Thoughts on Venezuela and the alleged association between social welfare and socialism

Every time free education and healthcare for all is mentioned in the US, the chief criticism is that the proposal will throw the country into socialism and dismay. Critics cite Venezuela as the failed example of socialism and an outcome that the US must avoid. Seeking for the truth, I decided to do a little bit research on Venezuela and what actually took place to see. My intention is to see if the criticism is well-founded. Below are my findings.

What transpired in Venezuela

Dependent on oil, Venezuela’s economy fluctuates in tandem with oil price. In the 1970s, Venezuela was one of the richest countries in the world, due to rising price of the valuable substance. In the following decade, a decline in oil price brought Venezuela to its knees. The economy contracted while inflation rose steadily, hitting its peak of 81% in 1989. In response, the government cut spending, but its effect was almost nonexistent. Half of the population lived under poverty in the latter half of the 1990s. Inflation rate was 100% in 1996. Deadly chaos saw multiple deaths.

In 1992, Hugo Chavez led a failed coup, was arrested and sent to prison for two years. After his release, he ran for the presidency in 1998, vowing to give the power back to the people of Venezuela and use oil money to re-distribute wealth in the country. He won the election in an impressive fashion and with a significant margin.

After the election, Hugo Chavez started social programs that left positive impact on healthcare, education, unemployment and poverty in the country.

  • Unemployment rate went down from 19.2% in 2003 to 9.3% in 2007 and 7.8% in 2009
  • “The most pronounced difference has been in the area of health care. In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. In 1998 there were 417 emergency rooms, 74 rehab centers and 1,628 primary care centers compared to 721 emergency rooms, 445 rehab centers and 8,621 primary care centers (including the 6,500 “check-up points,” usually in poor neighborhoods, and that are in the process of being expanded to more comprehensive primary care centers) today. Since 2004, 399,662 people have had eye operations that restored their vision. In 1999, there were 335 HIV patients receiving antiretroviral treatment from the government, compared to 18,538 in 2006.”
  • Poverty rate dropped from 55.1% in 2003 to 27.5% in 2007
  • “Access to education has also increased substantially. For example, the number of public schools in the country has increased by 3,620 from 17,122 in the 1999/2000 school year to 20,873 in the 2004/2005 school year. By comparison, in the period between the 1994/1995 and 1998/1999 school years, the number of public schools increased by 915. School enrollment has also increased at all educational levels. For example, in the period between the 1999/2000 and 2005/2006 school years, gross enrollment rates for preschool have increased by 25 percent, for primary education by 8.3 percent, for secondary education by 45 percent and for higher education by 44 percent.”

A labor strike in 2003 at PDVSA, a stated-owned oil company responsible for the exploration, production and exportation of oil in Venezuela, severely damaged oil production and hence the economy, with GDP falling 27% during the first half of 2003. After the strike, Chavez also began a plethora of actions to concentrate his power and radicalize his agenda:

  • Fired highly experienced workers at the state-owned PDVSA
  • Eliminated term limits
  • Established a Supreme Court that was friendly to him
  • Oppressed free press
  • Nationalized key industries in the country
  • Imposed subsidies on food and consumer goods
  • Expropriated private companies

The country’s finance relied almost completely on export income, not taxes, dominantly made of oil export income. In 2004, oil price hit $100 and climbed higher in the years after. The hike in oil price allowed Chavez to fund his social programs, nationalization of key industries, foreign borrowing and import of, well, almost everything.

However, oil price started to decline in 2014, throwing Venezuela into chaos. Years of toxic dependence on oil and lack of proper investment in agriculture as well as manufacturing robbed the country of an ability to be self-sustained. Suddenly, the country no longer had sufficient income to finance its import of food as well as consumer goods, and its debt payment. Food and medicines became rare. Inflation went up dramatically. The economy entered a free fall. After Chavez died in 2013, Maduro took over and started his quest for dictatorship. Electoral manipulation, oppression of free speech, censorship and violation of human rights were the hallmarks of Maduro’s reign. Recently, the United States and other countries refused to recognize Maduro as the legitimate leader of Venezuela.

