Weekly reading – 1st January 2022

Happy New Year! No matter where you are in the world, if you come across this little blog of mine, I wish you and yours a great year ahead with lots of health, luck and happiness. Also, with Covid finally behind us! Welcome to my first post in 2022!

What I wrote last week

Review of my 2021

Super Apps

Business

Thanks to podcasts, Spotify is the fastest-growing music service in the US, according to Morgan Stanley survey. “From 2019 to 2021, the streaming giant’s share of the average American’s listening hours increased from 7 per cent to 10 per cent, well behind AM/FM radio and YouTube, but strong among younger consumers who will make up the bulk of listeners over the next decade.”

American Airlines, Saddled With Debt and Growing Pains, Turns to New CEO. “Among airline executives, Mr. Isom is known for drilling down into details. A metric known as d-zero—when flights push back from the gate exactly on time or early—became a rallying cry under Mr. Isom, though it is something American has struggled with at times. Kerry Philipovitch, who worked for Mr. Isom at American until 2019, recalled Mr. Parker and CFO Derek Kerr marveling at how early Mr. Isom arrived at a company event, pointing out his prime parking spot. Ms. Philipovitch said: “That’s Robert. He works really hard. He’s going to get there early.”

Here’s What Happened to Biotech This Year. “Below is the harsh reality laid out in a chart. While the total return of the S&P 500 Index is up 29.4% year-to-date through December 27 (as represented by the SPY ETF that tracks it), the S&P Biotechnology Select Industry Index is down -18.2% over the same period (as represented by the XBI ETF that tracks it). In fact, biotech is the worst performing of any of the 11 S&P 500 sectors this year (note: XBI is equal weighted. Within the biotech community, it is generally believed to represent the performance of typical mid-to-small cap biotech stocks)”

The Super League Debacle Forced Manchester United’s American Owners to Listen to Fans. Football or soccer as it is called in the U.S is a business in which a drought of titles and a period of mediocrity can have major implications. When a club goes without a trophy for a while, great players don’t want to spend precious years at the club. Worse, they go to the competitors to help them win more titles and inflict more pain. The vicious cycle is very hard to break. Manchester United has been in that cycle since 2013, when Sir Alex Ferguson retired. The club hasn’t won a major trophy and it has lost its mojo. Prominent players don’t consider the club in the same breadth as the elite any more. It’s all down to the American club owners who don’t have the right management skill or the football culture in them. Everything is commercial. I am extremely sad to see how the club falls from grace

Apple ditched Intel, and it paid off. Taking control of an important technology stack such as the chips is a strategic masterpiece from Apple. They no longer have to rely on a dinosaur such as Intel while deepening their moat. Who else can compete with Apple in combining one of the most iconic brands in history, hardware expertise, the total control of operating systems, the network of retail stores, the world-class capability in supply chain and now an amazingly efficient chip?

Google and Tech Rivals Tap Cash Reserves to Realize Cloud Ambitions. While Amazon relies on AWS for margin, Google and Microsoft have no shortage of profitable segments to help their cloud departments catch up with a formidable rival. If you are not a first market mover, you gotta use the tools available to you.

Facebook’s Pushback: Stem the Leaks, Spin the Politics, Don’t Say Sorry. Facebook deploying the “divide and conquer” strategy with our lawmakers successfully is just surreal.

A Look Back at Q3 ’21 Public Cloud Software Earnings. A very informative post on public cloud software companies. Have a read if it’s your cup of tea

Other stuff I find interesting

Oscars: ‘Spider-Man: No Way Home’ Team Plans Best Picture Push, Tom Holland Open to Hosting. I am glad that Tom Holland, Kevin Feige and co fought for their work and the work of their colleagues in making these Marvel movies because I find it weird that some don’t consider them “art”. Spider-Man: No Way Home is a great movie. The box office and the online reviews say the same thing. Now that it’s likely a potential for Oscar nominations, would anybody come out and say it’s still not art?

New York City bans natural gas in new buildings. It all sounds well and good on paper for environmentalists as new buildings are banned from using natural gas. However, there are second-order effects as “New York’s move to all-electric buildings could mean a higher price tag for consumers using electricity for heat than those relying on gas. This winter, the average household in the U.S. Northeast is expected to pay $1,538 to heat their home with electricity, compared with gas at about $865. Almost half of the power generated in New York State so far this year came from burning fossil fuels (45% from gas and 4% from oil), with another 24% from nuclear and 22% from hydropower, according to federal energy data.”

In Hamburg, Surviving Climate Change Means Living With Water

Japan’s Paper Culture. “Old, traditional ways of using paper are still prevalent, from the gohei (a paper offering made to gods) in shrines, to the shūgi-bukuro (money envelopes) given at celebrations, and New Year’s cards. In more modern uses, purchases are typically made with cash; important documents are faxed rather than emailed; and nearly everyone uses hanko, a personalized stamp used in lieu of a signature.”

Stats

No new homes in November 2021 were under $200,000

37% of the world’s population have never used the Internet

Holiday spending in the U.S in 2021 increased by 8.5% compared to the same period last year. eCommerce retail spending rose by 11%

54% of adults in the United States have prose literacy below the 6th-grade level“. Prose literacy level refers to the ability to read and comprehend materials such as news stories or manuals.

Walmart drew one in four dollars spent on click and collect — with room to grow in 2022

VRIO – A useful strategy framework to look at a business

If you are looking for a strategy framework to think about a business’ competitive advantages, I recommend VRIO.

The name is an abbreviation of Valuable, Rare, Inimitable and Organized. Essentially, if a firm’s capability or resource is Valuable, Rare and Inimitable, and the firm itself is Organized, it has a sustained competitive advantage. The more sustained competitive advantages a firm has, the more robust its business model is and the more likely it is to succeed. Let’s take a look at a few real-life examples to see how applicable this framework is:

Apple

Apple is arguably the best in the world in combining hardware and software to produce great consumer products. Such a capability is absolutely valuable and rare because we don’t often see that in the market. Samsung or Huawei can make good hardware, but they don’t put hardware and software to harmonious use like Apple does. Google owns Android and is excellent at software, but they aren’t known for their hardware prowess. The fact that some of the biggest companies in the world haven’t been able to copy Apple means that this capability is hard to imitate. Plus, Apple, since Steve Jobs return, has been well-organized to leverage this capability with one P&L to promote singular objectives, the sway that the Industrial Design has or the new multi-billion dollar campus to encourage creativity and collaboration. Lately, Apple has bolstered this competitive advantage further with its own chip M1 and the rumored initiative to design its own 5G cellular chip. It’s precisely the ability to combine humanity, hardware and software that makes Apple products astounding success and itself the most valuable company (as of this writing).

