Returning to China: Google has for long been planning to return to China through its app store and a report last week by The Information says that it will finally happen this fall. Google started in China with its search engine but fell out with the Chinese government over censorship issues and indications of cyber attack by the Chinese government on Gmail users. But the market is just too big to ignore and this time around, Google will see that it keeps the regulators happy. The lure for the government is likely the fact that Chinese app makers selling through the Play Store can reach millions of Android users all over the world.
Oracle Cuts Java Workforce: Social media and some media have noted that Oracle appears to be trimming key personnel responsible for Java, the technology it inherited through its Sun Microsystems acquisition. The rationale for the acquisition wasn’t completely clear until Oracle started suing Google for using without permission some free Java code in its Android OS.
The courts have held that Google did use those lines but it still hasn’t been determined whether it could be deemed fair use since Android is a free OS. Letting important people go at this juncture raises questions about the role Java will play in the company’s future given that Oracle has fallen behind most of its peers in cloud computing and other important growth markets and could be adjusting resources for this purpose.
Amazon, Google Win California Drone Fight: California Governor Jerry Brown has vetoed a bill seeking to restrict drones at over 350 feet when flying over private property. Meanwhile, the FAA, which has sole jurisdiction over airspaces, requires personal or commercial drones to fly lower than 500 feet, thus limiting their area of operation.
Google, Amazon AMZN and such other parties intending to use drones for package delivery and attempting to build an air traffic control system to prevent collisions have protested the bill for the limitation on area and the increased cost of getting permission from private property owners whenever drones fly below 350 feet. With both security and privacy at stake, all Gov Brown can say is that the restriction would have led to “burdensome litigation and new causes of action” (for the flyers).
Regulators Approve Intel’s Altera Merger: The DoJ has reportedly approved Intel’s acquisition of Altera, which is now waiting for approval from European and Chinese authorities. Intel intends to integrate Altera technology into its data center and IoT offerings. The acquisition also offers cost synergies. Altera will benefit from Intel’s advanced process technology, which plays an important role in share gains during technology transitions. The combined company will also be in a position to target more end markets.
Facebook’s New Pages: Facebook FB added a Shopping option for small businesses a few months back and it is now adding Services, where businesses can describe their services and interact with customers. Facebook has made it possible for small businesses to send both canned replies (to standard queries) and private messages to answer even public questions that are important. The increased flexibility and control over their pages is likely to be welcomed by people using Facebook to reach customers. But given Facebook’s huge user base, they are likely a big headache for companies like Yelp and Angie’s List, especially since the market is now rather crowded with Google and Amazon also in the fray.
Streaming TV App Launches on Facebook: Freecast’s Rabbit TV Lite app curates free videos from the web and organizes them into channels for viewers. So the launch of this app on the social network is a big deal for Facebook because it brings a ton of video to the platform that can keep users within its walled garden for longer periods of time and help it earn more advertising revenue.
Of course, this is bad news for YouTube, which is pretty good at offering free, ad-supported video itself. How this will work out in the long run isn’t clear yet because YouTube is one of the main providers of free video and Rabbit TV may have to start paying if it starts getting too successful. But Facebook could simply buy it and integrate the technology, which would be attractive for content creators given its scale.
Google Considering Deliveries
Amazon Planning $50 Tablet: Online retail giant Amazon must be smarting from the Fire phone failure, but the company has wasted no time in jumping deeper into tablets. That’s not surprising given that its Kindle Fire has done reasonably well. Kicking off this new push, the company announced a 6-inch device for $50 in the hopes of getting more users to sign for its services including video streaming and most importantly Prime. Amazon is probably thinking of this device as entry-level (first time users or parents buying for their kids) because it also has larger devices planned (possibly 10-inch and even 12-inch).
A Personal Assistant From Baidu
M&A and Collaborations
Microsoft Wins Over Dell, HP: Microsoft’s push into the BYOD market got legs last week after the company succeeded in cornering Dell and HP to put their sales forces, services and support behind its Surface devices. The company has been very focused on developing Surface tablets and has learnt from past mistakes to launch increasingly useful tablets and convertibles for enterprise use. It is now focusing on distribution, expecting to increase resellers from 150 to 4,500 globally within a few months.
Even Gartner concluded that the tablet and convertible section of the computing market would be the fastest growing this year (up 77% from 2014), so Microsoft is targeting the right segment. The company has also started to see growth in sales albeit off a small base compared to declines at Apple, which indicates that tablet adoption is moving from consumer to enterprise.
Microsoft Buying Cyber Security Firm
Alibaba, Tencent Invest in Uber-Rival Lyft: The ride hailing market is getting extremely competitive, with clear winners not evident yet. The primary operators in China are Alibaba and Tencent through their investment in local player Didi Kuaidi. Tencent has placed its bets on non-Uber services, blocking Uber from its popular WeChat platform, thus giving Didi a competitive advantage. It also, along with Didi, invested in San Francisco-based Lyft, which competes with Uber in the U.S. Alibaba on the other hand has kept its options a bit more open: it was part of Uber’s recent funding round in China where the ride hailing company raised $1.2 billion. But in the U.S., Alibaba also invested in Lyft.
Facebook Releases Some Stats: Facebook has released data suggesting that at the end of June 2015, the company had 15 million monthly active users in Nigeria and 4.45 million in Kenya, two of the most densely populated countries in the content. It also said that 100% of Nigerian users and 95% of Kenyan users connected to Facebook from mobile devices.
The data seems to validate Facebook’s earlier statement that its Internet.org initiative was gathering momentum in Africa. The social networking company also introduced Facebook Lite, a trimmed down version of the app for emerging markets enabling it to launch faster even when there are bandwidth constraints.
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