Tag: Tech

Recently adjusted (cut) government subsidies for electric EV in China

EV is probably one of the most mature new market. It is still something new for most families, but it seems to me that the global EV technology readiness is pretty much similar to that of iPhone in 2013-2015 (iPhone 5S – iPhone 6S).

The industry is more likely to make incremental improvements over the next decade. It won’t be easy in terms of technological progress; it will also need much more effort/thinking in terms of commercial strategies.

One of the latest sign is the most recent subsidy cut for “new energy vehicles”, dated March 26 in Beijing #财建〔2019〕138号.

The reduction in subsidies has been outlined as early as April 2015 #财建〔2015〕134号, in which 1. the subsidies for 2016 was announced and 2. projected that certain vehicles’ 2017-2018 subsidies shall be 20% lower & 3. 2019-2020 subsidies shall be 40% lower, among other things.

2017－2020年除燃料电池汽车外其他车型补助标准适当退坡，其中：2017－2018年补助标准在2016年基础上下降20%，2019－2020年补助标准在2016年基础上下降40%。

#财建〔2015〕134号

Here is the list of updates in the following years:

#财建〔2016〕958号 – Announced Dec 30, 2016; Effective Jan 1, 2017

#财建〔2018〕18号 – Announced Feb 12, 2018; Effective Feb 12, 2018; Grace Period till Jun 11, 2018, during which passengers would follow the previous program x 40%, trucks would follow the previous program x 70%, fuel cells would follow the previous program

#财建〔2019〕138号 – Announced Mar 26, 2019; Effective Mar 26, 2019; Grace Period till Jun 25, 2019, during which vehicles unqualified for 2019 standard shall follow previous program x 10%, qualified for 2019 standard shall follow previous program x 60%, policies for fuel cells and buses will announce separately

A summary of national government (not including regional) subsidy base for battery electric vehicles

More restrictions are added in 2018 and 2019, especially in terms of technical standards.

Smaller EV manufacturers with little R&D resources will need to restructure or pivot. Profitability will be an issue for many companies; but a needed test to form a mature market that can run itself and benefit most stakeholders.

Apple March Event, Officially Marching Into Broader Services Categories

Apple announced 3 new (subscription) services today: Apple News+, Apple TV+, Apple Arcade. [they are actually very similar to a previous post Apple’s Service Bundle]

Apple News+ is a $10 per month subscription bundle. Essentially, it is a product of “securitization” of reading magazines & newspapers – just like Spotify as a securitization of listening to musics.

Apple News | Source: apple.com

Apple TV+ will be offered through new Apple TV app. This is important as it might be the first major service/software by Apple that doesn’t require an Apple device.

Apple TV app | Source: apple.com

It doesn’t have a price tag yet. And it is reported that Apple will partner with brands like HBO to offer an add-on option (i.e. additional $10 per month), just like what Hulu, DirectTV and many other streaming plans are providing.

Another question tho, is how the Apple TV app (and the Apple TV+ service) will impact the sales of Apple TV as it will be available on many smart TVs such as Roku, Fire TV (Amazon), Samsung, etc.

Apple TV app availability | Source: apple.com
Apple TV 4K | Source: apple.com

Apple Arcade is coming sooner that I thought. And it will be a cross-platform product working across iPhone, iPad, Mac, and Apple TV.

Apple Arcade | Source: apple.com

It is a very good showcase/test of how Apple is merging or making it compatible between iOS and MacOS (and tvOS).

What’s next?

A master membership from Apple is possible – something like $98 per month that includes Apple TV+, Apple News+, Apple Music, Apple Arcade, iCloud storage, AppleCare, etc.

Or a modular membership system.

At the core could be the financing of Apple devices’ purchases – maybe around $30-50 per month – and each subscription will be an add-on. This may provide an extra synergy with the new credit card service by Apple and Goldman Sachs.

Apple Card | Source: apple.com

Apple has those great plans to translate sales and customers into cash flows.