Another advantage that Apple possesses is its world-class supply chain. Not many companies can operate a complex supply network that spans the world and have bargaining power over even powerful players like Foxconn, TSMC or Intel. Imagine that you have to work with suppliers in different countries for different parts, navigate through local regulations, coordinate delivery and transportation, and negotiate pricing while protecting the confidentiality of products. It’s monumentally challenging, but on the other hand, it’s valuable, rare and hard to imitate. Any new rival will have to spend years to put up the same network, and even then, it likely doesn’t have the power of Apple. Additionally, is Apple organized to leverage this capability? Tim Cook, the current CEO, is a supply chain wizard. The company COO, Jeff Williams, is also an Operations guy. The company is one of a few from the West to have a productive relationship with China and its government, despite all the political tension between the U.S and China. This type of relationship can’t be replicated in a short amount of time, if it can be replicated at all. Hence, supply chain is another sustained competitive advantage that Apple has to offer.

Aldi

Aldi is a hard-discounter chain that originates from Germany and came to the U.S in 1976. The former CEO and President of Walmart, Greg Foran, labeled Aldi as “good and fierce”. What makes Aldi so? The discounter’s sustained competitive advantage lies in its long-standing culture and commitment to cut costs and pass on savings to shoppers. Here are a few practices that Aldi employs:

On average, an Aldi store’s size is about 12,000 square feet, compared to Walmart’s 178,000 and Costco’s 145,000 square feet. The smaller size helps drive down either leasing expense (if the land is leased) or depreciation (if the land is owned), as well as energy costs. Regarding SKUs, an Aldi store, on average, carries 1,400 items compared to 40,000 items by a traditional supermarket. The much smaller store size and more limited item selection lead to fewer staff required. An Aldi store usually has only 3-5 employees, a significantly smaller number compared to how many employees are present at a store like Walmart or Costco. The limited item selection enables Aldi to focus on its offerings and negotiate favorable deals with suppliers to keep costs and prices low. Another benefit is that a limited assortment doesn’t require complex marketing promotions, meaning that there will be no cost on marketing materials and labor.

Walking into an Aldi store, you won’t notice many decorations. It looks like an ordinary, no-fancy store and it’s by design to keep costs low. At Aldi stores, there is no free bag. Customers are encouraged to bring their own bags. Carts can only be used with a quarter coin. Customers retrieve the quarter upon returning a cart. This policy has long been part of Aldi’s signature operations. Additionally, customers have to bag their own groceries. A cashier will scan items and put them in a cart, but shoppers will have to take it from there. It speeds up the checkout process, increases efficiency and reduces the need for additional staff. As far as I know, there is no self-checkout.

About 90% of Aldi’s items are private labels. This private label centric approach allows Aldi total control over its selection and reduces the cost as well as complexity that comes with national brands. Private labels used to be unpopular among shoppers due to their cheap image. However, consumer preferences have changed. Astute shoppers, especially millennials, now have a much more favorable view on private labels because they are cheap and provide best value for money. According to Bain, 85% of American shoppers are open to buying private labels.

Source: Onepercentamonth

It’s certainly valuable to pass on savings to shoppers. While the practices themselves may not be rare, the commitment and the culture that enables consistent execution are. The frugal approach that empowers all the little things mentioned above has been nurtured and well-preserved since 1946 when the parent brand was founded in Germany. The only rival that has a similar mentality is Walmart. But the two chains differ in strategies. While Walmart has its hands in numerous cookie jars, Aldi’s bread and butter in the U.S is groceries in small stores with a small number of SKUs. In that segment of the market, I don’t see anyone with Aldi’s expertise and culture. As you can notice, it’s easy to copy a tangible element or an expertise of a business, but it’s much more difficult to replicate the intangibles like culture. Lastly, is Aldi organized? The brand is still one of the best, if not the best, hard discounters in various markets. In the U.S, it has been growing steadily since 1976 and becoming more popular among shoppers. So, I’ll say: yes, it’s organized!

Disney

Disney’s competitive advantage comes from its ability to consistently create excellent content loved by millions around the world. Any production studio can come up with a great movie or show once in a while. Disney is among a handful that can do it consistently. Take Spiderman: No Way Home as an example. It’s on track to net over $240 million in the first opening weekend while being the 27th Marvel movie since Iron Man in 2008. Over the last decade, Disney has dominated the list of highest grossing movies with hit after hit like Avengers: End Game, Captain Marvel, Infinitive War, Black Panther or Star Wars: The Force Awakens. While HBO is known for its quality outputs, even the famed studio isn’t as prolific as Disney. If you think about it, it’s all but nearly impossible to achieve what Disney has done, especially given that it owns the IPs such as Star Wars and Marvel franchise for eternity. Is it guaranteed to succeed long in the future? No. But Disney is more likely than any of its rivals to replicate its previous successes.

Source: Wikipedia

Another competitive advantage that this iconic brand has is its theme parks. Disney’s theme parks attract thousands of visitors around the world every year. As an important source of revenue and margin for the company, and a place for fans to connect with iconic movie figures, these theme parks are certainly valuable. However, they are not easy to create. Any company can pour millions of dollars into building and operating a park, but would they have the brand equity that Disney has with consumers around the world? Would they be able to lure enough visitors to make their park a financial success? To cultivate a brand or a cult like Disney does, a challenger needs to put out iconic content and characters year after year. That in and of itself is a monumental challenge that can’t be done in a few years’ time, if it can be done at all.

In short, VRIO is by no means the only framework to evaluate a business’ strength. We also have Porter’s Five Forces or Value Chain Analysis, just to name a couple. But VRIO is a very useful tool in analyzing a business’ competitive advantages and whether the business is great at anything it does. It’s one of my go-to tools when looking at a firm, as I demonstrated above. Hope this has been helpful for you.

Disclosure: I am long Apple and Disney’s shares.

Weekly reading – 20th November 2021

What I wrote last week

My thoughts on Apple Business Essentials

What I think about Apple Pay & Apple Card

Good reads on Business

HelloFresh: Delivering on Process Power. This episode goes deep into the operational aspect of Hello Fresh. I certainly under-estimated it and its operational complexity.

Macy’s CEO, a department store veteran, fights to fit in the Amazon future of retail. Macy is an interesting case study in which its online presence is so valuable that activist investors want it to be publicly traded alone, separate from the physical stores. “Of the company’s 5 million new customers that came in over the second quarter, more than 40% came to Macy’s digitally, Gennette said on the earnings call. In an effort to capitalize on its most valuable customers — those who shop at Macy’s both in-person and online tend to spend three times more than those who only shop at one or the other — Macy’s has invested in data analytics so it can follow when and what they shop, then tailor incentive programs and product messaging to them.”

Breaking Down the Payment for Order Flow Debate. A good read on the payment for order flow debate and why orders on trading apps like Robinhood are halted when there is too much volatility.

Apple is sticking taxpayers with part of the bill for rollout of tech giant’s digital ID card. As an Apple shareholder, it is good to see the power that Apple wields against even the states. As a tax payer, I am quite concerned that the few participating states so far seem to give that much ground to a private company.

