The podcast is now available on Apple Podcasts and Spotify.

Apple to be carbon neutral by 2030

Apple has unveiled a plan to become carbon neutral across it’s entire business, supply chain and product lifecycle by 2030, meaning every product Apple sells will have a net zero carbon impact. While today the company’s corporate operations are carbon neutral that doesn’t extend to the supply chain.

As a part of this they will reduce their carbon emissions by 75% while developing new carbon removal solutions for the remaining 25%.

Apple has set out it’s climate roadmap across 5 themes:

* Low Carbon Product Design. Designing products to be recyclable.

* Expanding Energy Efficiency. Identifying new ways to reduce energy usage across their operations.

* Renewable Energy. Maintaining it’s 100% use of renewable energy, and expanding this to it’s supply chain.

* Process and Material Innovations. Improving processes to reduce carbon emissions from product materials.

* Carbon Removal. Investment in nature-based solutions to carbon removal, such as the restoration and protection of forests.

Image: 80% of Apple’s renewable energy is from projects that Apple created.

Climate change and the environment in general has been a hot topic for corporates for some time but only recently has it really been a major item on the board’s agendas. Not only are consumers now extremely environmentally conscious but so too are shareholders.

Socially Responsible Investing (SRI) has increased rapidly over the last few years. Nutmeg, an easy to use consumer investment service, has seen major growth in it’s SRI portfolios which have on average 28% less carbon intensity than their regular portfolios. In a survey 35% of respondents stated that climate change was the cause they care about most, scoring higher than any other such as human right or executive pay.

We’re going to see more and more company’s in every industry looking very closely at climate change and the environment, even those in high impact industries such as oil are shifting significantly in their ways of thinking and operating, towards reducing their impact on the planet.

Affiliate Link

TikTok promises US jobs

Last week we discussed how politicians were weaponising TikTok in their ongoing trade wars with China. This week we’ve seen TikTok increasingly try to distance itself from China and its government with an announcement that it will bring 10,000 jobs to the US. This no doubt in a bid to keep the Trump administration happy.

They currently employ around 1,400 people in the US, already up from 500 a year ago, so this would be a substantial increase, taking place over the next three years.

TikTok have said that “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community's privacy."

They also announced that they are considering London among other places to host its Headquarters outside of China, as well as looking to reorganise its corporate structure to take more of the management outside of China. They have already recruited an American CEO.

It’s clear that TikTok are well on the defensive. They have seen the fate of companies such as Huawei and ZTE and realise they must distance themselves from China if they are to grow and become successful in the west which is a lucrative market with a lot of deep pocketed advertisers.

Affiliate Link

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com

The podcast is now available on Apple Podcasts and Spotify.

In this episode, episode 9, we discuss a new wave of companies removing access to their facial recognition technology for policing and law enforcement and we look at the newly released details of the PS5, one half of what is set to be the hottest competition for Christmas this year.

Facial Recognition in Policing

This is a topic that has a long history of debate and one that isn’t going to be going away anytime soon. It’s a debate that really comes down to ethics and with every new branch of technology or new use of an existing one we must return to the ethics debate. We must adjust our ethics to either accept to reject this new ‘thing’. It’s one which is rarely an absolute yes or no (I suppose there wouldn’t be much debate if it was), particularly when the technology or its use concerns the military or the police.

The debate around facial recognition technology and policing has been heated but on/off for many years, at least since 2015 when Leicestershire Police trialled it at Download Festival, then in 2017 when South Wales began trialling Automatic Facial Recognition at various large events such as football matches, royal visits and of course the annual Elvis festival. Earlier this year in January the debate was revived again when the Met Police started using Live Facial Recognition as part of business as usual following successful trials over the previous few years.

Now, in June 2020, the debate has livened up again. This seems to be largely as a result of the George Floyd inspired protests and new questions around discrimination in policing, particularly around discriminating against people of colour.

This current era of debate has now led to some of the worlds biggest tech companies and providers of facial recognition technology to pull their offerings from policing customers.

