Last week, the Dow Jones was down 3%, the S&P 500 lost 3.3%, and the Nasdaq composite fell 4.2%. Cathie Wood’s flagship ARK fund sees biggest monthly outflow in a year of US$820 million in August, just shy of its September 2021 outflow of US$939 million. Softbank Vision Fund is cutting 100 jobs. Snap is planning to lay off approximately 20 percent of its more than 6,400 employees, according to people familiar with the matter. U.S. regulators to vet Alibaba, JD and, other Chinese firms’ audits. Warren Buffett’s Berkshire Hathaway sold shares in Chinese EV maker BYD for the first time in 14 years – and rakes in a 3,400% profit. Shares of Pinduoduo shot up 7.4% in premarket trading Monday, after the China-based company that connects agricultural producers with consumers reported second-quarter profit that more than tripled and revenue that rose well above expectations, citing “a recovery in consumer sentiment.” Twitter stock falls after Elon Musk sends another merger termination letter, for different reasons than the first one. MicroStrategy stock falls after DC AG sues CEO for tax fraud. iPhone US market share hits all-time high, overtaking Android; dominates global premium sales. OnlyFans, the adult content site best known for explicit content, reported revenue soared 160% to US$932 million year-over-year, according to financial results for the year ending November 2021. Netflix is seeking to charge advertisers top dollar of roughly US$65 for reaching 1,000 viewers, a measure known as CPM, or cost per thousand. Nvidia, AMD warned of new US export restrictions on AI chips. Shortage of 50-cent chips holds up US$50,000 cars, TSMC chief says. Micron Technology is investing $15 billion in new plant in Boise, Idaho. Honda and LG Chem will build a US$4.4 billion EV battery factory in the US. Bosch to invest US$200 million in US fuel cell production for electric commercial trucks.
Canadian Technology Capital Markets & Company News
BlackBerry’s (BB-NYSE, BB-TSX) US$600 million patent sale in doubt as Canadian-led lending syndicate bails.
BlackBerry Ltd.’s deal to sell most of its patents for US$600 million has fallen apart after lead financier Third Eye Capital abandoned the transaction this month. Waterloo, Ont.-based BlackBerry announced in late January that Catapult IP Innovations Inc., a Baltimore-based, Delaware-registered entity had agreed to buy the patents with US$400 million of conditional debt provided by a syndicate led by Toronto-based Third Eye that included an unnamed Canadian pension fund. Catapult, formed in 2021 specifically to buy the assets, needed to raise US$90 million in equity to access the loan and complete the deal. In May, Las Vegas-based intellectual property analyst Samuel Baird delved into the potential value of the divested BlackBerry portfolio, totaling 37,175 patents, which would be one of the largest such transactions in the past decade. Mr. Baird said in an online report the cost to the buyer could exceed US$900 million including estimated associated maintenance costs, prosecution fees and litigation costs. https://tgam.ca/3KxieVz
Shopify (SHOP-NYSE, SHOP-TSX) adds to recent layoffs while boosting pay for many remaining employees.
Shopify is extending its wave of layoffs while boosting pay for many of its remaining employees amid a restructuring that saw the Ottawa-based e-commerce company shed a tenth of its work force in late July. About 70 employees have been let go in August, according to three people familiar with the situation. The Globe and Mail is not identifying the sources because they were not authorized to discuss the matter publicly. Even after accounting for the job cuts in July, the 70 layoffs represent less than 1 per cent of the company’s total work force. But the additional layoffs further highlight Shopify’s sudden reversal of fortune and employment growth in recent years. Shopify grew from about 5,000 employees and contractors in 2019 to roughly 7,000 in 2020 and about 10,000 as of Dec. 31, 2021, a U.S. Securities and Exchange Commission filing shows. The layoffs this year suggest the company now has about 8,800 workers left globally. https://tgam.ca/3KI0A1q
Shopify (SHOP-NYSE, SHOP-TSX) owes US$40 million in web-technology patent case, jury says.
E-commerce platform Shopify Inc owes patent holder Express Mobile Inc US$40 million for infringing three patents related to mobile-website technology, a Delaware jury said in a verdict made public Thursday. The federal jury on Wednesday awarded Express Mobile a lump sum and rejected Shopify’s argument that the patents are invalid. Express Mobile has sued dozens of tech companies for allegedly infringing the same and other patents, including in ongoing cases against Google, Meta and Amazon. A Shopify spokesperson said Thursday that the company was “disappointed and surprised” by the verdict but is confident that it does not infringe and “intends to pursue the matter in the district court or, if necessary, on appeal. “Express Mobile owns patents related to internet and mobile technology developed by the company’s founder, former IBM engineer Steven Rempell. The company argued that Shopify’s website-building tools infringed its patents, which relate to software for providing content to mobile devices. https://reut.rs/3wQdAfH
WonderFi (WNDR-TSX) to acquire Blockchain Foundry in all-stock deal.