The end of “click to subscribe, call to cancel”? One of the news industry’s favorite retention tactics is illegal, FTC says. I am really glad that the FTC intervened to protect consumers. If you want an example of how governments can help citizens, this case is exhibit A.

Airlines Are Rewriting the Rules on Frequent-Flier Programs—Again. “The airline will make it possible to earn elite status without taking a single flight starting in March. Credit-card miles will count more toward status than ever before. Those who are true frequent fliers will get some added benefits, and business travelers who aren’t taking as many trips will be able to boost their status with their spending. Small-business owners and others who use their credit cards a lot now can be a top dog at American before they ever lift the buckle on a seat belt. Delta says it will automatically roll over status that SkyMiles customers have this year to 2022. In addition, it will pool qualifying miles earned this year and next together toward 2023 status requirements. Delta is also offering bonuses to qualify for elite-status tiers faster and is counting the flying that members do on award tickets toward status levels.” Another change that was encouraged by the pandemic. What doesn’t kill you makes you stronger, I guess.

What Went Wrong With Zillow? A Real-Estate Algorithm Derailed Its Big Bet. When you are in a business of risk management and become reckless and carried away by the pandemic, the consequences can be dire.

Stuff I found interesting

Japanese Philosophies That’ll Help You Spend Money Consciously. “Chisoku talks about being content with what you already have. Wabi Sabi talks about finding beauty in imperfection. As things age and decay, they become more beautiful. Mitate teaches us that every object has more than one purpose.”

New Zealand’s 180-million-year-old forest. “While most petrified forests are far removed from the modern forests that grow near them, Curio Bay’s petrified forest, which is a representation of an ancient Gondwana forest of cycads, gingkos, conifers and ferns, still has its descendants in the present-day forests found here. About 80% of New Zealand’s trees, ferns and flowering plants are native having evolved in isolation for millions of years.”

One of the World’s Poorest Countries Found a Better Way to Do Stimulus. “In Togo, a nation of about 8 million people where the average income is below $2 a day, it took the government less than two weeks to design and launch an all-digital system for delivering monthly payments to about a quarter of the adult population. People such as Bamaze, with no tax or payroll records, were identified as in need, enrolled in the program, and paid without any in-person contact.”

Stats

The state’s venture capital share has jumped from $300 million in 2016, to almost $3.1 billion in 2020 — 866%– according to Crunchbase. That makes it the state with the fastest growing venture capital rate.”

Drug overdose deaths exceeded 100,000 in the U.S in the 12 months ending April 2021

Out of 100 children born prematurely in Vietnam every year, 17 die in the first 28 days. My country has a long way to go in terms of public health.

Image
Source: Dave Ambrose

Thoughts on Apple Pay and Apple Card

In this post, I want to discuss Apple Pay & Apple Card

Apple Pay

Natively available on almost every Apple device out there, Apple Pay is one of the most popular mobile wallets on the market. In 2020, 92% of mobile wallet transactions funded by debit cards in the U.S were through Apple Pay. This level of popularity can mean a windfall for Apple because for every Apple Pay transaction, the company is reported to earn 0.15% of the volume. In Q1 FY2020, Tim Cook revealed that the annualized Apple Pay volume was at $15 billion. At 0.15% take rate, Apple earns around $22.5 million in extra revenue for, what I would imagine, a very high margin service. Even with that advantage, I believe that Apple Pay still has plenty of potential to realize.

First, the wallet feature is still absent in many countries in Africa, Asia and South America, where a large portion of the world’s population resides. As the adoption of Apple Pay ramps up, it should increase the total transaction volume and consequently some additional revenue for the company. The second lever lies in how Apple Pay is and can be used. As of now, it is most used in online mobile transactions. In-store mobile transactions just don’t gain enough traction as there are only 6 out 100 shoppers that use the service in stores, even 7 years after launch. I don’t expect the in-store trend to change in the future. Where I do see growth opportunities for Apple Pay, though, is in online web transactions. As more customers upgrade from old Macbooks and iPads to more modern versions equipped with Touch ID and Face ID, it will make Apple Pay for web transactions an easier and more seamless experience. Finally, Buy Now Pay Later (BNPL). The whole market is red-hot and Apple is rumored to be working on its own BNPL solution. The big advantage for Apple here is that the feature comes in the Wallet app, which comes natively on every single device. Users don’t need to download any other app to apply. As the concept of BNPL becomes more common due to the popularity of apps like PayPal, Affirm, Klarna or Afterpay, Apple will just ride the coattail and won’t have to spend much money and time educating shoppers on the service.

Of course, I’d be remiss if I didn’t mention that there are also headwinds to Apple Pay. Companies such as Shopify, PayPal, Square, Affirm and Klarna all want to be the go-to app & checkout options for shopping transactions. These companies are well-known in the U.S and many international markets, as well as have enough resources to truly compete with Apple on this front. Hence, it won’t be all rosy roads for Apple Pay, but I do expect it to continue to grow in the future. If PayPal can process over $1.2 trillion in annual payment volume, it’s possible that Apple Pay could rise to $100 billion in volume, meaning $225 million in revenue and almost pure profit for the company. Since there are 1.65 billion installed devices in the wild, $100 billion in volume would translate to less than $100 per device a year. It seems doable to me.

Apple Card

Apple Card is a co-branded credit card issued by Goldman Sachs. The mega bank is about to close the GM portfolio purchase in the next quarter or two. Hence, their credit card balance is mostly, if not entirely, from Apple Card. According to the latest quarter result, Apple Card balance was $6 billion as of September 2021, up from $3 billion just a year ago. In other words, the Apple Card portfolio doubled its outstanding balance in 12 months’ time. The size of a co-brand portfolio is often a private matter, but I managed to find a few as a reference for Apple Card

A portfolio’s outstanding balance changes from day to day. Therefore, these numbers may be very different from now. Plus, these companies have a different business model, brand name and card offering than Apple. Nonetheless, I do think growing a credit card portfolio to $6 billion in loans in two years is not a small feat.

Apple Card’s loans were $6 billion as of Sep 30, 2021. Source: Goldman Sachs

According to Experian and ValuePenguin, the average credit card balance in the U.S has been a tad more than $6,000 between 2019 and 2021. If we apply that number to the Apple Card portfolio, it means that the portfolio has a bit less than 1 million accounts. However, given that Apple Card doesn’t have a big signing bonus or intro offer and it can only earn 2% cash back when used with Apple Pay, I think that the average revolving balance is lower than $6,000. In fact, I think it’s very common that people just get an Apple Card because 1/ they want a nice-looking metal card and 2/ they want to put their big Apple purchase on installments. In the latter case, an Apple purchase should range from $1,000 to $3,000 in most cases. As a result I’d think that Apple Card’s average card balance likely ranges from $2,500 to $4,000.