Definition of socialism

The freedictionary website describes socialism as follows:

  1. (Economics) an economic theory or system in which the means of production, distribution, and exchange are ownedby the community collectively, usually through the state. It is characterized by production for use rather than profit, by equality of individual wealth, by the absence of competitive economic activity, and, usually, by government determination of investment, prices, and production levels. 
  2. (Government, Politics & Diplomacy) any of various social or political theories or movements in which the common welfare is to be achieved through the establishment of a socialist economic system

The definitions clearly point out that common welfare alone isn’t enough to label a country “socialist”. It has to come with the state-controlled means of production, distribution and exchange.

Thoughts

That is also the exact reason why the US and Venezuela can’t be more different. While the former’s economy is the epitome of a free economy in the world, the latter’s is tightly controlled by the state. Also, the US economy doesn’t have the level of dependence on oil as Venezuela does. Saying that implementation of free healthcare and education is equal to launching America into socialism ignores completely the difference in the two countries’ economic systems.

Would free social welfare lead to chaos? Advanced countries such as Western Europeans, Australia and Japan provide their citizens with free education and healthcare. Yet, those countries’ economies are anything, but similar to what Venezuela presents. Hence, the alleged association of social welfare and socialism seems ill-founded in my opinion. Instead, the fear mongering and propaganda, I believe, are driven by corporations and individuals whose interests would be in jeopardy with the implementation of free education and healthcare.

Every social system has its strengths and weaknesses. As mentioned above, Hugo Chavez managed to do some goods for his people, a fact that has been conveniently ignored by the media and politicians. Yet, socialism is flawed and the flaws in the case of Venezuela are exacerbated by a colossal failure in governance and management. There was no check on the regime that drifted into an authoritarian. Oil money wasn’t reinvested properly into agriculture and manufacturing, areas that could have made Venezuela more self-sustaining and less dependent on oil.

On the other hand, capitalism isn’t perfect either. While free markets allow for innovation, fiscal freedom and growth, it usually comes with income inequality. Take the US for instance. The top three billionaires own more than the poor half of the country combined. While many Americans don’t have $400 ready for an emergency, the US is home to 25% of the world’s billionaires and more billionaires than Germany, China and India combined.

To have a fair society and strong economy, a balanced mix of socialism and capitalism is better than a lone pursuit of either, I believe. In fact, that’s the model adopted by Western European countries. Social benefits are financed by high taxes in a free market to ensure that the less wealthy have more help and the playing field is more even. While a combination of socialism and capitalism may work in theory, the implementation is guaranteed to have many nuances, given the differences in natural resources, cultures, demographics and other factors in each country. The devil is in the details. Any claim that a social system doesn’t work because of a failed example somewhere else without thorough review of each country’s conditions is false, in my opinion. Sadly, that is usually what happens in the news.

References

Some sources that helped me with this piece:

https://www.cfr.org/backgrounder/venezuela-crisis

https://fas.org/sgp/crs/row/R44841.pdf

https://www.forbes.com/sites/garthfriesen/2018/08/07/the-path-to-hyperinflation-what-happened-to-venezuela/#595ca58d15e4

https://www.aljazeera.com/indepth/features/2017/05/venezuela-worst-economic-crisis-wrong-170501063130120.html

https://www.cnbc.com/2018/05/15/the-countries-with-the-most-billionaires.html

https://www.files.ethz.ch/isn/46713/venezuela_update_2008_02.pdf

Thoughts on Spotify

Spotify’s business model has been straightforward. Take music from the creators, let users have frictionless access to the content and generate revenue by either ads or premium subscriptions. The company delivers music in an appealing and user-friendly manner to the point that listeners agree to pay a premium for access every month. On the other side, Spotify pays royalties back to artists or labels every time a song is consumed. As the user base grows, Spotify generates revenue from advertisers which want to convey their marketing messages to an engaged audience.

Yesterday, the company announced their latest quarterly earnings and I found the report interesting. First, the number of subscribers. Both Premium Subscribers and Ad-supported MAUs increased.