Despite the ongoing crypto winter, WonderFi remains active in its acquisition strategy, entering an agreement to acquire Toronto-based Blockchain Foundry (BCF) in an all-share deal. WonderFi said it expects around 26.2 million of its common shares to be issued to shareholders of BCF as consideration, representing approximately 13.4 percent of the issued and outstanding shares of WonderFi. A spokesperson for WonderFi told BetaKit that BCF’s acquisition is worth around $12.6 million. BCF’s acquisition, according to the company, will add immediate scale to its product suite through WonderFi’s user base across its Bitbuy and Coinberry platforms. WonderFi recently submitted an application to list its common shares on the Nasdaq Capital Market, citing plans to accelerate its international expansion strategy, as well as attract global institutional and retail investors. In March, WonderFi closed its acquisition of Bitbuy in a deal worth US$206 million. It later completed its purchase of Coinberry in July, allocating US$38.5 million in WonderFi stock for the transaction. As of June, WonderFi reports it has US$356 million in total assets, including US$15 million in cash and $5.6 million in crypto assets and inventory. It also holds US$187 million of Assets Under Custody for customers. https://bit.ly/3BabSZg
BuildDirect (BILD-TSXV) announces private placement of up to $3 million and key changes to senior management.
BuildDirect announced a Private Placement of up to approximately 6,522,000 common shares at a price of $0.46 per Common Share for total gross proceeds of up to $3,000,000. Pelecanus Investments Ltd., Lyra Growth Partners Inc. and Beedie Investments Ltd. will participate in the Private Placement. Closing of the Private Placement is expected to occur in multiple tranches within the next 30 days and is subject to various conditions, including approval of the TSX Venture Exchange. No finder’s fee is payable in connection with this financing. Pelecanus, Lyra and Beedie are insiders by virtue of currently holding 37.7%,12.9% and 11.4% respectively of the issued and outstanding common shares of the Company on a partially diluted basis. https://bit.ly/3cDei9d
Supply chain analytics SaaS startup Lytica secures over $13 million in Series A round.
Ottawa-based SaaS startup Lytica has secured over $13 million in all-equity financing for its Series A round. The investment was led by growth equity firm Resolve Growth Partners with participation from York IE. York IE is a return investor for Lytica as the venture firm also invested $1.5 million into Lytica last year. Lytica also received $1.08 million in debt financing from FedDev Ontario in 2020. Lytica is among a number of Canadian tech companies that want to increase their share in the global supply chain analytics market, which was valued at US$5.26 billion in 2021. https://bit.ly/3wKMXbO
Canadian-founded healthtech startup Power emerges from stealth with $7 million.
Healthtech startup Power has exited stealth with $7 million in seed funding jointly led by Footwork and CRV, with additional investments from Artis Ventures, South Park Commons, and AirAngels. https://bit.ly/3R5Z0IR
LumiQ raises $5 million to expand CPA training podcast platform to US.
Toronto-based EdTech startup founded in 2016, LumiQ (formerly Luminari) aims to “make professional education enjoyable.” To date, the startup has amassed a list of over 300 company clients that include Deloitte, Purolator, First Capital Realty, and The Beer Store. The all-equity round closed earlier this month and consisted of an undisclosed combination of primary and secondary capital, the latter of which went to LumiQ employees and previous investors. Part of what’s notable about LumiQ’s journey is that the startup has now raised $7.4 million in total funding while eschewing the institutional VC route. https://bit.ly/3KvIHmr
SureBright raises $3.2 million to reinvent retail insurance.
Insurtech startup SureBright has secured a $2.5 million pre-seed round to hire more staff and build out its embedded insurance and warranty solution. The startup’s solution enables any e-commerce merchant to begin selling insurance and warranty products in their stores in under 15 minutes. SureBright has already embedded its app with three Shopify merchants, but sees the potential for growth. Motivate Ventures led the round with participation from Panache Ventures, Plug and Play, Insur-Tech Fund NYC, and Wicked VC. The round closed in August. While SureBright claims it doesn’t have any competitors in Canada, only in the United States, at least one other Canadian startup is providing insurance-as-an-API. Briza raised a $10.2 million Series A round in 2021 as the startup aimed to meet demand for its insurance carrier integrations. https://bit.ly/3CJ7p0P
Clearco cuts international staff as it retracts presence, announces new partner.
The $2 billion company is now focused on its home turf. Clearco, a Toronto-based fintech capital provider for online companies, is walking back the international expansion it once touted as the future of the company. One month after cutting 25% of its total staff, Clearco is conducting another round of layoffs as it retracts its international presence in the U.K., Germany, Ireland and Australia. Clearco, meanwhile, will return to focus on its two biggest markets: the United States and Canada, which both account for 80% of its activity. To give you a sense of scale, Clearco invested over $3.2 billion in companies across the world, but only $429 million – or 13% – of that activity was in companies outside of those core two markets. The company partnered with FirePower last year to expand its check-writing ability to back the two markets. It’s a move that isn’t all too surprising for those who have been following the SoftBank-backed unicorn. https://tcrn.ch/3cGgw7D
Roblox acquires gamified employee engagement platform provider TriplePlay.
Toronto startup TriplePlay (formerly Lobby) has been acquired by international gaming giant Roblox for an undisclosed amount. TriplePlay co-founders Mark Hlady (CEO) and Yuri Takhteyev (CTO) announced the acquisition on Friday, after two years of building the startup’s platform. Founded in 2020, TriplePlay develops virtual gamified social events for companies that want to boost event attendance and employee engagement in remote and hybrid work environments. Its platform has built-in games, chat rooms, trivia, and the option for live entertainment. The startup has worked with clients like Deloitte, KPMG, Telus, Certn, and HiMama. TriplePlay previously raised around $1 million in seed funding from Goodwater Capital, N49P, Box One and angel investor Charlie Songhurst, former head of strategy at Microsoft, in December for initial operations and salaries. https://bit.ly/3KGbFjE
Global Markets: IPOs, Venture Capital, M&A
Cathie Wood’s flagship ARK fund sees biggest monthly outflow in a year.