The week started with IBM stating that they oppose and “will not condone the uses of any technology, including facial recognition” for surveillance. What they suggested is that policing should make more use of data analytics and other evidence gathering tools such as body cams. We should note carefully here though that IBM has never been very strong in the field of facial recognition but does have a very strong offering in data analysis for policing. There’s no huge surprise that they’ve made this statement and it in fact feels more like a strategic sales pitch than a stand against bad actors.

Image: Amazon Rekognition can give various attributes such as gender and facial features.

Following this we saw both Amazon and Microsoft take a similar stance. Amazon who’s Rekognition software allows developers to easily add facial recognition to any of their software hosted on AWS, was the first to move with a banning of the technology for policing uses for a year. The thought here being that this will give law makers enough time to put together legislation and guidance to ensure that the technology is as free as possible from bias and has checks in place.

Microsoft, who are actually yet to sell any of their facial recognition technology to policing, have said they will not start to sell it the US forces until there is national legislation in place. It can be assumed that this stance applies outside of the US too.

From the perspective of these three companies this is probably a good stance to take. They are shielding themselves from any backlash should their technology be found to be used inappropriately or if found to have any bias, which it quite likely has to some extent. The issue around bias is significantly exacerbated in a policing context where any bias, no matter how small, is unacceptable.

From a much broader perspective though this stance by the worlds leading technology providers is quite concerning. Policing want the technology and have so far proven that it has a value to them. In the UK legislation generally supports its use and there’s precedent from a case with South Wales Police. This means that police forces will be developing the technology along with industry but are now having to do that without some of the biggest and best technology vendors. There could now be a real risk that the technology that’s developed and deployed by policing is subpar and presents an even greater threat of bias and negative outcomes for policing themselves and of course the innocent citizens it potentially impacts.

PS5 Announcement

The biggest battle in the tech world this year got a little more heated this week as Sony released details and images of the upcoming Playstation 5, more commonly known as the PS5. Details of its direct competition, the Xbox Series X, made by Microsoft, were released earlier this year.

The battle between Sony and Microsoft, PS5 vs Xbox, will be the hot topic for this years Christmas season. Expect debates and arguments as to which is the best (hint: their specs are pretty identical) and for parents expect empty pockets.

Image: Xbox Series X on the left, Sony PS5 on the right.

In terms of design the PS5 has garnered mixed reactions with many, myself included, thinking it looks rather like a cheap Wi-Fi router while the Xbox looks a lot more minimalist but perhaps a bit boring.

This will be the first major games console launch since the Xbox One and PS4 were released in 2013, to an equally big fanfare and debate. As with the release then this year it will largely come down to the games on offer. Each having various exclusives and first releases. The PS5 bringing back the much loved Gran Turismo driving simulator while the Xbox will see the hugely successful Halo series return.

Both consoles are disc-free meaning games would be downloaded rather than played from a disc.

Prices for the two consoles are yet to be released but it's expected that they’ll be around £500 and released sometime in October or November in plenty of time for the Christmas season. So with a few games and perhaps an extra controller we’ll most likely be paying towards £700 to get started.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com

The podcast is now available on Apple Podcasts and Spotify.

In this episode, episode 7, we discuss Facebook buying the GIF sharing service Giphy, we look at Clubhouse’s new $100 million valuation and see how Huawei in the UK is getting political again.

Facebook buys GIPHY

On Friday last week Facebook announced that it is welcoming the GIF sharing service GIPHY in to its Instagram team. So basically, they’re buying GIPHY and integrating it in to its Instagram business.

It’s reported that Facebook paid $400 million for GIPHY which is a significant amount of money. However, it’s last valuation back in 2016 when it raised $72m in VC funding it was actually valued at $528m. So it’s seen its value drop by around 25% but there is of course is a difference between a valuation for investment and a valuation for a cash purchase. I think Facebook have probably got quite a good deal on this.

It’s a deal that makes a lot of sense. Facebook’s users already know GIPHY and use it quite a lot. In fact around half of GIPHY’s traffic comes from Facebook, or at least the Facebook family of apps which of course includes Instagram and WhatsApp.