Average Revolving Balance Per Account# of Accounts (in millions)
$2,5002.4
$3,0002
$4,0001.5
$4,5001.3
$5,0001.2
$6,0001

The number of accounts can determine how much money Apple can get from this arrangement with Goldman Sachs. In the cobrand credit card world, the issuer has to compensate its partner for leveraging its brand. The compensation includes a finder’s fee (a certain amount for a new account opened) and a profit sharing agreement which may be based on interest income or purchase volume, for instance. I have seen smaller brands command $60 per a new account. Hence, it won’t surprise me one bit if Apple can demand a three-digit finder’s fee from Goldman Sachs, given that Apple shoulders all the marketing efforts. At $100 per a new account, 1 million accounts brings in $100 million in revenue for Apple. Even if we factor in the marketing and reward expenses that Apple might incur, it’s possible that Apple can bring in more than the $100 million figure since we know nothing about the profit sharing part between them and Goldman Sachs.

In short, even though these two services have great potential and can bring in meaningful revenue and margin to Apple, given the size of the company, they won’t move the needle much. Instead, they are great value-added services that enhance user experience on Apple devices. With Apple Pay, transactions on every website or app that enable the service are so easy to process. With Apple Card, it’s likely the only product that come with no fees and installment plans every time you make a big Apple purchase. As long as Apple users remain loyal and attached to the company’s devices, these services will have the runway to grow. Remember that Apple Card so far is only available in the U.S.

Disclaimer: I have a position on Apple.

Thoughts about Apple Business Essentials

Last week, Apple announced a new service called Apple Business Essentials. From the press release:

Apple today announced Apple Business Essentials, an all-new service that brings together device management, 24/7 Apple Support, and iCloud storage into flexible subscription plans for small businesses with up to 500 employees. The company also unveiled a new Apple Business Essentials app that enables employees to install apps for work and request support.

Apple Business Essentials is a complete solution that makes employee onboarding simple, allowing a small business to easily configure, deploy, and manage Apple products from anywhere.

Within Apple Business Essentials, Collections enable IT personnel to configure settings and apps for individual users, groups, or devices. When employees sign in to their corporate or personally owned device with their work credentials, Collections automatically push settings such as VPN configurations and Wi-Fi passwords. In addition, Collections will install the new Apple Business Essentials app on each employee’s home screen, where they can download corporate apps assigned to them, such as Cisco Webex or Microsoft Word.

I am very excited about this new service. Apple has been a consumer brand first and foremost. Even though there were some efforts to go into the commercial space in the past, I don’t think that there has been any similar success nor that there is as concrete a step as Apple Business Essentials. This announcement signals that Apple feels ready to be a major player in the corporate computing world. If the management team didn’t feel that they had something concrete to offer, they wouldn’t say anything.

Apple has been putting the pieces together. Last year, it bought Fleetsmith, whose technology presumably powers the new Essentials service. The introduction of M1 makes Macbook Air and iPad perfect devices for office use. Unless your workloads are really GPU intensive such as video editing, you can do essentially everything else on a Macbook Air or an iPad and have a great experience with all-day battery, baffling speed and no heated hardware. How many office workers are frustrated by bulky, ugly-looking and hot-running Windows-based company laptops? How many would consider a Macbook Air a great perk to have? When a small business owner takes into account the benefit of increased productivity, the price difference between a Windows-based laptop and a Macbook Air, and the cost of hiring and retaining talent, they will see that Apple has an interesting offer here.

Back in September 2021, Apple unveiled a slew of (overdue) updates to its iWork suite, including Keynote, Numbers and Pages, Apple’s equivalent to Microsoft’s famous PowerPoint, Excel and Word. Starting iOS15, Apple users can now create a Facetime meeting and send an invite to a non-Apple user, a Zoom-like functionality. Obviously, these Apple-native features are not as good as the specialized alternatives on the market. However, for all small business owners, they are free tools that are sufficient to their needs.

Apple Business Essentials subscriptions come in 3 flavors: $2.99 per user/month for a single device & 50 GB, $6.99 per user/month for multiple devices & 200 GB in storage, and $12.99 per user/month for multiple devices with up to 2 TB in storage. According to the U.S Small Business Administration, there are about 31.7 million SMBs in the US, of which 6 million have paid employees and the average number of employees per firm is about 22. Let’s assume that 12 months from now, there will be around 60,000 subscribing SMBs for this service at the average revenue per user of $7 and there are 22 employees in each SMB. How much would Apple expect to make?

Figure 1 – Estimated Subscription Revenue for Apple Business Essentials For The First 12 Months

Given those assumptions above, I estimate that Apple would make $51 million in subscription revenue in the first 12 months of launch. However, it’s important to remember:

  • Hardware serving isn’t included. Apple said pricing for AppleCare+ would be announced later
  • The assumptions and estimates above are for the U.S only. If Apple decides to roll it out globally, the figures will be even higher

I find Apple’s pricing tiers interesting, compared to Jamf, arguably the market leader in this category. Jamf’s basic plan, Jamf Now, doesn’t charge customers for the first 3 devices. Starting from the 4th device, it’s $2 per device per month without storage and without the ability to deploy in-house or third party app. If a business wants to deliver 3rd-party apps like Apple Business Essentials does, it has to use the more expensive Jampf Now Plus at $4 per device per month. Let’s look at a few scenarios to see how Apple and Jamf are stacked against each other.

Figure 2 – Apple Business Essentials vs Jamf Now (Three DevicesPer User)

As you can see from Figure, when we compare Jamf Now and Apple Business Essentials, Jamf Now is more affordable if there are fewer than 7 devices. From the 7th device onwards, the scale tips in favor of Apple Business Essentials. Like I mentioned above, Jamf Now doesn’t allow a company to push 3rd party app or in-house apps; which will be a critical use case for SMBs. To take that use case into consideration, let’s compare Jamf Now Plus and Apple Business Essentials.

Figure 3 – Apple Business Essentials vs Jamf Now Plus (Three DevicesPer User)

In this case, any device after the 4th would incur more expenses for small businesses with Jamf Now Plus and Google Drive. If we talk about Device Management and Storage only, Apple Business Essentials should be more attractive. However, Jamf Now Plus includes priority phone support that is only available at an additional charge with Apple. This can tip the scale back in favor of Jamf as technical support can be the deal breakers for business owners or IT professionals.

What if each user only has one device? How would the comparison look for Jamf Now Plus and Apple Business Essentials? As you can see in Figure, Apple’s offering is more competitive as more devices are needed. Nonetheless, the lack of phone support at the moment may put the advantage to Jamf.

Figure 4 – Apple Business Essentials vs Jamf Now Plus (One Device Per User)

In short, I am excited about this initiative from Apple. We often see Apple take a measured and patient approach when it comes to new services or geography expansion. That same applies to this case. Going after small businesses, defined as having fewer than and up to 500 employees, with the fundamental services first is the right step. Even a giant like Apple needs to take time to build its capabilities in a new category. I am confident that more functionalities will be added later on to make the subscriptions more appealing. We’ll know more about how competitive Apple can be against Jamf once the details of Apple Care+ are revealed. The estimated revenue numbers look paltry considering that Apple generates north of $250 billion in annual revenue. However, we know how good the company is at scaling up new segments such as Apple Watch or Airpods. Give it 4-5 years and we may come back to this announcement as the start of a new great chapter in the Apple book.