Cracks are beginning to form in the resiliency of Ark Invest’s retail-driven shareholder base, as its flagship fund suffers its biggest outflow in nearly a year. The Ark Invest Disruptive Innovation ETF saw outflows of US$820 million in August, just shy of its September 2021 outflow of US$939 million, according to data from VettaFi. The about-face could mark the beginning of a reversal of a more than year-long trend in which Ark saw positive inflows from its investors despite flagging performance. Year-to-date, the flagship ETF has seen about US$1 billion in inflows. Ark Invest CEO Cathie Wood has chalked up the resiliency of her investor base to Ark’s practice of being transparent with its investment research and long-term views. But now investors may be growing tired of the consistent underperformance in the once-hot thematic ETF. Since its peak in February 2021, Ark’s flagship fund has lost 75%, as a series of aggressive interest rate hikes from the Federal Reserve and elevated inflation concerns put a big dent in longer-duration stocks that are not yet profitable. Ark’s flagship fund has lost 56% year-to-date, more than double the Nasdaq 100’s decline of 25% over the same time period. Despite the recent outflows and poor performance, Ark Invest still commands a sizable investment base relative to other thematic ETF providers. Ark’s flagship fund has US$8 billion in assets under management, a considerable amount despite its sizable fall from a peak of about US$28 billion in early 2021. https://bit.ly/3CQB08m
Softbank Vision Fund cutting 100 jobs.
Softbank Group Corp. is planning to cut at least 100 jobs or 20% of its staff at the technology firm’s Vision Fund, Bloomberg reported Friday. Citing people familiar with the firm, the news service reported the positions will be reduced in the U.S., China and the U.K. The moves come after founder Masayoshi Son said he would carry out job cuts at the technology investment firm. Last month, Softbank disclosed its Vision Fund surrendered about US$40 billion in gains in the year ended June 30. U.S.-listed shares of Softbank have fallen 18.4% in 2022 compared to a 24.7% drop by the Nasdaq and a 16.8% drop by the S&P 500. https://on.mktw.net/3cMYd0B
Snap plans to lay off 20 percent of employees.
Snap is planning to lay off approximately 20 percent of its more than 6,400 employees, according to people familiar with the matter. The layoffs, which Snap has been planning for the past several weeks, will begin on Wednesday and hit some departments harder than others, the people said. For example, the team working on ways for developers to build mini apps and games inside Snapchat will be severely impacted. Zenly, the social mapping app Snap bought in 2017 and has since run separately, will also see deep cuts. Another team that will see layoffs is Snap’s hardware division, which is responsible for its AR Spectacles glasses and the Pixy camera drone that was recently canceled after being on sale for just a few months. The company’s ad sales organization is also being restructured with Jeremi Gorman, Snap’s chief business officer, departing to run ads for Netflix. Though the scale of the layoffs is significant, it shouldn’t necessarily come as a surprise: Snap’s stock price has lost nearly 80 percent of its value since the beginning of this year, and the company said in May that it would slow hiring and look for ways to cut costs. It then delivered dismal earnings for the second quarter and said it wouldn’t forecast results for the third quarter. https://bit.ly/3CWlwQy
U.S. regulators to vet Alibaba, JD.com, other Chinese firms’ audits.
U.S. regulators have selected e-commerce majors Alibaba Group and JD.com among other U.S.-listed Chinese companies for audit inspection starting next month, people with knowledge of the matter said. The selection follows a landmark audit deal between Beijing and Washington on Friday allowing U.S. regulators to vet accounting firms in mainland China and Hong Kong, potentially ending a long-running dispute that threatened to boot more than 200 Chinese companies from U.S. stock exchanges. The tech duo along with Yum China Holdings — owner of KFC, Taco Bell and Pizza Hut restaurants in China – have been notified that they are among the first batch of Chinese companies whose audits will be inspected in Hong Kong by U.S. audit watchdog, the Public Company Accounting Oversight Board (PCAOB), the people told Reuters, declining to be identified due to confidentiality constraints. https://reut.rs/3cHWGJg
Warren Buffett’s Berkshire Hathaway sells shares in Chinese EV maker BYD for the first time in 14 years – and rakes in a 3,400% profit.
Warren Buffett’s Berkshire Hathaway has trimmed its BYD stake for the first time in 14 years, a Hong Kong Stock Exchange filing revealed Tuesday. The famed investor’s conglomerate sold about 1.3 million shares of the Chinese electric-vehicle maker for around US$47 million last week. The disposals reduced its position from 220 million shares to 218.7 million shares, the filing shows. Berkshire originally spent US$232 million for 225 million BYD shares in 2008, and reported that position was intact at the end of December. It’s unclear why it was listed as 220 million shares prior to this month’s sale. Buffett’s company paid about US$1 per share when it first invested in BYD. It just sold less than 1% of its stake at an average price of US$35, representing a roughly 3,400% profit on those shares. Its remaining shares were valued at around US$7.3 billion as of Tuesday’s close, meaning the company has notched an unrealized gain of over US$7 billion on its investment. https://bit.ly/3Twifgl
Pinduoduo stock shoots up after profit more than triples, as consumer sentiment recovers.