Now a lot of people have talked about this acquisition being all about data. By acquiring the company Facebook now has more data on what people do online and importantly what people do on other platforms as of course GIPHY is used on many of other social networks. But actually I think this is probably a very small part of Facebook’s thinking on this one.

I think this acquisition is much more about the technology and almost the science than anything else. What GIPHY has is a real understood of user sentiment. GIFs have this unique ability to portray people’s feeling and emotions and really allow people to express them and their creativity.

This is particularly prevalent in younger generations who can communicate almost entirely without words. They communicate by pictures, GIFs, videos, memes, all sorts of stuff that isn’t text. So they have a deep understanding of peoples emotions from images.

So what Facebook is really acquiring is this knowledge of people’s sentiment and an understanding of how people are communicating.

Clubhouse gets funded

You may recall in a few episodes back, I think it was episode 3, that we talked about this new app called Clubhouse. It’s a kind of social media app that allows people to spontaneously join voice only groups. It’s worth taking a look at if that’s in your area of interest.

Well that app has just raised its first ever round of venture capital funding. It secured a $10m investment from the well known firm Andreessen-Horowitz at a $90m valuation.

These are relatively modest figures particularly when you compare to them to the Facebook GIPHY acquisition we just discussed but for a company that’s only been around for a few months and whose app isn’t even released to the general public yet it’s quite a sizeable valuation.

This app, Clubhouse, has a lot of people getting very excited, although they do seem to be confined to the tech industry at the moment. It’s reported that there was some steep competition for this funding round with some bids supposedly getting up to $100m.

The concept of the app is really interesting. Spontaneous group voice chats are something that people have started craving since the global lockdown started and people are spending huge amounts of time at home with little interaction with others. Clubhouse starts to go some way to replacing those ad-hoc conversations we have in the office and with our friends in the pub.

This app and it’s no doubt many emerging competitors are definitely worth keeping an eye on.

Huawei out of the UK

It’s reported that the members of the Conservative party in the UK are pushing the Prime Minister, Boris Johnson, to again review Huawei’s involvement in 5G networks in the country.

Earlier this year the government announced new rules that would see Huawei’s market share being capped at 35%. The pressure now is to completely remove them by 2023. It’s a little unclear where these new pressures have come from but it’s likely that members are looking at Australia and of course the USA where Huawei have been completely banned. In a letter to the Prime Minister some weeks ago MPs point towards our apparent over reliance on China.

It seems again that this is an entirely political move without any real thought or understanding of the reality and the true risks supposedly posed by the company.

The telecoms industry in the UK has been desperately trying to get some clarity and direction on this issue which they thought had come earlier this year. For them rolling out networks is extremely expensive with 5G being the biggest investment they’ve ever made. To have this turbulence and uncertainty in their supply market is not good at all.

All of the mobile network operators in the UK have at least some Huawei equipment in their network with, I believe, Three having the most but very closely followed by EE. For them this poses a very difficult challenge.

Huawei produce some excellent equipment at very competitive prices. Most people in the industry recognise that the company is probably about a year ahead of the competition which is Ericsson and Nokia mainly.

I really hope the UK government takes a well balanced evidence based approach to this and doesn't make our telecoms network political. We all rely on them so much.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com

The podcast is now available on Apple Podcasts and Spotify.

In this episode we discuss the scale of job losses in the tech industry and give some depth to the O2 and Virgin merger.

Tech Job Losses

While the tech industry has suffered far less than some others and has in many areas fared very well, as we saw in last weeks episode where we looked at the financial results of the top tech businesses. It hasn’t been completely untouched though as some of its largest companies suffer from huge drops in demand.

Those hardest hit in the tech industry are also tending to be those that cross over in to the hospitality and travel industries which themselves have seen demand reduce to almost zero across the globe.