Source: Spotify Data

There seems to be a seasonality in the subscriber acquisition. Subscriber acquisition seems to pick up more in Q2 and Q4 than in Q1 and Q3. The increase in premium subscribers in 2018 slows down, compared to the pace in 2017

Meanwhile, the Average Revenue Per User (ARPU) has been on decline.

Source: Spotify Data

With regard to revenue, it seems that the increase in subscriber count outweighs the decline in ARPU as revenue is on the rise

Source: Spotify Data

Both Premium and Ad-Supported revenues seem to be affected by seasonality. Ad-Supported revenue growth fluctuates more than Premium revenue growth. In 2018, revenue from ads grew faster than subscription-based revenue.

Source: Spotify Data

Gross Margin for both revenue streams went up with Ad-Supported gross margin growing at a faster clip in the last four quarters

Source: Spotify Data

In Q4 2018, Spotify became profitable for the first time. Free cash flow also reached the all-time high

Source: Spotify Data

Based on the numbers, it seems that everything is going in the right direction for Spotify. User base is expanding, revenue is going up, free cash flow is growing and the company becomes profitable for the first time. Even though ARPU has been declining, it’s understandable as many users were acquired on a discount. However, it’s necessary to maintain the network effect and grow the user base to attract advertisers.

As Spotify doesn’t own the majority of their content and it still has to pay a small royalty for content enjoyed by free users, Spotify faces two significant risks. First, it relies too much on the labels that can take their content elsewhere. Second, paying for content while generating zero revenue from free users might hurt the company’s margin. Hence, it needs original content. Already featuring original series with Amy Schumer and Guy Raz, the company now seems to switch its focus on another source of originals: podcasts.

During the earning call, Spotify announced the acquisitions of Gimlet Media and Anchor. The former is a podcast production company and the latter is a DIY tool that allows publishers to produce and broadcast original podcasts. In the call, CEO of Spotify mentioned that over time 20% of content on Spotify will be non-music and that several potential acquisitions which the company is considering in 2019 will all be related to podcasts.

The acquisitions and focus on podcasts make sense in terms of original content and monetization. Podcasts are gaining in popularity as a form of engaging content. Media outlets have podcasts. Companies have podcasts. Celebrities have podcasts. As an audio platform, Spotify certainly cannot afford to sit this one out. Having podcasts, in addition to music, makes Spotify more appealing. During the earning call, Daniel Elk, CEO of Spotify, hailed podcasts’ positive impact on the engagement of users on the platform. He indicated that podcasts could lure users who wouldn’t have signed up for Spotify. Plus, it’s definitely easier to have access to different content forms on one app than multiple apps. And what’s the better and faster way to be able to produce content than to acquire a proven production firm?

There is also the monetization piece. One revolutionary aspect of Spotify is to help obscure and less-known artists to get their creativity out to the world and get paid. The more their songs are listened through Spotify, especially the Discovery, the more dollars the artists receive. Spotify is in a position to do the same for podcast creators. According to a blog post by Anchor, nearly all podcast advertising concentrates in the top 1% of podcasts. The other 99% have to hope that their episodes are downloaded to the tunes of thousands to be able to attract advertisers. If Spotify can help podcasts generate revenue for their work in the same way as it has done for artists, Spotify can become the Spotify for podcasts and stand a higher chance of securing exclusives and originals in the future.

All in all, I think Spotify is going in the right direction. Securing key capabilities through acquisitions in a key area such as podcasts is crucial to future growth.

How big are AWS and Apple Services?

AWS and Services have gained increasing attention in recent years for their role in Amazon and Apple’s growth respectively. I gathered revenue data on both and compared it to the comparable figure of some famous brands. The comparison should put the size of AWS and Services in perspective. The figures were retrieved from the latest available annual reports of the companies.

The two growing business segments of Amazon and Apple generated more revenue than some of the global household names. In the past 6 years (when the data is available), the segments have grown impressively fast. According to my calculations, from 2013 to 2018, the CAGR of Apple Services and AWS is 18.22% and 52.66% respectively.