Shares of Pinduoduo Inc. shot up 7.4% in premarket trading Monday, after the China-based company that connects agricultural producers with consumers reported second-quarter profit that more than tripled and revenue that rose well above expectations, citing “a recovery in consumer sentiment.” Net income grew to RMB8.90 billion (US$1.33 billion), or earnings of RMB6.22 per American depositary share (ADS), from RMB2.41 billion, or RMB1.69 per ADS, in the year-ago period. Excluding nonrecurring items, adjusted net income was RMB10.78 billion. The FactSet consensus for earnings per ADS was RMB2.96. Revenue climbed 36.4% to RMB31.44 billion (US$4.69 billion), beating the FactSet consensus of RMB23.93 billion. Revenue from online marketing services jumped 39% to RMB25.17 billion and revenue from transaction services soared 107% to RMB6.22 billion, while revenue from merchandise sales dropped 97% to RMB50.7 million. Cost of revenue rose just 0.8%, to boost gross margin to 74.7% from 65.7%. The stock has rallied 19.2% over the past three months through Friday, while the iShares MSCI China ETF has ticked up 0.3% and the S&P 500 has slipped 2.4%. https://on.mktw.net/3CLRej1
Twitter stock falls after Elon Musk sends another merger termination letter, for different reasons than the first one.
Shares of Twitter Inc. fell 1.4% toward a five-week low in premarket trading Tuesday, after Tesla Inc. Chief Executive Elon Musk sent a letter “formally notifying” Twitter that he was terminating the merger deal, for different reasons than those given in the July 8 termination letter. Tesla’s stock jumped 2.3% in premarket trading. In a letter delivered to Twitter on Aug. 29, Musk mentions allegations known to Twitter before July 8 but undisclosed to him, that came to light after the Washington Post published a whistleblower report alleging “far-reaching misconduct” at Twitter. Musk said the report is likely to have “severe consequences” for Twitter’s business. “The facts supporting these breaches, which were withheld from the Musk Parties but known to Twitter as of the date of the Merger Agreement and at the time of the July 8 Termination Notice, provided additional bases to terminate the Merger Agreement as of that date and provide additional bases to terminate the Merger Agreement today if the Musk Parties’ termination of the Merger Agreement pursuant to the July 8 Termination Notice is determined to be invalid for any reason,” the Musk letter said. Twitter’s stock has slipped 0.3% over the past three months through Monday, while Tesla’s stock has shot up 12.5% and the S&P 500 has lost 3.15. https://on.mktw.net/3KHhihl
Roper Technologies buying Frontline Education from Thoma Bravo for US$3.73 billion.
Roper Technologies Inc. said Tuesday it agreed to buy cloud-based software company Frontline Education for about US$3.725 billion in cash from seller Thoma Bravo LP. The transaction is expected to close in the fourth quarter. Roper Technologies said Frontline is expected to generate about US$370 million of revenue and $175 million of earnings before interest, taxes, depreciation and amortization (EBITDA) in 2023. Malvern, Pa.-based Frontline Education describes itself as a leading provider of administration software purpose-built for K-12 educators. Roper Technology shares are down about 16.8% in 2022, compared to a 15.4% loss by the S&P 500. https://on.mktw.net/3R9lpVI
Microsoft faces questions from UK regulator over Activision deal.
Microsoft’s deal to acquire Activision Blizzard could violate UK antitrust rules, a government watchdog said on Thursday. The two companies now have five working days to answer regulators’ questions before the investigation escalates to an independent review panel, which could move to block the deal if they find that it would suppress competition. The UK’s Competition and Markets Authority, which began investigating the deal in July, said the deal could allow Microsoft to limit how Activision’s popular games like Call of Duty and World of Warcraft are offered on other platforms in order to promote its PCs and Xbox consoles. The watchdog also said Microsoft’s Azure business could gain an unfair advantage in the growing cloud gaming market. In response, Microsoft gaming CEO Phil Spencer said in a statement Thursday that Microsoft has committed to make Call of Duty available on other consoles as soon as it’s available for the Xbox, and that the company “will continue to engage with regulators with a spirit of transparency and openness.” It’s rare for the CMA to investigate or block deals, but the agency has shown that it’s willing to scrutinize recent acquisitions by tech giants. The regulator last year instructed Facebook parent Meta to sell Giphy, which it acquired for US$315 million the year prior. Meta is appealing the decision. Microsoft has faced growing antitrust scrutiny from regulators on both sides of the Atlantic — in response to pressure from the EU’s European Commission, the company said last week that it would make it less expensive for customers to run Microsoft software in non-Microsoft cloud environments. Meanwhile, the Activision deal is under review by the US Federal Trade Commission, which is also weighing how Microsoft would collect user data and the deal’s potential impact on the job market for game developers, The Information previously reported. https://bit.ly/3CWtlWm
UBS, Wealthfront agree to terminate planned merger.
UBS Group AG and online wealth adviser Wealthfront said the two companies have agreed to terminate their merger agreement. Wealthfront, which primarily focuses on millennial and Gen-Z investors, was to be acquired by UBS Americas Inc. The deal was planned to expand UBS’s existing offerings through the firm’s Wealth Advice Center and its Workplace Wealth Solutions business. UBS said Friday it would purchase a US$69.7 million note convertible into Wealthfront shares. Wealthfront will remain an independent company while continuing to find ways to work with UBS, said Wealthfront Chief Executive David Fortunato, adding that the company would be cash flow positive and profitable on an adjusted basis in the next few months. https://on.wsj.com/3CT9l6X
MicroStrategy stock falls after DC AG sues CEO for tax fraud.