Uber has announced that it is cutting 3,700 staff, around 15% of its global workforce, not including drivers which are of course technically self-employed. The majority of these job cuts are in their recruitment and customer service teams. Uber has seen demand for rides drop 80% in April. While some regions have seen demand increase again as they come out of lockdown demand is yet to reach pre-COVID levels. With restrictions set to be in place for months to come it doesn’t look like Uber will see demand significantly improve any time soon.

Another of Uber’s businesses, JUMP, which operates dockless bicycles in many major cities such as London is cutting all of it’s 500 staff. This is also related however to their recent acquisition of Lime scooters which itself was about the go bust as people no longer used their small electric scooters to get around city centres.

It’s a similar story with Uber’s rival Lyft where they are laying off 17% of their workforce, equating to almost 1000 people.

One of the most impacted tech companies, Airbnb, is laying off 1900 people, 25% of it’s workforce. As the global travel industry has been reduced to almost nothing it’s no surprise that Airbnb has seen revenues plummet. Interestingly, we’re not seeing cities flooded with regular residential rentals as properties that were previously on Airbnb now have no demand. Landlords are shifting to longer term residential rentals and away from short term holiday lets.

Recruitment is another area that has seen significant falls in demand. Here, one of the major tech players, Glassdoor, has announced that 300 of it’s roughly 1000 employees will be laid off.

As with every other industry there is hope that demand will pickup quickly again in the near future but I remain sceptical. Consumers and businesses are going to be very wary of spending cash and with so many becoming unemployed any cash they do have is going to be reserved for absolute essentials. Travel and hospitality businesses, whether in the tech industry or not, are going to have a difficult year ahead and no doubt we will see more job losses in the industry as a result.

Virgin & O2 agree on a merger

In an industry defining deal Liberty Global and Telefonica will merge their UK telecoms businesses - Virgin and O2 respectively. The deal will create the largest operator in the UK with 46 million subscribers across TV, broadband, home phone and mobile.

The deal values the two companies at just over £31 billion with each company now taking 50:50 ownership of the new venture. Virgin will pay O2 £2.5 billion to enable this split which will be very warmly welcomed by the debt laden Telefonica.

No doubt that this will be the largest merger for some time as COVID-19 looks to disrupt the world for many months to come. While the talks on the deal are believed to have started back in November last year they were seriously slowed by the arrival of the pandemic which forced negotiations online in video calls rumoured to go on in to the early hours of most mornings. With WebEx being the preferred video conferencing tool there were the usual at-home interruptions of pets, children and dinner as top execs negotiated in shorts and t-shirts (why not).

In the early hours of 7th May the deal was finalised. It will not be completed until the summer of 2021 though as it enters regulatory scrutiny.

As discussed in last weeks briefing the combination of the two companies brings huge competition to the UK quad-play market (TV, Broadband, home phone, and mobile) which has been largely dominated by Sky and BT over the years, with BT coming to the forefront as it launched it’s TV service and BT Sport some years ago. This new venture will be slightly larger than BT.

Virgins substantive fibre broadband network and TV service combined with O2’s national mobile network will see it offer a hugely competitive service to the UK market, leaving the likes of Vodafone and Three at the bottom of the pile. The deal also now frees Virgin from its virtual operator contract with Vodafone which was due to start next year. This is another blow for Vodafone who will likely kick-up a fuss with competition regulators. Three have tended to keep quiet on these sorts of matters.

I think this is a great deal for both companies and the UK consumer who will now have another great option for combining all of their telecoms and TV in to a single package. While UK regulators have previously been negative towards mergers in the mobile network space I don’t believe they’ll have the same view with this as the two companies have largely complementary offerings.

If you were sent this briefing by somebody else then please do subscribe yourself to ensure you get it in to your own inbox each week.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com

In this episode we discuss the merger talks between Virgin and O2 in the UK and we dive in to the recent financial results from Google, Apple, Facebook and Amazon (GAFA). Enjoy.

Virgin x O2

Rumours emerged last week that O2 (Telefonica) and Virgin Media (Liberty Global) were in discussions to merge their UK businesses. These rumours were later confirmed by Telefonica.

