03 December 2020

The Washington Post: “Apple will pay $113 million for batterygate slowing of iPhones”

The company’s much maligned throttling efforts drew nationwide scorn when they came to light in 2017, stunning consumers who at the time saw it as an attempt to nudge them into buying newer, more expensive devices. States led by Arizona, Arkansas and Indiana soon opened a probe of the matter, and on Wednesday, they secured a financial penalty and legal commitment from Apple to be more transparent in the future.

Apple’s approach ultimately left many users feeling as if the only way to get improved performance was to purchase a newer-model iPhone from Apple, the Arizona complaint contends. As a result, the company relied on unfair and deceptive acts and practices to boost its sales potentially by millions of devices per year, according to Arizona’s attorney general.

Tony Romm

The list of lawsuits and fines for Apple’s ‘battery-gate’ does not stop here: the latest was filed just yesterday in Belgium and Spain by consumer advocacy group Euroconsumer; Apple agreed to another settlement earlier this year in the US, and was fined in Italy and France over the same issue. This is a situation where I wish fines and enforcement would be handled by the EU instead of individual countries – after all, there are iPhone buyers in every state, not just Italy, France and Spain, and Apple should be held accountable in front of all their customers. In a more general sense, it is another example of global companies exploiting the lack of global tax policy and legal framework to avoid scrutiny and maximize their profits.

02 December 2020

TechCrunch: “Salesforce buys Slack in a $27.7B megadeal”

Slack CEO Stewart Butterfield was no less effusive than his future boss. As software plays a more and more critical role in the performance of every organization, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I believe this is the most strategic combination in the history of software, and I can’t wait to get going, Butterfield said in a statement.

Ultimately, Slack was ripe for the taking. Entering 2020 it had lost around 40% of its value since it went public. Consider that after its most recent earnings report, the company lost 16% of its value, and before the Salesforce deal leaked, the company was worth only a few dollars per share more than its direct listing reference price. Toss in net losses of $147.6 million during the two quarters ending July 31, 2020, Slack’s uninspiring public valuation and its winding path to profitability and it was a sitting target for a takeover like this one. The only surprise here is the price.

Ron Miller & Alex Wilhelm

Fun fact, Stewart Butterfield was also the founder of Flickr, before selling the photo sharing site to Yahoo! for some $35 million. I don’t know enough about Salesforce to have an opinion about how this acquisition will turn out in a couple of years, but at least its founder continues to manage Slack from within its new owner. So maybe it has a better chance long term to not end up like Flickr

The Guardian: “How our home delivery habit reshaped the world”

The great trick of online retail has been to get us to do more shopping while thinking less about it – thinking less, in particular, about how our purchases reach our homes. This divorce of a product from its voyage to us is perhaps the thing that Amazon has sold us most successfully. Jeff Bezos, Amazon’s founder, never wanted his customers to worry about shipping – about how much it cost, or about how long it would take – and he relentlessly shredded delivery times to make shipping incidental to the purchasing experience.

Amazon’s emphasis on speed compelled other retailers to hurry, too, and encouraged us to believe that if something cannot be had quickly, it is barely worth having at all. It is as if we have forgotten that a product is an object moving through space, fighting gravity, air resistance and other forces of nature. Companies, though, are only too aware of it. While we choose and buy our purchases with mere inch-wide movements of our thumbs, they are busy rearranging the physical world so that our deliveries pelt towards us in ever-quicker time.

But as our urban lives have grown more pressed for time, we have diced our opportunity costs finer and finer; from budgeting days or slabs of hours, we have come to rationing minutes. Delivery schedules have shrunk in parallel. You might now reason that even a 12-minute walk to the store to buy a can of beans is too great an expenditure of time, and that the fee paid for one-hour delivery is a fair price to snatch those minutes back into your life. Of course, the principle of opportunity cost assumes that we will earn the value of that fee back in some way in those 12 minutes – whereas the truth is that we are most likely to squander them on Instagram. The internet promises us time, then takes it right back.

Samanth Subramanian

Wonderful overview of the complicated field of logistics, where companies aggressively optimize transportation and packaging to deliver an increasing variety of goods to our doorsteps as fast as possible. Another article from pre-corona times, but the information here is just as relevant as before, if not more. The improved logistic developed over the past decade has allowed a large number of people to comfortably and safely work from home, and the disruption of the pandemic has in turn benefitted e-commerce companies, a sector which this year has seen growth equivalent to several years under normal circumstances.

30 November 2020

The Atlantic: “History’s Largest Mining Operation is about to Begin”

His case for seabed mining is straightforward. Barron believes that the world will not survive if we continue burning fossil fuels, and the transition to other forms of power will require a massive increase in battery production. He points to electric cars: the batteries for a single vehicle require 187 pounds of copper, 123 pounds of nickel, and 15 pounds each of manganese and cobalt. On a planet with 1 billion cars, the conversion to electric vehicles would require several times more metal than all existing land-based supplies—and harvesting that metal from existing sources already takes a human toll. Most of the world’s cobalt, for example, is mined in the southeastern provinces of the Democratic Republic of Congo, where tens of thousands of young children work in labor camps, inhaling clouds of toxic dust during shifts up to 24 hours long. Terrestrial mines for nickel and copper have their own litany of environmental harms. Because the ISA is required to allocate some of the profits from seabed mining to developing countries, the industry will provide nations that rely on conventional mining with revenue that doesn’t inflict damage on their landscapes and people.