MicroStrategy Inc. shares fell Wednesday after Washington, D.C.’s attorney general said it was suing the company’s chief executive, Michael Saylor, for tax fraud. MicroStrategy shares fell as much as 6% to an intraday low of US$226. In a tweet, D.C. Attorney General Karl Racine said it was suing Saylor and the company for conspiring to help Saylor avoid taxes. MicroStrategy has yet to respond to MarketWatch’s request for comment. https://on.mktw.net/3RkRES3
Hong Kong-based Intchains to offer 3.58 million ADS in planned IPO.
Intchains Group, a Hong Kong-based maker of chips and software for blockchain applications, filed for an initial public offering on Friday with plans to offer 3.58 million American Depositary Shares. Each ADS is equal to two Class A ordinary shares. The company has applied to list on Nasdaq under the ticker “ICG.” Maxim Group LLC is sole underwriter on the deal. Proceeds of the deal will be used to fund the development of the company’s Xihe and Wangshu platforms, to fund R&D, to establish an operating center in Singapore, to purchase wafers and other raw materials and for working capital and general corporate purposes. “We are a provider of integrated solutions consisting of high-performance ASIC chips and ancillary software and hardware for blockchain applications,” the company says in its filing documents. The company had net income of RMB450.1 million in 2021, or US$70.6 million, up from RMB8.2 million the year earlier. Revenue rose to RMB631.8 million from RMB54.6 million. The Renaissance IPO ETF has fallen 46% in the year to date, while the S&P 500 has fallen 17%. https://on.mktw.net/3BbHYDT
iPhone US market share hits all-time high, overtaking Android; dominates global premium sales.
The iPhone US market share hit an all-time high last quarter, giving it more than 50% of the total US market for the first time ever, according to a new market intelligence report. Apple also dominates global premium smartphone sales, accounting for 78% of the $1,000+ segment worldwide. The 50 per cent landmark the iPhone’s highest share since it launched in 2007 was first passed in the quarter ending in June, according to data from Counterpoint Research. Some 150 devices using Google’s Android operating system, led by Samsung and Lenovo, accounted for the rest. The FT says that while new phone shipments can fluctuate wildly from quarter to quarter, based on the timings on smartphone launches, the active installed base is a more meaningful measure of popularity. The active installed base takes into account the millions of people brought into Apple’s ecosystem through the used phone market, as well as those who use iPhones purchased years ago. https://bit.ly/3APBtVM
Lenovo announces new glasses that work with iPhone.
We’ve been hearing a lot about Apple’s first mixed reality headset, which is expected to be introduced sometime next year. But while that day hasn’t come, Lenovo has announced its newest AR glasses “T1,” which, surprisingly, work with iPhone, iPad, and even Mac. Lenovo Glasses T1 is the company’s answer to making this product category ready for the masses. The design is quite simple, and there’s nothing revolutionary about it. They’re just black glasses with special lenses. In fact, the company sells it as “your personal mobile display solution,” since it only works when connected to another device. The hardware of Lenovo’s new AR glasses is not exactly impressive, but it seems enough for most situations. It has two Micro OLED panels with 1080p resolution each that display Full HD content with a 60Hz framerate. It is also certified for low blue light and flicker reduction for better eye comfort. To make the device cheaper, Lenovo’s new glasses have no built-in processor. Meanwhile, Apple has reportedly been working on two new AR/VR products. In addition to its mixed reality headset, which is expected to cost up to US$3,000 due to its high-end hardware, the company also has plans to introduce its own AR glasses in the future. https://bit.ly/3q4cyZB
Apple has completed hardware tests for iPhone 14 satellite connectivity, but launch depends on partners.
Apple is indeed working on satellite connectivity for the iPhone 14 and completed hardware tests for the feature ahead of mass production, according to Apple analyst Ming-Chi Kuo. Kuo says that Apple has the hardware support for satellite connectivity, but whether the iPhone 14 will support satellite communications depends on “whether Apple and operators can settle the business model.” The iPhone 13 also has satellite hardware, but connectivity was not implemented because “the business model had not been negotiated.” According to Kuo, it is “hard to predict” when the iPhone will offer satellite communication services, but it is expected to happen “eventually.” When it is implemented, in the iPhone 14 or beyond, satellite connectivity will be used for emergency texting and voice services. Bloomberg’s Mark Gurman has said that iPhone users will be able to use satellite connectivity to report emergencies to authorities in areas with no cellular service, and send short messages to contacts in the event of an emergency. https://bit.ly/3Rhf8r4
Next Apple Watch Pro could feature long-rumored satellite functions.
For over a year, it’s been rumored that Apple is working on the ability to bring satellite features to the iPhone. First suggested for the iPhone 13 series, this function may now be available with the upcoming iPhone 14. While this function could help iPhone users report emergencies in areas without cellular service, it’s now been discussed by Apple, bringing this functionality to a new generation of the rumored Apple Watch Pro. The information comes from Bloomberg‘s Mark Gurman in his Power On newsletter. According to the journalist, a new generation of the not-announced rugged Apple Watch Pro could have satellite features. On September 7, Apple will announce the iPhone 14 alongside the Apple Watch Series 8. A new Apple Watch SE and this rugged Apple Watch Pro are also rumored to be announced at the “Far Out” keynote. https://bit.ly/3RpITWG
Meta AI researchers develop ways to read speech from people’s brains.