But for consumers, there will be some psychological differences between purchasing a device (as an asset) and paying an indefinite monthly fee (as an expenditure). And services are not as showable as devices. Apple (and Apple investors) might need to prepare and think carefully about those subtle changes.

AWS And Its Appearance In Other Companies’ (IPO) Filings

Following upon a previous post about all those tech companies’ rush to Nasdaq, a group of companies have filed S-1 the past weeks, including Lyft, Pinterest and Zoom.

Plus the previous filings from companies such as Snap, we could get a glimpse into the empire of AWS… as the infrastructure of the current tech industry and all these companies’ commitments to pay Amazon.

Several examples. Starting with Pinterest:

    • 2018 revenue $775.9 million
    • 2018 cost fo revenue $241.6 million
    • Total commitment: at least $750 million in 7 years, from July 2017 to June 2023, first year of $125 million
    • Remaining $441.1 million as of Dec.31 2018
    • On average used: $206 million/yr [estimation: (750-441.1)/1.5=206]

Lyft

    • 2018 revenue $2,157 million
    • 2018 cost of revenue $1,243 million
    • Total commitment: at least $300 million in 3 years, from Jan 2019 to Dec 2021, each year at least $80 million
    • On average used: $60 million/yr [estimation: (144-24)/2=60]

Snap

    • 2018 revenue $ 1,180 million
    • 2018 cost of revenue $799 million
    • Total commitment: at least $1.1 billion in 6 years, from Jan 2017 to Dec 2022, ($90.0 million in 2018, $150.0 million in 2019, $215.0 million in 2020, $280.0 million in 2021, and $349.0 million in 2022)
    • On average used: $60 million/yr
    • Snap relies more on Google Cloud: at least $2 billion in 5 years, Jan 2017 to Dec 2021, at least $400 million/yr
    • estimated usage: at least $530 million/yr in 2018

AWS achieved a revenue of $25,655 million in 2018, equivalent to the usage of ~48 Snap combined.

It will be interesting to see how AWS is going to renew/grow those contracts (should be easy, considering the friction to change a cloud provider) and how those companies will negotiate those terms, as more providers are as legit.

And when tech companies are using a blend of private cloud and those services, how AWS and others are going to fill the revenue “hole/gap”.

After all, the Cost of Revenues (partially due to AWS) will be limited by the Revenues (of internet companies); the growth heavily rely on new usages and the overall revenue of all internet companies.

「Video of the Week」Robotics In Manufacturing

most will agree that automation is coming to fill up the shortage of labor and prepares us for the demographic shift in the next few decades.

While that should be the future, along the way, I believe there will be miserable frictions., as technology advancements and deployment is not as smooth as changes in the working population.

How to minimize the negative impacts of those frictions will be a critical topic. After all, we want people to live in good lives.

An Eventful Tuesday: Tech Companies Stealing Each Other’s Thunder

Many tech-related announcements/events is happening on March 19. Coincidence? or a colluded effort to steal someone’s thunder…

So we have…

Apple announcing several updates on its hardwares, from iPad yesterday to today’s iMac.

And Facebook (Instagram) + PayPal collaboration bringing the next-level integration of social medial + e-commerce. [also mentioned in what’s next in retailing in China] The collaboration won’t be limited to Instagram and will be part of Facebook’s push to payments while Facebook Pay in its messenger app is not doing well enough. And for PayPal, this is a major victory to reinforce its presence in online payments and business collaboration.

And Google unveiled its upcoming gaming-streaming service, Stadia, on the Game Developers Conference today. Originally announced as Project Stream, it will compete directly with Microsoft, Nintendo, Apple and others in the future battleground of gaming: cloud. [Video, Project Stream]

Meanwhile, Jeff Bezos is hosting an exclusive hard-tech party in Palm Spring called MARS, focusing on robots and other cutting-edge engineering demos.