Now obviously they are still in very early stages of discussion which will go on for many months and may even lead nowhere. Even if they end in a deal there will be huge regulatory scrutiny. This shouldn’t be too bad though as the companies have very complimentary offerings - O2 being a mobile network operator and Virgin being a fixed broadband operator. These offerings should keep regulators reasonably happy as opposed to previous mergers where two mobile operators merging was categorically rejected by the regulators.

Telefonica, the parent company of O2, have played hot and cold with the company in the UK for sometime now, flicking between trying to sell it off and it being a core part of the Telefonica global strategy. Most recently O2 and Three attempted to merge but with being national mobile operators the regulators took a dim view and blocked the merger over competition fears. For Telefonica selling off their British company would give them a good capital boost, enabling them to focus on growing markets. They currently make very little money in the UK given it’s a highly competitive and stagnant market.

In this merger I think there’s going to be much more than just two UK companies coming together though. Both have significant operations in Latin America and I would be hugely surprised if assets in these countries weren't also a part of the negotiation.

For Virgin in the UK a merger with O2 would give them a huge boost in their competition with Sky to be the number one quad-play operator. That’s TV, Phone, Broadband and Mobile. Currently Virgin and Sky are both virtual mobile operators, piggybacking off other networks. Interestingly Sky actually use O2 while Virgin currently use BT/EE, although they’re planning to switch next year to Vodafone. Obviously if this merger goes ahead then Sky will very likely be moving away from O2.

GAFA: The Results

Google, Apple, Facebook and Amazon (aka GAFA) all released their latest quarterly financial results, and they’re pretty impressive.

Google, well their parent company Alphabet, reported revenue for the quarter of $41 billion giving net profit of almost $11 billion. Advertising revenue, their main source of income, was down slightly on what would be expected but still up by 10% compared to the same quarter last year. Of course at the moment companies are significantly reducing their advertising spend which I think will start to show in Google’s finances in the next quarter and probably for the rest of the year. As an example Expedia usually spends around $5 billion each year but expect this year to reduce that to around $1 billion. Now that’s just one of millions of companies in a similar position.

Apple saw equally as impressive figures with revenue for their Q2 of $58 billion. Service revenues grew to over $13 billion. Services is an area that Apple has been trying desperately to make a success as it seeks to move away from their current iPhone cash cow and towards more recurring revenue streams which they typically get form offering services such as Apple Music, iCloud storage, and Apple TV. The company is far less susceptible currently than others such as Google who rely on advertising. With people staying at home they will be spending more on TV & Music, health & fitness trackers such as the Apple Watch, and home office equipment such as new Macs.

As expected Facebook did pretty well in its latest quarter with revenue up 17% to almost $18 billion, almost all of it coming from advertising. Interestingly for Facebook while advertisers are overall spending less, people are spending much more time on the social network, meaning ad revenues have increased. They did state though that they have seen significant reduction in advertising spend which will no doubt be reflected in following quarters. Monthly users, that’s those that logon at least once per month and is a key metric, was up 10% to 2.6 billion people. Profit for the quarter doubled on last year to $4.9 billion.

Amazon too posted excellent results as consumers increase their use of Amazon to buy products, and businesses quickly adapt to Cloud (AWS) to serve their now largely remote employees. AWS revenue was up 33% on last year. Total revenues were over $75 billion but profit was down by $1 billion to just $2.5 billion. Amazon though has never had high profit margins as it has always sought to reinvest the majority of its cash back in to the business, this highlighted by it’s increased spend on technology and marketing. Almost all of their profit now comes from AWS with the retail business making a loss outside of the US.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com

In this episode we discuss some updates on the development of Elon Musk’s Starlink satellite internet technology, we look at how Facebook is getting itself in to India, and provide an update on a new and exciting Wi-Fi standard.

Coming Soon: Starlink

Elon Musk’s satellite internet service has been making headlines over the last week as the satellite constellation has been visible in the night sky across the UK at various times but more interesting is what these satellites are doing and how Elon Musk is developing the service called Starlink.