When people speak, they are thinking about how the words they are going to form with their mouths — and in fact, it’s not necessary to talk at all in order to for the brain to form the activity involved in speech. That’s important because the parts of the brain that control the mouth and the parts that involve understanding and forming language are separate. Researchers at Meta Platform Inc.’s Facebook AI Research Labs have been putting this knowledge along with artificial intelligence to work in order to learn how to assist people who have suffered traumatic neurological injuries that have left them unable to communicate through speech, typing or gestures. https://bit.ly/3KHFWP3
Media, Streaming, Gaming & Sports Betting
OnlyFans revenue rises 160% in 2021.
OnlyFans, the adult content site best known for explicit content, reported revenue soared 160% to US$932 million year-over-year, according to financial results for the year ending November 2021. Performers on the site earned nearly US$4 billion in 2021. The number of creators rose 34% to 2.1 million in 2021 compared to the prior year, while the number of fans surged 128% to nearly 188 million during the same time period. Pre-tax profits exploded to US$433 million, up from $61 million in 2020. In her first interview as CEO, Ami Gan told The Information in April that the company continues to be committed to adult entertainers, despite a short-lived ban of explicit content last year. “We are proud to have adult creators on OnlyFans,” she said at the time. In the interview, Gan, who was previously OnlyFans’ top spokesperson, said lockdowns hit “fast-forward” on a business that was already on the rise and has continued to grow. “A lot of people think, ‘Oh, we just rose to fame over the pandemic,’ which, yeah, we kind of did,” Gan said at the time. She said Latin America in particular is an area where the company is seeing an uptick in creators. https://bit.ly/3TDW6Nf
Big budget blockbusters arrive amid fears of ‘peak TV’.
On September 2, Amazon Prime will release its adaptation of The Lord of the Rings, with an estimated budget of US$465 million for the first season — almost enough to make Top Gun: Maverick three times over. HBO Max’s House of the Dragon — the prequel to Game of Thrones — is reported to have cost US$200 million for the season’s 10 episodes. At Disney Plus, Star Wars: Andor will lead a large slate of new programmes that include a Pinocchio remake, She Hulk, and a spin-off of the Cars franchise. These shows are being served up to consumers at subsidised prices by streaming platforms making record losses. The only profitable exception is Netflix, but the industry pioneer’s market value has plunged almost US$200 billion over the past year because of slowing subscriber growth. Its share price is languishing at a four-year low. The forthcoming crop of new programming was given the green light during a headier time, when Wall Street cheered as streaming services committed lavish sums to compete. But faith in the streaming business model — and investor tolerance for profligate spending — has waned as Netflix’s once-blistering subscription growth has gone into reverse. On top of that, there are growing concerns that inflation will bite into discretionary spending, including on streaming services. Analysts at Morgan Stanley forecast that annual global subscriber growth will slow from 160 million in 2020, when housebound consumers turned to streaming in droves, to just 60 million in 2025. For Warner Bros Discovery and Disney the conditions could hardly be less forgiving as both companies battle for their platforms to break even by 2024. https://on.ft.com/3wWe6Jb
Netflix seeking top dollar for brands to advertise on its service.
Streaming giant aims for Nov. 1 launch of ad-supported tier, ad buyers say. Netflix’s subscriber count fell for the first time in nearly a decade, causing its stock to post its worst one-day percentage decline since 2004. Netflix is looking to charge brands premium prices to advertise on its coming ad-supported platform, according to some ad buyers, a sign the streaming giant is expecting strong interest from companies that have long looked to reach its audience. Executives from Netflix and Microsoft Corp., which is supplying the technology to facilitate the placement of video ads on Netflix, met with some ad buyers last week, some of the buyers said. Netflix is seeking to charge advertisers roughly US$65 for reaching 1,000 viewers, a measure known as CPM, or cost per thousand, the buyers said. https://on.wsj.com/3B4zL4g
Disney explores membership program like Amazon Prime to offer discounts and perks.
The program would be somewhat akin to Amazon Prime, which offers advantages such as free shipping, discounts at Whole Foods and a complementary streaming video service for a monthly or annual fee, the people said. Internally, some executives have referred to Disney’s initiative as “Disney Prime,” although that won’t be the name of the program, one of the people said. Discussions at Disney are in the early stages. It couldn’t be learned how much the company would charge for membership and how long it would take to launch such a program. In the three-month period ended July 2, Disney+ gained 14.4 million new subscribers, bringing its total to 152.1 million. But the company brought down its forecast, saying it expected to have 215 million to 245 million subscribers by September 2024, partially due to losing the right to air popular Indian cricket competitions. In exploring the membership program, Disney has studied Amazon’s program as well as Apple One, which bundles cloud storage, AppleTV+ and Apple Arcade, among other services, for a starting price of US$14.95 a month, some of the people familiar with the discussions said. https://on.wsj.com/3TvckZ4
Facebook is shutting down its standalone gaming app in October.
Just over two years after its launch, Facebook is shutting down the Facebook Gaming app on October 28, 2022. Now, when you open the app, you’ll see a banner stating that the app will no longer be available on iOS and Android after that date. The app also won’t be available on the Google Play Store or the Apple App Store. If you’ve been using the app, you can download your search data before the app is discontinued. It’s not entirely clear why Meta is choosing to shut down the app, but it’s possible that the company may provide some color on its decision in the future. The announcement comes as Meta has been testing new services and killing off old ones. https://tcrn.ch/3B2QPI3
Adtech, Privacy & Regulatory
EU will not appeal court ruling against US$991 million Qualcomm fine.