A look at what Fleetsmith can do

Be vigilant about what you read on the Net – Examples from Financial Times

In this post, I’ll show you two specific examples of how even a famous outlet such as the Financial Times (FT) deploys misleading/wrong headlines and ambiguous data to draw viewership and why you need to be vigilant about what is on the Internet.

First Article – Apple’s privacy changes create windfall for its own advertising business

Last month, FT put out an article named “Apple’s privacy changes create windfall for its own advertising business“, which alleged that Apple successfully tripled their ads business significantly with the introduction of their own ads platform and self-serving security policies. To back up their thesis, FT used data from Branch, a mobile marketing consultancy firm. While it all sounds logical, there are a lot of holes in their argument. First, while FT referenced Branch and their work, there is no link to the source study or research. I actually went to Branch’s website, but couldn’t find anything that remotely looked like what FT might have used. If the entire article is based on data from one source, it’s very important to understand what raw data goes into the source. We have none of that here.

Second, the charts are misleading and ambiguous.

The left chart is meant to illustrate how app downloads linked to Search Ads allegedly increased substantially in the past 10 months. What bugs me about it are 1/ how do we know the increase is solely due to Apple’s favoring its own tool? Don’t get me wrong. I don’t doubt that Apple wants to grow its ads business and actually did as they disclosed in their latest SEC filings. But there is never official data on this subject and there are factors that can affect the accuracy of the chart: seasonality, some freak events, more brands actually using Search Ads regardless, etc. ; 2/ The chart on the right shows that Apple almost doubled its share of total installs from Nov 2020 to Jul 2021. Yet, the chart on the left showed that it increased only by 30%. Why is there a difference? How should I understand the discrepancy between the two?

More importantly, the chart on the right only concerns ads that promote app downloads in iOS. That market is small compared to the overall mobile market. In addition, total installs don’t equal revenue. Facebook, because of its scale, could very well earn more than what Apple did because of higher pricing. Another question I have is: what markets does this data concern? Is it only the U.S or is it global? Yet FT had no problem asserting that Apple tripled its share of mobile app advertising in 6 months.

Second Article – Snap, Facebook, Twitter and YouTube lose nearly $10bn after iPhone privacy changes

Two weeks after the first article went live, FT followed with another attack on Apple, asserting that iPhone privacy changes cost other advertisers nearly $10 billion in revenue. The error pattern is repeated in this article. It uses logic and data from another mobile marketing consultancy firm, Lotame, without providing a link reference or explanation of how these assumptions were made. Similar to the first case, I couldn’t find any source research on Lotame’s website either. The ambiguity regarding the data becomes even more alarming when you dig into the detail. To arrive at the $10 billion figure, FT calculates the expected Q3 and Q4 2021 revenue and applies their assumed impact on revenue, as you can see below.

I was shocked when I saw these two charts. First of all, none of the companies Facebook, YouTube, Snap or Twitter confirmed the exact impact on revenue by iOS privacy changes. 13.2% impact isn’t modest. It’s material enough and in the case of Facebook, it is a huge revenue loss. Hence, Because Facebook’s management itself didn’t disclose any concrete figures, how do we know that Lotame or FT’s assumption is correct? Secondly, FT had no problem adding the word “Expected” to their revenue projection of these firms. That’s fair and good. That begs the question: Q4 doesn’t conclude yet, then how can they say with such conviction that iOS privacy changes cost these firms $10 billion? Said another way, I’d be happier if FT either added the word “expected” to the headline (Snap, Facebook, Twitter and YouTube ARE EXPECTED to lose nearly $10bn after iPhone privacy changes) or only used Q3 data in their assumption. In that case, it wouldn’t be $10 billion any more and would likely attract far fewer readers.

Summary

In short, I am very disappointed at FT with these two articles. They were seemingly written and published to take advantage of the angst that some loud developers have towards Apple. They sourced data from mobile marketing agencies without providing context, original materials or raw data. To provide a methodology is a very standard practice in every research. Why didn’t FT in these two cases? It’s also important to note that the two ads agencies referenced by FT have every incentive to attack Apple because these iOS privacy changes hurt their business which relies on 3rd party data and surveillance tracking. Without knowing their methodologies, how can we trust that their data is objective? I mean, FT accused Apple of acting on their own interests. Then, how do we know that these ads agencies aren’t doing the exact same thing? But that’s not the worst “misdemeanor” I see here. It’s the way headlines were inaccurately conjured and data was ambiguously presented.

Stay as vigilant as you can out there!

Companies on Apple’s App Tracking Transparency

Apple introduced App Tracking Transparency (ATT) in iOS14.6 several months ago. The idea is that any app that wants to track users even after users stop using the app has to ask for permission. If permission isn’t granted, the app or developers can’t follow users around off premise. Such a lack of signal could result in weakened…tracking, targeting, measure and of course, advertisers’ income. Since the introduction of ATT, some advertisers and developers have voiced fierce criticisms towards Apple for abusing its power. The criticisms grew harsher after Apple debuted its own advertising network. Even though Apple doesn’t rely on 3rd party data for tracking, the move and the awkward timing make it look like Apple doesn’t do it for user privacy, but merely for its own pocket. Privacy proponents, on the other hand, praise this move by Apple as it gives the end users a choice to allow tracking or not. Both sides have strong opinions. But what do the stakeholders have to say? How have companies been affected by the change from Apple?

In this post, I’ll cite as many opinions from relevant parties in this debate as I can, so readers can form their own opinion. I’ll add my own thoughts on this debate in the end

Again, look, I think from our perspective, we haven’t really seen a negative impact of the Apple changes. As we said before, it’s beginning to become a more complex world from a data and privacy perspective.I think that makes the advice to give our clients more important. It will have an impact on individual media owners, depending on their business model. And I think those that have been impacted have been those companies that tend to have sort of a big app download business, which is linked very carefully to the ability to track what’s happening. That’s not part of the business in which we really operate, so I think accounts for the — perhaps the surprises that you saw there.

WPP CEO Mark Read – Q3 Earnings Call

Yes. So for us, it didn’t really have much of an impact. We did — like a lot of people, we’re very aware of it. We have a very big brand business which wasn’t significantly impacted at all. And the fact that we are — have a ton of first-party data with all of our users being logged into the service really helped us grow. So we didn’t really see much of an impact at all. We don’t see much going forward, although we’ll continue to monitor it. And Q4, for us, the biggest impact on Q4 will just be continued growth in podcast and in inventory. We know the demand is there. We know the advertisers are there.So for us, it’s just continuing to expand the inventory available for advertisers.