Earlier this week Starlink launched another set of 60 satellites to bring the total in the constellation now up to over 400. It’s been just less than a year since the first set were launched in May 2019. The plan is for there to eventually be some 40,000 satellites to bring internet to the whole planet.

This has only really been possible due to the huge cost reduction in rocket launches where, again, Musk set the way forward with reusable rockets and thrusters.

It was announced earlier this week that the Starlink service will begin private beta testing in just a few months time with public testing being made available before the end of the year. It’ll take around another 6-8 launches before there’s enough satellites to start the network working properly.

At first, and probably for some time actually, the service will be limited to only certain areas of the planet, initially the higher latitudes towards the poles. The cost will also limit its uses. I would not be expecting this to be used as a day-to-day internet service for the masses, instead being limited to special use cases such as the military, oil rigs and hugely rural areas where it’s just never going to be cost effective to lay fibre. Of course, as the service develops it will no doubt get cheaper and better value for money.

There are, or were at least, some competitors to Starlink which gave some hope that a bit of competition would really push the value for money but the biggest competitor, OneWeb, very recently filed for Bankruptcy. They cited COVID-19 as the main reason but of course this can’t possibly be entirely to blame.

As with many of Elon Musk’s business ventures this feels like something very futuristic - 40,000 satellites giving us high speed internet. I’m certainly looking forward to seeing this be a success, even if astronomers aren’t.

Facebook x Jio

Facebook is paying $5.7bn for a 10% stake in the Indian giant network operator Reliance Jio. Representing Facebook’s biggest investment since it bought WhatsApp for $19b back in 2014.

Jio has over 350 million subscribers with a market share of around 65% so it’s certainly the largest telco in India. To out that in to perspective, EE the largest in the UK, has around 30 million customers. With a population of nearly 1.4 billion India is obviously a very lucrative market and only a fraction smaller than China.

Facebook has been trying to expand out in to East for some time with various attempts in to China where it has entirely been locked out and so India is a very good second choice. They have a growing population with growing wealth and skyrocketing GDP which is about to become greater than that of the UK at just under $3 trillion. Indian’s also seem to love their phones with 1.2 billion phone subscriptions they consume an average of 8.3GB of mobile data each month, on par with the highest in South Korea. Looking at this data they appear to be a very advanced country but of course we know they still have huge growth potential.

This will no doubt be a major factor in Facebook’s investment decision, getting access to all of these customers and their lucrative data will see Facebook continue to thrive even when customers in other parts of the world start falling out of favour with the company. 

I would suggest that this will be the first of many ventures between Facebook and their new partner in India. This investment is largely for relationship building at the moment with a small element of access to customers.

Wi-Fi 6 gets US approval

The US Federal Communications Commission (FCC) gave approval this week for a huge lump of new spectrum in the 6GHz band which will be solely used for license exempt technology. It’s expected that Wi-Fi will be the major user of this.

This is a huge step forward for Wi-Fi technology which for a long time now has been plagued by interference in the current 2.4 and 5GHz spectrum which have limited space available and suffer from interference from things such as microwave ovens and overzealous wireless printers. This new spectrum will bring higher speeds which should now match the higher speeds we get from broadband, into the Gbps. Most Wi-Fi currently operates at a fraction of the actual line speed. More beneficial though should be the lack of interference from other Wi-Fi routers given the huge amounts of space available.

Ofcom, the UK equivalent of the FCC, announced the start of a consultation on the same subject last year and it’s now hoped that this will speed up somewhat.

New Wi-Fi6 compliant routers and user devices such as phones and tablets should start going on sale later this year. One issue though is the shorter range of this higher spectrum. It’s expected that most homes will need a mesh network of multiple routers placed around the home for optimal coverage. At the moment some internet providers offer this, for a price of course. If this becomes the norm then expect our bills to rise.

However, we should all look forward to our new high speed and reliable Wi-Fi service, even if it does cost a little bit more each month.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com

Listen to Issue 1 of The Tech Briefing

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit thetechbriefing.substack.com