Data, Data, Diners’ Data

When e-commerce breaks the limits of physical location and moves everything online, some will say restaurant businesses are safe, since people need to dine locally.

But that’s not entirely true. If there are companies eager to learn consumers’ purchasing behavior (via all the data generated from browsers), they won’t let go the valuable data on people’s dining behavior. And of course, wherever there is an opportunity for recommendations, there is an opportunity for ads.

So first step: collecting data.

There are several formats.

  1. Purchasing through brands’ apps. That’s what we have seen in the past few years: nearly all major restaurant/coffee groups built their own system that at least integrate customer management, online order and promotion. Starbucks, McDonald’s, Subway, Shake Shack, etc.
  2. Ordering on iPad when dining-in. That makes taking orders less labor-intensive. It can also let diners order ahead and improve the overall efficiency/utilization including kitchen process optimization.
  3. Take-out & food delivery. This is where most money is in right now. DoorDash, Postmates, UberEats… [See more in a previous post (Chinese)] It is a more comprehensive study at user’s preferences, integrating most dining choices.
  4. Booking tables. This is a cheaper/lighter operating model than format 3 while also getting a big picture of users’ preferences. Sometimes it is combined with format 3 like Yelp’s offering.
  5. Restaurant table management. This is usually a back-end system for employees to use, but could be combined with format 2/4 to create a streamline management experience.

Just a few days ago, the dining data issue escalated as companies are fighting for its “ownership” or “commercial/economic potentials”.

At the spotlight: OpenTable (format 4) and SevenRooms (format 5), reported in WSJ: Who Controls Diners’ Data? OpenTable Moves to Assert Control. 

Background:

OpenTable is a restaurant reservation service that allows patrons to book tables from the Web. Restaurants pay OpenTable $1.50 for every seated diner who reserves a table through its service. OpenTable also operates a guest-services platform to help restaurants run more smoothly.

SevenRooms charges restaurants $500 per month for its offering, takes the guest information from OpenTable and assists restaurants with table management. Under the new policy, some restaurateurs had featured, that practice would be banned.

Source: http://fortune.com/2019/03/15/opentable-data/

Essentially, OpenTable will now require a fee if the restaurants are giving other companies access to diners’ data. OpenTable will now charge restaurant operators $250 if they use both systems.

Both companies are resourceful; OpenTable is more established and mature. OpenTable is acquired by Priceline (Booking Holdings) in 2014 for $2.6 billion and behind SevenRooms is Amazon (Alexa Fund invested in October 2018).

While I believe in the improved management efficiency and dining experiences, I am also concerned with personalization. It is possible that personalized menu will include personalized bundle of foods and different mark-ups. And dining information could be more personal than most people understand. It includes timing, location, frequency, spending… Think about a database of how much drinks you ordered with different group of friends.. When combined with other datasets, powerful predictions and precise understandings of the diners could be built. [A similar comment on this: users being programmed on social medias]

Again, the privacy issue and the access/user/process of data should be paid more attention to before bad things could happen…

Pokemon GO Rises Again

It seems to some that the Pokemon GO fever was in 2016-ish and has lost the momentum.

It seems to me though, the game has never been dead and might be the first AR mobile game platform with a massive user base [and to introduce a new way of social interaction/entertainment]

Actually the company behind the game, Niantic, just raised $245 million at a nearly $4 billion valuation in January.

So what is new for Pokémon GO if it is not dead.

Social features.

1. Pokémon GO introduces friends features that can send daily gifts to each other and trade pokemons. Making friends and leveling up the friendship level will earn lots of exp. In September 2018, Niantic said “more than 113 million Friend connections have been made and 2.2 billion Gifts have been sent to friends” since the end of June (in two month total)

2. Gym system reworked to encourage team play (June 2017) + raid boss introduced at gym (July 2017). Gyms are where trainers use Pokémon’s to defend/attack and essentially defending a gym will need more legitimate teamwork. (Less of a broken gym system before) The raid system is a smart design. Legendary Pokémon raids reengaged many players. The most recent Rayquaza raid is high expected (should give Pokémon Go some good statistics to show growth/relevance).