Thought on Howard Schultz’s alleged presidential run

There has been significant coverage on Howard Schultz’s intention of running in 2020 as an Independent. The coverage, as I have seen so far, has been pretty negative, coming from multiple angles and parties. Most don’t want him to run. The hostility makes me think about the implications of democracy. Specifically, the reaction from Democrats startles me.

In a democratic society, everyone is allowed to voice their opinion and do what is permitted by the laws. Hence, the criticisms and hostility towards Howard Schultz are perfectly fine. What should have been better is the reaction from Democrats, in my opinion. It’s almost a given that Donald Trump, as the sitting president, will be the GOP nominee in 2020. The GOP so far has shown in multiple instances that it is no longer the party of rules, laws and principles as it claims. As a party that advocates democracy and the word is actually part of the party’s name, the Democrats should encourage the principles of a democratic society.

Instead, they complain about the possibility that Independents such as Howard Schultz will take votes away from their candidates and help re-elect Trump. In truth, so many voters in 2016 sat out of the election because they didn’t like any of the candidates from the two main parties. I myself talked to a few of them in Nebraska. Therefore, if voters don’t like your candidates, what difference would having Independents like Schultz make?

Plus, telling Howard Schultz to stand down goes against the principles of democracy. In the time of confusion right now, the Democrats ought to try to emphasize the principles of democracy. Also, they should just stop trying too hard to be relevant such as Elizabeth Warren’s DNA going-nowhere story or her having a beer in the kitchen on Instagram. Instead, work on practical agendas and communication. Convince voters why your candidates should be elected, rather than criticize or discourage those who just exercise their rights.

At the end of the day, there is a price for everything, including living in a democratic society, isn’t there?

Vietnamese Lunar New Year Holiday

Tomorrow will be the official start of the Lunar New Year holiday in Vietnam. It’ll be the third straight holiday that I have missed since I landed in the US 2.5 years ago. Time does fly, doesn’t it?

Contrary to what may be the conventional thinking, I personally don’t think Lunar New Year, or we call “Tet” in Vietnamese, isn’t a great time to visit for foreigners. Big cities will be seriously less crowded since folks go back to their hometown to spend quality time with their families. Meanwhile, folks who were born and raised in big cities such as myself will likely travel somewhere. Hence, big cities become boring and popular destinations become too annoying.

I’ll let you in a little secret. Tet is only truly great during the days leading up to the first day of the holiday. Families gather and hustle to decorate houses and prepare for the holiday. The sense of togetherness is greater than ever during the 365 days of sunsets of the year. After the first day, it’s just formalities and gift-changing for a few days before the normal life kicks in again. In the past, my family used to prepare marinated allium chinense in jars. But my grandmother, mother and aunts are now too occupied and old to do it. Time doesn’t spare anyone in its wake, does it? I missed that time. The tradition is no longer there and there is something missing during Tet.

Cách làm dưa kiệu ngon, trắng giòn, để lâu không hỏng
Source: sieungon

Personally, I like Tet. Growing up in the economic capital of Vietnam, I grow used to and sick of the terrible traffic in the city. 12 million people hustle every day to make ends meet. During Tet, the majority which is made of ambitious immigrants from poorer provinces go home to spend time with family, a privilege of which life strips them during the other 345 days of the year. Hence, traffic is much more pleasant during Tet and I like it.

This will be my 3rd consecutive time missing out on Tet since landing in America 2.5 years ago. This is not my first rodeo, but it sure doesn’t make it any easier. Anyway, I really hope 2019 will be better than it has been to me so far. The calendar will turn pages in about 22 hours. Finger fucking crossed!

Examples of good and bad user experience

Sometimes we run into designs or features that are either a pleasant surprise or leave us with some degree of annoyance, wishing that they could be better. Below are a few I came across today

Bad – Twitter Mobile App

I was strolling down my Twitter app this afternoon and ran into a tweet that was marked sensitive. When I clicked on the message, I was redirected to the web version of Twitter and prompted to enter my credentials to change safety settings. I wonder why that has to be the case. If that’s my phone and Twitter account, why can’t it take place within the app?