EU antitrust regulators will not appeal a court ruling scrapping its 999 million euro (US$991 million) fine against U.S. chipmaker Qualcomm because it would be difficult to convince Europe’s top court of the merits, people familiar with the matter said. The Luxembourg-based General Court, Europe’s second-highest, in its June judgment was scathing of the European Commission’s handling of the case, saying procedural irregularities had affected Qualcomm’s rights of defence. Judges also invalidated the Commission’s analysis that payments made by Qualcomm to Apple were anti-competitive because the regulator had not taken into account all the relevant facts. The judgment was a major setback for EU antitrust chief Margrethe Vestager who has handed out billion-euro fines to Alphabet unit Google and opened investigations into Amazon, Apple and Meta as part of her crackdown on Big Tech. The EU competition enforcer in its 2018 decision said Qualcomm paid billions of dollars to Apple from 2011 to 2016 to use only its chips in all its iPhones and iPads in order to block out rivals such as Intel Corp. Vestager faces her next test on Sept. 14 when the General Court will rule on Google’s challenge against a record 4.34-billion-euro antitrust fine imposed for using its Android mobile operating system to squeeze out rivals. https://reut.rs/3AYeLvW
Meta settles Cambridge Analytica lawsuit from users.
Meta reached a settlement with users over allowing third parties such as Cambridge Analytica access to private user data, according to a court filing dated Friday. The terms of the settlement weren’t disclosed but the two sides asked for a 60-day stay of the lawsuit in a California court. While Meta may have settled its case with users, it still has to deal with a lawsuit from the Washington, D.C., Attorney General’s office. Meta also settled a similar case with the FTC in 2019 by agreeing to pay US$5 billion. https://bit.ly/3wTaB66
China’s discount e-commerce giant Pinduoduo launches U.S. shopping site.
Chinese discount e-commerce company Pinduoduo just launched a new U.S. shopping site, in an attempt to replicate the global success of Chinese online fashion retailer Shein. The new site, called Temu, sells everything from clothing and accessories for women to home products and pet supplies at low prices. Its offerings, for example, include a US$6 dress, an US$8 handbag and US$10 sneakers. Pinduoduo’s foray into the U.S. comes at a time when inflation fears continue to weigh on global consumer demand. In China, Pinduoduo, known as a bargain basement app with rock-bottom prices, is one of the largest e-commerce sites competing against Alibaba. While Alibaba recently reported its first-ever revenue decline since it became a public company, Pinduoduo’s revenue jumped 36% in the second quarter, as China’s consumers are becoming even more price conscious amid a looming economic crisis. https://bit.ly/3KJWyW9
Alibaba’s Lazada eyes Europe push to take on Amazon, Zalando.
Alibaba Group Holding Ltd.’s Lazada Group is preparing to make its maiden foray into Europe, building on its success in Southeast Asia to take on rivals such as Amazon.com Inc. and Zalando SE in one of the biggest online shopping markets. Its specific plans will depend on macroeconomic and market conditions, Lazada Group Chief Executive Officer James Dong, 43, told Bloomberg News. But it’s clear Alibaba is intensifying its global ambitions, in part because of rocky economic conditions back home. Dong, one-time business assistant to Alibaba CEO Daniel Zhang, took the reins of Alibaba’s most important international business unit in June after heading Lazada’s Thailand and Vietnam operations. This week, the Chinese parent disclosed it invested US$912.5 million in its Southeast Asian arm — taking the year’s capital influx to US$1.3 billion. “Europe is a very big market obviously and for most of the European brands, their largest retail partner is Alibaba Group because of their sales in China and in other markets,” Dong said in an interview in Singapore. “We go where the brands want us to go.” Lazada’s increasing investments are in a stark contrast to archrival Shopee, the e-commerce unit of Singapore’s Sea, which has been retreating after years of aggressive international push from Brazil to Poland to drive growth beyond Southeast Asia. Shopee pulled out of France as well as India in March, just months after launching its operations in those markets as it tries to boost profitability. Sea has suffered a run of other setbacks this year, including a sudden ban of its most popular mobile game in India. Its shares have plunged about 70% this year as investor appetite for growth stocks waned amid a global equity market downturn. Sea has said it plans to focus on Southeast Asia, Taiwan and Brazil rather than spending aggressively to enter new markets. https://bloom.bg/3wWegQN
Nvidia, AMD warned of new US export restrictions on AI chips.
The U.S. government has issued new export licensing requirements to Nvidia and AMD for export to China and Russia of the advanced GPUs used for AI. The U.S. has begun to impose fresh restrictions on exports of advanced chips necessary for AI-related applications to Russia and China, blocking the sale of the semiconductors that power systems sold by the likes of AMD and Nvidia without a license. Nvidia disclosed Wednesday that it had received a notification from the U.S. government that new licensing requirements are being implemented that affect sales of its advanced line of server GPUs to Russia or China. AMD confirmed that it received a similar notification from the U.S. for its line of GPUs that are suited for performing AI-related computing. Nvidia’s disclosure indicates that the fresh export controls are not aimed at the specific chips themselves but at the performance thresholds that are closely associated with Nvidia A100 processors — the current generation of chips deployed in the field. The controls affect AMD’s competing product, the MI200. https://bit.ly/3q2rhEl
Shortage of 50-cent chips holds up US$50,000 cars, TSMC chief says.