By the time I sat down with Michael Lodge, the secretary general of the ISA, I had spent a lot of time thinking about the argument that executives like Barron are making. It seemed to me that seabed mining presents an epistemological problem. The harms of burning fossil fuels and the impact of land-based mining are beyond dispute, but the cost of plundering the ocean is impossible to know. What creatures are yet to be found on the seafloor? How many indispensable cures? Is there any way to calculate the value of a landscape we know virtually nothing about? The world is full of uncertain choices, of course, but the contrast between options is rarely so stark: the crisis of climate change and immiserated labor on the one hand, immeasurable risk and potential on the other.

Wil S. Hylton

I first read about this potential future issue on Peter Watt’s blog – whom, being a trained marine biologist, I trust to be an expert on the subject. Strip-mining the seafloor for rare metals does now look like a valid solution to our current climate change problems; we would simply patch one thing and damage another, with no clear estimation of the future consequences on Earth’s environment. In fact, we would repeat the same mistake that led to global warming in the first place: burning fossil fuels without thinking of large-scale and long-term repercussions.

26 November 2020

Wired: “The AstraZeneca Covid Vaccine Data isn’t Up to Snuff”

The Oxford-AstraZeneca story is very different, though. Presumably, neither of the two trials from which they combined data could have provided a clear answer on the vaccine’s efficacy on its own. To make things worse, Oxford-AstraZeneca reported only the results for certain subgroups of people within each one. (For perspective on this: The two subgroups chosen leave out perhaps half the people in the Brazilian trial.) Meanwhile, one of their key claims is that giving half a dose of the vaccine on the first injection, followed by a standard dose on the second one, led to better outcomes—but neither of these trials had been designed to test this hypothesis. In fact, it’s since emerged that the half-dose/full-dose option started out as a mistake, and one that was only caught when some people in the study didn’t have the usual high rate of adverse effects.

Hilda Bastian

I had barely published my coronavirus update yesterday, when I saw a string of articles questioning the transparency and rigor of trials results for the vaccine jointly developed by AstraZeneca and the University of Oxford. Several of their decisions look problematic: they combined results from separate trials conducted in different countries with different methodologies, and it turns out the more successful trial, reportedly with 90% efficacy, did not include people over the age of 55, who are most at risk from this disease.

25 November 2020

Coronavirus in Romania: the third plateau

In stark contrast with the relatively quiet summer months here at home and in Europe, autumn has brought an avalanche of news, most of them bad, but some hopeful as well. The daily reported cases have skyrocketed in many parts of Europe, followed by increased hospitalizations and deaths, and by reports that in some cities, hospital staff are being asked to continue working despite testing positive. Governments have responded by gradually reintroducing restrictions, although not as harsh as the spring lockdowns.

In Romania the number of cases has also steadily increased throughout October, culminating in the first week of November, when almost each day another record was broken, and we surpassed 10.000 cases per day for the first time on November 6th. The following weeks this upward trend, which started in the second half of September, was finally interrupted: on the second week of the month the number of cases declined slightly, almost 1% compared to the first week, and in the third week it rose again, by a little over 3%. The number of people admitted to ICU is also rising steadily, surpassing 1000 patients on November 4th. The number of daily deaths peaked at 203 in the second week, on November 11th, when the weekly death count also climbed over 1.000 for the first time, but at least week-on-week growth slowed last week from 30% to only 7%.

23 November 2020

Financial Times: “Five takeaways from Airbnb’s IPO filing”

Airbnb’s IPO prospectus showed that revenue growth had been slowing well before the coronavirus pandemic threw its business into disarray.

In 2016, Airbnb increased revenues by 80 per cent from the year prior to nearly $1.7bn, while producing positive free cash flows. Months later, investors injected $1bn in new equity that valued the company at $31bn.

But by 2019, Airbnb was experiencing its third straight year of slowing growth, with revenues increasing 32 per cent from the previous year. By comparison, the ride-hailing company Uber boosted revenues at a rate of 42 per cent in the final full year before its IPO in 2019.

Airbnb warned it expected growth to continue slowing in the future, suggesting its most explosive years may have passed.

Dave Lee & Miles Kruppa

Among the many articles dedicated to Airbnb’s upcoming IPO this one is the most balanced and I think it captures the reality of the business well. While the pandemic has carved out a big chunk of revenues and forced the company to take drastic measures to reduce costs, financial problems were apparent even before 2020 started. Airbnb incurred a massive net loss at the end of 2019 compared to previous years. Looking at the numbers, it appears that the final quarter of 2019 was unusually rough: between September end and year-end 2019 the free cash flow declined from $319.8 million to $97.3 million and the net loss expanded from $322.8 million to $674.3 million. As of September 2020, Airbnb reported a free cash flow of negative $520.1 million – having burned through more than $1 billion since the end of 2018!