Bad – iMessage Search Function

Great at their intuitive design as they may be, Apple still has one feature that annoys me very much: the search function on iMessage. Both the desktop and mobile versions are pretty terrible in this sense. If you want to search for a particular word in messages, get ready to be frustrated. The software only shows the latest message that contains the keyword. It doesn’t show the other messages that contain the keyword. Users have to search through the entire chat history manually.

Good – ASOS Return Label

On Amazon, if you want to return stuff that you bought, but don’t like, the typical process will be like this:

  • Go to your order history
  • Choose the goods you want to return
  • Choose a reason
  • Either print out the label your own or
  • Save a QR code, go to a UPS store, have the store print out the label for you
  • Send the goods back to Amazon

Depending on how you have your stuff delivered in the first place, you may have to print multiple labels for your returns.

On ASOS, the process is much better. In the delivered package that is pretty fast in my experience, they include a printed label already for you. All you need to do is to mark the reasons for return and paste the label on the package.

Good – Apple Verification Code

With the latest iOS, you no longer have to remember verification codes from software providers. When the code is sent to you, a small window will popup on the screen below the field that you are supposed to enter the code to. One touch on the window and the code is immediately passed to the field. No more multiple touches and remembering the code by heart momentarily.

Source: gadgethacks

Apple’s strategic switch

Disclaimer: I do own a few Apple stocks, but it’s nothing major and this post is just to share my observation of Apple. As a fan of business strategy, I have been a fan of the company and interested in how it performs amid the concerns after the letter to shareholders on 2nd January 2019.

Yesterday, Apple announced their Q1 earnings. A few notable points from their announcement and earning call:

  • Apple no longer reports units sold across their business segments
  • Overall, Apple recorded $84.3 billion, down 5% year over year
  • Products gross margin was 34.3% and Services gross margin was 62.8%.
  • iPhone revenue dropped by 15% year over year
  • Services revenue in Q1 was $10.9 billion, a 19% YoY increase. Service revenue grew from $8 billion in calendar 2010 to $41 billion in calendar 2018, allegedly on pace to reach $50 billion in 2020
  • Mac revenue was up 9% while iPad revenue was up 17%
  • Wearables, home and accessories revenue grew by 33% to $1.8 billion
  • There are 50 million paid Apple Music subscribers, up from 40 million reported in June 2018
  • Apple reported a base of 900 million installed iPhones, out of 1.4 billion active devices in total from Apple
  • There are 360 million paid subscriptions across Services portfolio, an increase of 120 million versus a year ago.
  • This quarter saw 1.8 billion transactions through Apple Pay, twice the volume recorded in the same quarter a year ago
  • In Germany, there are more Apple Pay activations in one week than for Android in one year
  • “Revenue from cloud services continues to grow rapidly with year-over-year revenue up over 40% in the December quarter. And readership of Apple News set a new record with over 85 million monthly active users in the three countries where we’ve launched the United States, the U.K., and Australia”.
  • Ending Q1 2019, Apple cash stands at $244 billion while net cash is at $130 billion

I am a big believer in the notion that business models need to be adapted to the changes in the business environment. No business model could be effective while staying still over the years, especially in the fast-changing world that we live in today. Apple should be no exception and from the numbers reported, it seems to me that they are making changes.  

For years, the bulk of Apple’s business has come from hardware which is differentiated by its exclusive software, especially in the case of iPhone. iPhone revenue has made up approximately 60% of Apple’s turnover. However, the luxury smartphone market has reached the maturation point. iPhone unit sale growth has been either minimal or flat for quarters. Greater China market, which makes up 20% of their iPhone revenue, has boasted challenges to Apple, particularly in 2018. Their iOS isn’t as appealing to Chinese users as it is to users in other parts of the world while competitors such as Huawei and Xiaomi offer alternatives with more or less same features at a lower price. The macroeconomic conditions in China and the trade war aren’t helpful either.