Legacy chip shortages are slowing production on cutting edge Company is building new factories to relieve demand pressure. An endemic shortage of chips costing anywhere from 50 cents to US$10 is slowing down swathes of the US$600 billion semiconductor industry, Taiwan Semiconductor Manufacturing Co.’s top executive warned Tuesday. The persistent deficit of such low-end chips is holding up production in key segments of the supply chain, Chief Executive Officer C. C. Wei told attendees at a tech symposium. ASML Holding NV of the Netherlands is struggling to obtain US$10 chips for its extreme ultraviolet lithography systems, or EUVs, he said. TSMC has dozens of the machines, which are critical for packing more power onto smaller slivers of silicon. Elsewhere, a 50-cent radio chip has been holding up the production of US$50,000 cars, Wei said, without elaborating. https://bloom.bg/3AzBfSL
Micron Technology investing $15 bln in new plant in Boise, Idaho.
Micron Technology said Thursday it plans to invest about US$15 billion through the end of the decade for a new memory manufacturing plant in Boise, Idaho. With anticipated federal grants and credits through the CHIPS and Science Act as well as state incentives, the new fab will create 2,000 direct Micron jobs and more than 17,000 new jobs, the company said. It’s part of Micron’s plan to invest more than US$150 billion around the globe over the next decade in manufacturing and R&D. Micron said the Idaho plant will be the first new memory manufacturing fab built in the U.S. in 20 years. Co-locating the new plant with Micron’s R&D center at the company’s headquarters “will enhance operational efficiency, accelerate technology deployment and improve time to market,” the company said. Shares of Micron fell 2.2% in premarket trades. https://on.mktw.net/3cILmwB
Chinese chip maker SMIC to spend US$7.5 billion on new factory.
Chinese chip maker Semiconductor Manufacturing International Corporation, known as SMIC, said it would invest US$7.5 billion in a project to build a new factory in the northern Chinese city of Tianjin. The latest investment plan by mainland China’s largest contract chip manufacturer comes at a time when the U.S. and China are both ramping up their efforts to beef up their domestic semiconductor industries. Washington recently passed a bipartisan bill known as CHIPS and Science Act, which will provide more than US$50 billion in government funding to beef up domestic chip production in the U.S. The move by SMIC is in line with Chinese President Xi Jinping’s policy goals that include the development of key homegrown technologies, especially chips. The company said in a statement that the new Tianjin factory will have a production capacity of 100,000 12-inch wafers per month. https://bit.ly/3cF4U56
Meta, Qualcomm sign pact on custom virtual reality chips.
Meta Platforms Inc signed an agreement to have chip-maker Qualcomm Inc produce custom chipsets for its Quest virtual reality (VR) devices, the companies announced at a consumer electronics conference in Berlin on Friday. Engineering and product teams of both companies will work together to produce the chips, powered by Qualcomm’s Snapdragon platforms, they said in a statement. The agreement shows the dependency of Meta, known as Facebook until last year, on Qualcomm’s technology even as it tries to develop custom silicon of its own for its virtual, augmented and mixed reality devices. Meta has been investing heavily in technologies like pass-through goggles and augmented reality glasses as it tries to bring to life Zuckerberg’s vision for the metaverse, a concept involving an immersive set of digital worlds. It has relied on Qualcomm’s chips for its VR devices for years, including for its latest Quest2 headset. The chipsets produced through the collaboration will not be exclusive to Meta, but will be optimized specifically for Quest’s system specifications, Meta spokesperson Tyler Yee told Reuters. The agreement covers only VR devices, Yee said, and Meta will continue working to develop some of its own silicon solutions. https://reut.rs/3cEtjYi
Honda and LG Chem will build a US$4.4 billion EV battery factory in the US.
Honda and LG Chem will build a US$4.4 billion electric vehicle battery factory in the US, the latest move to shore up the country’s domestic production to comply with new tax credit rules. Honda and LG Chem will form a joint venture to produce batteries in the US for the automaker’s upcoming lineup of EVs. The two companies aim to begin construction in early 2023 to enable the start of mass production of lithium-ion battery cells by the end of 2025. Honda and its subsidiary Acura have plans to release 30 hybrid, battery-electric, and fuel-cell vehicles by 2030. The factory, which aims to have an annual production capacity of approximately 40GWh, is likely to be located in Ohio, according to The Wall Street Journal. The factory is part of a host of new EV facilities that are expected to come online in the coming years. Globally, battery production is expected to grow from 95.3 gigawatt hours (GWh) in 2020 to 410.5 GWh in 2024, according to GlobalData, a data and analytics company. https://bit.ly/3Q2BoDF
Bosch to invest US$200 million in US fuel cell production for electric commercial trucks.
Bosch said Wednesday it will invest more than USUS$200 million into its South Carolina factory to build fuel cell stacks that will power hydrogen-powered electric commercial trucks in the United States. The South Carolina project is part of Bosch’s plan to invest more than US$1 billion globally to develop fuel cell technologies by 2024. Capital upgrades to the campus will include dedicating about 147,000 square feet of floorspace to manufacture the fuel cell stack as well as support the clean room and climate-controlled environments required for quality-critical processes, the company said. Production of fuel cells at the facility is expected to begin in 2026. The German auto supplier said about 350 new jobs will be created. Bosch said its fuel cells will be used to power electric heavy trucks, including a version of Nikola’s Tre electric semi-truck that is expected to go into production by the end of 2023. Bosch, which invested at least US$100 million in Nikola in 2019, said last year it would supply the company with hydrogen fuel cell modules. https://tcrn.ch/3KEyWCd
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