Spotify CFO Paul Vogel – Q3 2021 Earnings Call

Let me also spend a moment on ATT. We continue to see opportunities around personalization on Twitter as we better leverage our unique signal to improve people’s experience and show their more effective ads across both brand and direct response. The revenue impact we experienced from ATT in Q3 increased on a sequential basis but remains modest. The impact of ATT is likely to vary across ad platforms given the unique mix of ad formats, signal and remediations on each as well as other factors, the mitigations we put in place and the speed with which we’ve adopted new standards like the SKAdNetwork and resulting changes across our technical stack have contributed to minimizing the impact to us.

Since the launch of ATT in April, we’ve invested in supporting SKAdNetwork, opening up 30%-plus more inventory and scale on iOS and launch support for view-through attribution and SK Campaign ID management features in the Twitter ads manager. It’s still too early for Twitter to assess the long-term impact of Apple’s privacy-related IOS changes, but the Q3 revenue impact was lower than expected, and we’ve incorporated an ongoing modest impact into our Q4 guidance. We’ve seen our revenue product development, both related to and distinct from ATT, improved the performance of our products, and we expect that to continue.

Twitter CFO Ned Segal – Q3 2021 Earnings Call

In terms of the iOS 14 changes specifically, they had a modest impact on YouTube revenues. That was primarily in direct response. I think as you all know well, focusing on privacy has been core to what we’ve been doing consistently

Alphabet/Google CEO Ruth Porat – Q3 2021 Earnings Call

Rich, thanks so much for the question and share your disappointment. This has definitely been a frustrating setback for us. But I think over the long term, these privacy changes and protecting privacy for users of iOS and, of course, the Snapchat community is really important to the long-term health of the ecosystem and something that we fully support.

I think when we saw these changes coming, our primary focus was the performance of our advertising platform in the face of this signal loss. So could we still really drive advertising performance, optimize campaigns, make sure our ads were in front of the right people. And we spent the vast majority of our engineering time and effort and energy making sure our ads were still really effective. And we did all sorts of revenue back testing to make sure that we could be revenue neutral. And we were really confident in our ability to drive results with our advertising platform despite the signal loss.

But what I think we really underestimated were the tooling changes. And so what I mean by that specifically is that advertisers have essentially for a long time now, used a set of really sophisticated tools to measure and optimize their campaigns. So that allows them to test out a bunch of different creative and see what’s performing more effectively and so on and so forth. And the big change there was that with these new Apple changes, those tools were essentially rendered blind. And in their place, Apple released a new product called SKAdNetwork that allows advertisers to measure across different advertising platforms but without a lot of the flexibility that they’re used to. So for example, you can only really measure your advertising results using the success parameters that Apple is already defined. The reporting is delayed for a significant period of time and often unavailable, if you don’t hit a certain threshold of conversion. It’s very hard to see performance on a creative level.

Snapchat CEO Evan Spiegel – Q3 2021 Earnings Call

A dozen e-commerce companies interviewed by The Wall Street Journal said they now have to spend a lot more money on these ads to get the same number of sales from them that they could expect before the new feature was rolled out. They also can’t get enough data to know how effective these ads are at driving purchases. Many have reduced their ad spending on targeted-ad platforms. In a July poll of 118 e-commerce store owners by eCommerceFuel, 62% said they had decreased their Facebook ad spending since the iOS upgrade.

Source: WSJ

We’ve been open about the fact that there were headwinds coming, and we’ve experienced that in Q3. The biggest is the impact of Apple iOS 14 changes, which has created headwinds for others in the industry as well, major challenges for small businesses and advantaged Apple’s own advertising business. We started to see that impact in Q2, but adoption on the consumer side ramped up by late June, so it hit critical mass in Q3.

Overall, if it wasn’t for Apple’s iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth. And while we and our advertisers will continue to feel the effect of these changes in future quarters, we will continue working hard to mitigate them.

On targeting, we focused on improving campaign performance even with the increased limitations facing our industry. We’re building commerce tools to help businesses reach more new customers and get more incremental sales. And over the longer term, we’re developing privacy-enhancing technologies in collaboration with others across the industry to help minimize the amount of personal information we process while still allowing us to show relevant ads. Progress in these areas will take time and will be a focus for us throughout 2022 and beyond.On measurement, as we wrote in a recent blog post, we believe we are underreporting iOS web conversions. This means real-world conversions like sales and app installs are higher than what’s being reported from many advertisers, especially small advertisers. We’re making good progress fixing this. We think we’ll be able to address more than half of the underreporting by the end of this year, and we’ll continue to work on this into 2022.

Facebook COO Shreyl Sandberg – Q3 2021 Earnings Call

Kathy Huberty: And Tim, as a follow-up. We recently surveyed 4,000 consumers in the U.S. and China, and the feedback is most of them don’t want to pay for apps or services direct with the developer. They value the security, privacy, ease of transactions with the App Store. So how do you think about balancing the regulators push for more choice with a customer base that’s happy with the existing experience?

Tim Cook: The main thing that we’re focused on, on the App Store is to keep our focus on privacy and security. And so these are the 2 major tenets that have produced over the years a very trusted environment where consumers and developers come together and consumers can trust the developers on the developers and the apps or what they say they are and the developers get a huge audience to sell their software to. And so that’s sort of #1 on our list. Everything else is a distant second.

Apple Q4 2021 Earnings Call

My take

This issue features different stakeholders with varied interests. Even from the advertiser side, companies receive the change from Apple in various ways, depending on whether they are affected by it more or less than their rivals. Hence, when it comes to the question of whether ATT is a net benefit change, then we have to ask: for whom? For consumers, I do think it’s a great development. The surveillance tracking has been the standard practice in digital advertising for years. However, it doesn’t have to continue this way in the future. Consumers used to not have a say in the matter. Now they do. The choice is totally up to them and I think it’s great.

For businesses that rely on digital marketing, it’s undeniable that there is a short-term pain. As you can see above, some have to invest more money in digital ads for the same result. While I feel for them, the fact and the matter is that changes in external environments are part of doing business. Something that business owners have to encounter and overcome.

Regarding advertisers, I’ll say the same thing. The big change has finally arrived. Advertisers can either adapt to a society that is more conscious of privacy or keep complaining. Based on the commentary above, some advertisers have had little adverse impact so far from ATT. They invested in new tools, first-party data, distribution and products to overcome the obstacle. Even Facebook, the biggest whiner, also talked about how they tried to minimize the impact on their business. I don’t blame Facebook or any advertiser for vocal opposition. They do what they have to for their interest. But if millions of dollars is created in spite of violation of consumer privacy, then perhaps it’s time to change.