The growth in iPhone revenue has come largely from the price hike which lengthens the upgrade cycle and puts a limit on how much Apple can reach out to potential users. Not everyone can afford those pricey phones. Lowering the prices isn’t the solution. Firstly, Apple is a luxury brand. Lowering prices may leave significant damages to its brand power. Secondly, cheaper phones will require substantial changes to its operations, including supply chain, distribution and Sales & Marketing.

All the signs point to the fact that too much dependence on iPhone is no longer sustainable for Apple moving forward. Enter Services.

Services has been a bright spot amid concerns over iPhone revenue for the past 2 or 3 years, growing at a 20% annual clip. Put that in perspective, their Services revenue this quarter alone is $10.9 billion, almost equal to Netflix’s revenue in 3 quarters in 2018 while Facebook Q3 revenue was about $13 billion. Instead of making money from devices, Apple is betting on users keeping devices longer and paying consistently and more for services. And why not? If the users tend to hold on to devices longer, it makes sense to generate more money from their activities. Plus, margin from Services is substantially higher than that of Products.

And they have been doing a good job. Apple Pay transactions reached 1.8 billion this quarter, 100% YoY increase. Revenue from cloud went up by 40%. The number of paid subscriptions grew by 50% year over year and Apple Music has added 10 million users, reaching the 50 million mark and achieving a 25% growth, since June 2018.

As of June 2017, developers earned $70 billion from App store since its launch in 2008. As of January 2019, the figure went up to $120 billion. Moreover, we are about to see their investment in original content as their streaming service is reportedly going to be live this April.

In summary, Apple seems to be heading to the right direction strategically in my opinion, given the changes in the environment they are operating in. I think the following guidance in the next few quarters will continuously be lower than analyst expectations as the reduction in iPhone revenue may not be sufficiently offset by the growth in Services yet. There is a chance that Apple won’t have the same revenue level as they had at the peak of iPhone-dominated era.

Nonetheless, I think the company is far from the demise alleged by some after a letter to shareholders on 2nd January 2019. They generated $84 billion in revenue and almost $20 billion in net income in 90 days! Instead, the change to be a Services company may be better for the company’s health.

Easy guide on how to push code to your GitHub Master branch

This post is a simple guide on how to push your code to GitHub from a command line. I am using a Mac, so it will be a little different for Windows users.

Let’s say if I have a folder called MinhDuong in this directory Documents/GitHub/MinhDuong

Step 1: on your command line, go to the same directory. In my case, it will look like this on my command line

Step 2: set up the remote URL

Basically, you want to make sure you will push the code to the right place. If you have a new repository, run this code:

git remote set-url origin "your repo URL goes here" (without the quotation marks)

If you are updating an existing repo, run “git remote -v” to figure out which repo you’re currently connected to. Here is how it looks on mine, exactly where I want it to be

Step 3: run “git status” to see if there are pending files to be pushed. If you’re pushing to a new repo, this shouldn’t matter much. However, if you are updating an existing repo, this will show the difference between the current folder on your local and the repo.

Step 4: now is the time to add files. If you want to add all files, run “git add .”. Remember the space and the dot after the word “add”.

Step 5: run

git commit -m "whatever comment you want"

Step 6: run

git push origin master

Then you are done.

Book: Monetizing Innovation: How Smart Companies Design the Product Around the Price

If you are interested in business strategies and how companies price their products or services, I highly recommend this book. Its thesis can be summarized into: Product the price, don’t price the product. The authors argued that businesses have a better chance at a successful product/service launch if the businesses do meticulous market research beforehand, figure out the willingness to pay from the end users, find out what they want and how much they are willing to pay for the desired features, and finally build the offerings around the price points. A few notable examples that should be studied by business students include:

  • How Porsche could sell 100,000 of their new cars while Fiat Chrysler could only sell 25,000 of theirs
  • How Michelin switched from selling tires to selling kilometers traveled on their premium tires
  • How P&G rose to capture the majority of market share in the razor category in India
  • How DealShield protected billions of dollars in vehicle purchases and earned Manheim millions in revenue and profit