3. Battle system. Although introduced before, it was improved recently. All skill sets now have two numbers: damage in gyms and damage in battle. It will be much more raiser to design a balanced battle system now. And that will be the basis of Pokémon tournament/E-sport.

4. AR photos. The system is working well and has a lot more features to add. I could imagine many fun photos can be taken with Pokémon’s in real world settings. Also, taking a selfie with legendary Pokémon’s will give a sense of achievement and more purpose of playing. Moreover, it could be fun with multiple players/pokemons at the same place and more natural interactions implemented.

Strong IP is such a valuable asset.

Pokemon GO park (like a Disneyland, smaller) would be very doable. It might be the first AR park to be built. More fun in the park with AR glasses and phones.

Some more social community events could be designed. It has already incorporated events that celebrate holidays around the world. Pokémon GO could be a lifestyle. (A healthy one in terms of all the walking)

Tesla Model Y Revealed

March 14, 2019 at Tesla’s design studio in Los Angeles.

Debut of Model Y – the full event below:

With introductory version priced at $39K,  Model Y will start to deliver next year with premium versions first.

Source: Tesla.com

In terms of design, it is more like 7-seats version of Model 3. In fact, they share around 75 percent of its components. (good for supply chain management and another win for modular design)

The “SEXY” lineup has now completed.

Then what is next for Tesla besides mass production and updates of these models?

Bringing Tesla to Mars is one thing mentioned during the event. But that is SpaceX’s work.

Infrastructure for global adoption of EV and solar power is definitely a sexy target to work towards. But that will also rely on governments’ and other organizations’ efforts.

Tesla Semi (the e-truck) is also on the way to deliver. It will be Tesla’s Business Solution, which is different from what Tesla has been doing all the time – selling to consumers. Could Tesla become a service company? E-truck + autopilot as a service? It could be a good spin-off.

[Update March 15] Another product teased on the event is Tesla’s e-pickup truck. [More on e-truck]

Smaller e-vehicles + autopilot? for food/grocery delivery on sidewalks. Possible.

Or bigger flying e-vehicles? Possible but requires a lot more new designs/engineering. Would be a tough sell for investors. Besides, Musk seems to be more interested in next-generation transportation underground (with the Boring Company) than in the air.

「Video of the Week」CRISPR-edited Bacteria As A Storage of Data

First video stored in its digital form in bacteria’s DNA, with the help from CRISPR/Cas9 gene editing.

DNA as a storage is not an entirely new idea. Microsoft has been exploring this field with Twist at least since 2016. They have successfully stored music (audio) performances in DNA in 2017.

Now (in the video), researchers at Harvard Medical School and the Wyss Institute are using live organisms.

Mark Zuckerberg’s Post on Privacy

Today, the person at the center of today’s privacy/data issues commented with his thoughts and future moves of Facebook.

[Read Zuckerberg’s original post here]

End-to-end encryption and secure data centers are the two most important things touted by Facebook’s CEO.

“In a few years, I expect future versions of Messenger and WhatsApp to become the main ways people communicate on the Facebook network.”

[WhatsApp is the leader in end-to-end encryption and was acquired by Facebook in 2014 for $22 billion total]

[Read more on the conflict between Facebook and WhatsApp after acquisition]

However, there is one big mismatch – users don’t care what technics FB is using; they care if people they don’t know know them well. Essentially, users will still feel their information is sold if they saw tailored ads in WhatsApp. They only care about results. And that’s where Apple’s iMessenger wins. Users don’t know what efforts Apple is making but they don’t see ads.

What’s more…

“Beyond that, significant thought needs to go into all of the services we build on top of that foundation — from how people do payments and financial transactions, to the role of businesses and advertising, to how we can offer a platform for other private services.”

Yes Facebook will do payments and issue blockchain-related or other forms of cryptocurrencies/units.