For Apple, even though apps and developers are important stakeholders in their ecosystems, the number one priority is still consumers. Whether you like Apple or not, the company is trusted by consumers, especially on the privacy front. For years, they have implemented services, software and hardware features that promote privacy. Because of this track record, for the time being, I believe in Apple. Of course, the company also wants to grow their highly profitable advertising network. Where Apple earns credit is that they manage to find a sweet spot that overlaps the two interests. With that being said, the introduction of Apple Search Ads after ATT plants the seed of doubt over their motive. Does it mean that what Apple did is inherently wrong? Not really. Companies exist to make money and look out for their and their shareholders’ interest. Apple is doing what it believes to be the best for their business. Is Apple a bit too much when it speaks from an ivory tower while launching its own ads network? Yeah, but that’s what every corporate Marketing department does.

Based on what I have seen so far, and I will continue to follow this issue, the advent of ATT is a significant change with big consequences in eCommerce, mobile ads and digital ads. I think a year from now, we will not decry ATT as something that wrecks peoples’ livelihood. Instead, it will bring about positive changes and innovation. Perhaps a similar move from Android within the next 2,3 quarters?

Disclaimer: I have a position on Apple, Facebook, Snapchat, Spotify

Weekly reading – 16th October 2021

What I wrote last week

Cardless – The startup behind the Boston Celtics, Manchester United and Cleveland Cavaliers credit cards

The virtual tour of Son Doong Cave by National Geographic

Good reads on Business

Semi-Annual Letter to Partners by the DMZ Partners Investment Management. It contains some great nuggets of wisdom with regard to investment and business

Next Act for Apple Veteran Ron Johnson Is Taking Home-Delivery Startup Public. Ron Johnson’s story is proof that even established names can fail. After making his name at Apple, you can argue that he failed at J.C Penney. Now he is working on another startup poised to go public via SPAC. I have to admit, though, that his startup doesn’t sound really exciting or appealing to me.

Bob Iger’s Long Goodbye. “The thing about Hollywood is, you can behave badly, you can be rude, you can make duds, but the thing you cannot do is fuck with people’s money,” says a producer with business at Disney. “You just don’t do that and hide behind technology as the reason why.” It’s really hard to come to a conclusion on whether Chapek is the right person for the job. In his defense, he was dealt with a very bad hand: his predecessor is one of the best CEOs the world has ever seen and his reign started with Covid-19. However, I am not pleased with his handling of the legal scuffle with Scarlett Johansson. That, along with the departures of key creative executives, shows that people’s skepticism of how he works with Hollywood is not entirely imaginary.

Disney’s shift to streaming puts ESPN in awkward position of clinging to the past. “ESPN probably won’t consider a direct-to-consumer service until the pay-TV bundle falls below 50 million U.S. households, according to people familiar with the company’s plans. Disney makes more money from cable subscribers than any other company, and that’s solely because of ESPN. ESPN and sister network ESPN2 charge nearly $10 per month combined, according to research firm Kagan, a unit of S&P Global Market Intelligence. The reverse is true for ESPN. Swapping an ESPN subscriber for an ESPN+ customer, who contributes average revenue of less than $5 per month, is a significant loss for Disney. ESPN+ is a streaming service with limited content.”

The Nasty Logistics of Returning Your Too-Small Pants. “The average brick-and-mortar store has a return rate in the single digits, but online, the average rate is somewhere between 15 and 30 percent. That kind of fraud accounts for 5 to 10 percent of returns. Many retailers don’t allow any opened product to be resold as new. Brick-and-mortar stores have sometimes skirted that policy; products that are returned directly to the place where they were sold can be deemed close enough to new and sold again. But even if mailed-in products come back in pristine, unused condition—say, because you ordered two sizes of the same bra and the first one you tried on fit fine—the odds that things returned to a sorting facility will simply be transferred to that business’s inventory aren’t great, and in some cases, they’re virtually zero.”

Amazon copied products and rigged search results to promote its own brands, documents show. “The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform. The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, “in the first 2 or three … search results” when customers were shopping on Amazon.in.” The fact that they mine sellers’ data and offer their own private labels isn’t new in the retail world. What I suspect will get Amazon into trouble with lawmakers is the rigging of search results.

EA Sports Is Planning for a FIFA Without FIFA. “Sales of the game, which releases an updated edition every year, have surpassed $20 billion over the past two decades for its California-based maker, Electronic Arts. But FIFA has cashed in as well: Its licensing agreement has grown to become the organization’s single-most valuable commercial agreement, now worth about $150 million per year.”

All That Zaz: With Warner Bros. Discovery Merger, David Zaslav Is Angling to Become America’s King of Content. “I asked him before he had to jump off our Zoom for a parade of meetings with producers and agents and talent and other Hollywood folk. Is there yet another megadeal up his sleeve? Will Warner Bros. Discovery need to get bigger still? “I think this deal will be the first sentence of my obituary,” he said, “that Discovery merged into Warner.” And the second sentence? “It soared.”

After a year of missteps, Ikea’s e-commerce business appears to be heading in the right direction. You may think that retailers naturally realize the value of eCommerce and the role that physical stores can play in the fulfillment game. In reality, it takes a once-in-a-generation pandemic for retailers to come to terms with this point. IKEA is one of them. As big and iconic as they are

Other interesting stuff

This 24-year-old dropped out of Columbia to build a $140 million underwear brand. Another example of the American dream right there

Love, Hope, and Worry in Drought-Ridden Page, Arizona

GreenForges digs deep to farm underground. ““I stumbled upon a paper that was analyzing how much food production capacity can we do in cities using rooftop greenhouses,” he said. “It’s a relatively low number; we’re talking 2 to 5% range for the cities of 2050. No one was asking the question, ‘Can we grow underground?’”.

Stats

As of October 2021, only 5% of Twitch users made more than $1,000 in 2021

Thailand has 28 million daily digital transactions as of October 2021, up from 7 million in 2019 and 14.5 million in 2020

“There are over 50 million retirees in the United States and, by 2035, there will be 72 million retirees”

One single mobile device infected with malware costs an organization an average of nearly $10,000, per Apple.

Weekly reading – 2nd October 2021

What I wrote last week

How our brains receive messages and some implications

Articles on Business

Bessemer Venture Partners struck gold with their investment in Toast, which went public recently. Their memo outlining the rationale such an investment is worth a read, especially for those who want to learn about Toast, those who want to learn Business and those who wish to go into Venture Capital.

Apple’s power move to kneecap Facebook advertising is working. A pretty biased article if you ask me. This is a complicated and nuanced issue, yet the author focuses more on the alleged impact that the privacy-centric features Apple introduced have on Facebook business. It does mention: “People are opting out of Facebook’s tracking for a reason: they no longer trust the company with their data after years of evidence they should not. But the context of Apple’s power move is important too.” What it fails to convey is that small businesses do have a problem when it relies on a single channel (Facebook, in this case) for survival. The article fails to articulate why it is Apple’s responsibility to take care of Facebook’s interest. Look, I totally agree that Apple does things out of its self-interest as all of us do. Most of the time, Apple masks its true intention with shiny marketing language as all companies do. But it’s strange to side with Facebook and its tactic to use small businesses as weapons in the war with Apple WITHOUT looking at the issue from the consumer perspective.