On Compromise Effect

For example, imagine you are in a wine store and want to buy a bottle. You find three options: a $10 bottle, a $25 bottle and a $40 bottle. Which you would you pick? When asked this question, most people would pick the $25…By introducing the $25 wine, you just made the decision process much easier for everyone. They’ll choose the middle option. This strategy is very common in both B2B and B2C companies

On Anchoring Tactics

Another illustration of anchoring is the Economist magazine’s A/B pricing experiment. The experiment divided people into two groups, A and B. The A group was given two choices: $59 for an online only subscription and $125 for a print and online combination. The B group was offered three choices: $59 for online only, $125 for print only and $125 for the print/online bundle. The $125 print-only option was an anchor. Some 84% chose the print/online bundle in group B versus only 32% who chose that bundle in group A.

On Price Conveys Quality

In a 2008 study, Ariely and his colleagues gave two sets of participants the same pill, telling them it was a painkiller (it was a placebo). Informed that the price was $2.5 a pill, 85% of the participants in the first group said the pill reduced their pain. Told the painkiller’s price was discounted to 10 cents, only 61% of the second group believed the pill reduced their pain.

On Apple Watch

At first, it was available only through Apple’s website and the cheapest version was priced at $349, not very cheap. However, Apple’s launch largely drew negative reactions. One stock analyst noted that a components supplier for the watch had produced fewer units than projected, hinting at underwhelming sales. His comment appeared in a July 31 Wall Street Journal headline that sniped, “Glimmers Emerge on Apple Watch Sales and They’re Not Pretty”

All of this was not what Apple wanted to hear. Yet despite the negative press, despite the warnings of purportedly in-the-know investment analysts and reviewers and the rumors of lagging sales, Apple did not drop its price. It held firm.

Based on International Data Corporation and investment analyst estimates of Apple Watch sales from April through September 2015 (the second half of Apple’s most recently completed fiscal year), Apple sold an estimated 8 million watches. Assuming most sold for the entry price of $349, that would make it a $2.8 billion product in its first six months of life.

GDPR – Positive impact on firms

Last May, GDPR officially went into effect. Under GDPR, users are given more privacy rights and firms have to adhere to stricter privacy regulations than ever unless they want to be subject to hefty fines. Under GDPR, fines can go up to 20 million euros or 4% of a firm’s global revenue. In the case of companies such as Google or Facebook, which earns to the tune of billions of dollars in annual revenue, the fines could be significant.

I have been in favor of GDPR. Even though it’s not perfect as in the case of any laws enacted for the first time, I believe that with GDPR, we are going in the right direction. Below are a few examples:

According to Cisco 2019 Data Privacy Benchmark Study:

GDPR-ready companies are benefitting from their privacy investments beyond compliance in a number of tangible ways. They had shorter sales delays due to customer’s privacy concerns (3.4 weeks vs. 5.4 weeks). They were less likely to have experienced a breach in the last year (74% vs. 89%), and when a breach occurred, fewer data records were impacted (79k vs. 212k records) and system downtime was shorter (6.4 hours vs. 9.4 hours). As a result, the overall costs associated with these breaches were lower; only 37% of GDPR-ready companies had a loss of over $500,000 last year vs. 64% of the least GDPR ready

Ads trackers were reduced, leading to faster loading pages and more pleasant user experience. Big firms are held more accountable. Google was fined $57 million for its GDPR violations. Without the new regulation, I believe that the amount would have been much less. California passed their toughest privacy laws after being inspired by GDPR.

There is an argument that GDPR might lead to less competition in the advertising fields as only the likes of Google and Facebook have the resources to meet the requirements. An initial study seemed to support that.

Nonetheless, I think that even without GDPR, who could challenge Facebook and Google when it comes to serving ads? At least when there are more rights and protection given to the end users, we get some power back to the users and hold firms to a higher standard. After all, innovation comes only from our raising standards, doesn’t it? Hence, GDPR is still a good move in the right direction and should be improved incrementally in the future. As a result, firms should pay more attention to privacy and security. It will no loner be a check-off-the-list item. It will be a competitive advantage moving forward, especially when everything goes digital.