Google, Battling Amazon, Tries an E-Commerce Makeover to Win Back Advertisers.Amazon’s accelerating ad business has raised alarms inside Google, prompting Chief Executive Sundar Pichai to assure Alphabet’s board that rejuvenating its flagging e-commerce efforts is a priority, according to former Google executives. He must fix a mess of Google’s own making. The company has rebooted its digital shopping strategy at least four times over two decades and has had five leaders of its e-commerce operations in 10 years, the former executives said. “Google is almost like the living dead” in e-commerce, said Guru Hariharan, chief executive of CommerceIQ, an online-retail service provider. “No one goes there for shopping.”

How IBM lost the cloud. “Over and over again during the last decade, IBM engineers were asked to build special one-off projects for key clients at the expense of their road maps for building the types of cross-customer cloud services offered by the major clouds. Top executives at some of the largest companies in the country — the biggest banks, airlines and insurance companies — knew they could call IBM management and get what they wanted because the company was so eager to retain their business, the sources said. This practice, which delayed work on key infrastructure services for months or even years, was still happening inside IBM as recently as last year, according to one source.

Narrative Distillation. “Even today, the ability to get strong engineers to work on a problem engineers normally don’t want to work on remains a very strong formula for returns. You can increasingly see other top companies shifting to invest more in their company and founder brands. Product market fit is just narrative distillation for customers. It only makes sense that this same process is as crucial for investors and employees, too. And just as we have spent so many years reinforcing the primacy of founders focusing on product market fit—and the process of how companies converge on it—so too must founders take distilling their narratives for all audiences equally seriously.

BNPL Fund Flows
Neobank Landscape

Other stuff that I find interesting

History’s Seductive Beliefs. “Everything has a price, and the price is usually proportionate to the potential rewards. But the price is rarely on a price tag. You don’t pay it with cash. Most things worth pursuing charge their fee in the form of stress, doubt, uncertainty, dealing with quirky people, bureaucracy, other peoples’ conflicting incentives, hassle, nonsense, and general bullshit. That’s the overhead cost of getting ahead.

Ditching your commute: worth ~$40K/year in happiness

Our constitutional crisis is already here. “There was a time when political analysts wondered what would happen when Trump failed to “deliver” for his constituents. But the most important thing Trump delivers is himself. His egomania is part of his appeal. In his professed victimization by the media and the “elites,” his followers see their own victimization. That is why attacks on Trump by the elites only strengthen his bond with his followers. That is why millions of Trump supporters have even been willing to risk death as part of their show of solidarity: When Trump’s enemies cited his mishandling of the pandemic to discredit him, their answer was to reject the pandemic. One Trump supporter didn’t go to the hospital after developing covid-19 symptoms because he didn’t want to contribute to the liberal case against Trump “. A somber yet real read on the constitutional crisis that is unfolding right in front of our eyes.

This embroidery has a great talent in bringing aerial landscapes to life. Check it out!

Stats

Almost 25 million people played golf in the U.S in 2020

TikTok Claims the App Now Tops 1 Billion Monthly Active Users

Weekly reading – 11th September 2021

What I wrote last week

I did a quick review to show which remittance services you may want to use to transfer money to Vietnam or India

My reservation on PYMNT’s study on Apple Pay’s usage in stores

Interesting articles on Business

Why the global chip shortage is making it so hard to buy a PS5. In the silicon manufacturing process, for the most advanced tool inside a fab, typically you’ll have hundreds of different tools. Actually in a large fab, like one you might see at TSMC (Taiwan Semiconductor Manufacturing Company), you’ll have thousands of these tools. And these tools are big machines that process these wafers and do various things. And most tools cost, starting with a couple of million dollars, to the most expensive tools are in excess of 150 million euros. In Asia, they’ll build these things in a year. They’ll move in equipment in the second year, get it qualified, running, by the end of the year. In the US, or in the West, it takes a lot longer, because we don’t have the same mentality they have in Asia. We’re going to do all the permitting, all the hearings, and all that stuff. So it wouldn’t surprise me if it took 50 percent longer to twice as long. Now, let me tell you why that’s a problem. Because to your second question, a modern fab these days, one of the closer-to-leading-edge ones will cost you $10 billion-plus for the smallest efficient scale, and a really efficient scale will probably cost you closer to $20 billion. Think about how much depreciation that can generate. In Asia, the mentality is every day, every hour this thing isn’t running costs me tens of thousands, hundreds of thousands, sometimes millions of dollars. I’ve been in Asia on Christmas Day, and there are people out there with jackhammers and pouring concrete because it was like, “Man, every minute this thing gets done sooner, we can start generating cash.” We do not have that mentality in the West.”

Companies Need More Workers. Why Do They Reject Millions of Résumés? A gap on a resume should not be used to disqualify a candidate immediately. Many need to take a break, whether it was because a family member was sick or it was for their mental health. A less-than-stellar historical record shouldn’t disqualify a candidate either. We all make mistakes and we all deserve chances. Plus, if someone has the necessary skills, does it matter where they got those skills? Does it matter if they don’t have a degree? We use software to evaluate hundreds, if not thousands, of applications a year. It’s understandable. But I do believe that we can write better software to accommodate hiring needs and give people chances.

The surprisingly big business of Library E-books

PayPal To Acquire Paidy. PayPal agreed to acquire Paidy, a BNPL provider in Japan, for $2.7 billion in cash. Paidy reportedly has 700,000 merchants and more than 6 million users. As PayPal itself already has more than 400 million users, this acquisition isn’t likely about inflating the user base. The second reason is likely capabilities. Paidy, which shoppers can use without creating an account first or using a credit card, has a proprietary machine learning models to evaluate credit worthiness of consumers. In other Asian countries, it’s not uncommon for shoppers to pay cash on deliveries for online orders. Perhaps this is something that PayPal wants to replicate in other Asian markets.

Australia’s Top Court Finds Media Companies Liable for Other People’s Facebook Comments. The Court’s argument is that media companies post articles to stimulate conversations and engagement through comments. Hence, they should be liable for such comments. I don’t think that line of reasoning totally lacks solid grounds. I mean, a company’s Facebook page is essentially its property where it has the ability to curate (with Facebook’s help, of course) and it should have some responsibility for defamatory comments taking place there.

Source: CNBC

Stuff that I found interesting

This wildly reinvented wind turbine generates five times more energy than its competitors. This proposal, if materialized, can generate power for up to 100,000 households with one station while reducing the waste that is usually seen with the traditional turbines.

A great series on the study of obesity

Stats that may interest you

Mobile transactions in Vietnam are expected to increase by 300% between 2021 and 2025

Apple has around 52% to 57% of the mobile game transactions market (page 138)

Even though Apple doesn’t have a separate P&L for its line businesses, the Court found that the App Store’s operating margin is approximately 75% (page 145)