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| Hello Insiders!! Today's Business newsletter covers: - 😮 Analysts: Huawei's chip development could trigger U.S. crackdown
- 🍂 Deep Dive: Pumpkin flavors hit restaurants early
- 🤝 Apple, Arm ink new chip deal
If you enjoy reading this newsletter, please share it with your friends and colleagues. If there's a topic you want to see discussed in the newsletter, let us know! Thank you!! Shriram
p/Shriram | |
| 1 | | Analysts: Huawei's chip technology advancements, demonstrated by the Mate 60 Pro smartphone sporting its Kirin 9000s proprietary chip, produced using 7 nm technology by SMIC, highlight China's determination to thwart U.S. sanctions. This breakthrough demonstrates China's progress in developing high-end chips despite U.S. sanctions restricting its access to cutting-edge chip manufacturing equipment. More: - Dan Hutcheson, a TechInsights analyst, pointed to China's perseverance in chip technology but warned that it would lead to further, stricter limitations from the U.S.
- According to Jefferies analysts, TechInsights' findings might lead to an investigation by the Bureau of Industry and Security of the U.S. Commerce Department and intensify the tech conflict between the U.S. and China.
- They also stated, "There are rumors that Huawei may have bought the tools and technology needed to produce the semiconductor from SMIC."
- SMIC had previously been known for producing ultra-advanced 14nm chips, but Washington prevented it from acquiring an EUV machine from Dutch company ASML in late 2020.
- Some research firms reported, "Low yield rates, rising prices, and export restrictions are obstacles that impede Huawei's potential to reclaim its supremacy in the smartphone industry."
Zoom Out: - Reuters reported, "A new state-backed investment fund will soon be unveiled in China to raise around $40B for the country's semiconductor industry."
Q: What are the key factors driving China's determination to develop advanced semiconductor technology despite U.S. sanctions? Join the conversation here. |     | |
| 2 | | 
What the numbers say: In August 2022, there were 86 limited-time pumpkin product launches, more than double the number in August 2019, with restaurants and convenience stores introducing 559 seasonal pumpkin-themed items by 2022, compared to 268 in 2019. Relevance: Due to financial incentives, consumer demand, and studies demonstrating the success of earlier debuts, restaurants and retailers are introducing their fall-themed products earlier and prolonging the fall season. Back-to-school shopping and the earlier start to the school year, which give August the appearance of autumn, emphasize this shift. More Data: Starbucks has been releasing its pumpkin spice latte since 2018, reflecting the growing popularity of pumpkin-themed drinks and food during autumn. While IHOP's fall menu, including pumpkin spice flavoring dishes, launched on Aug. 28, Dunkin's autumn selection began on Aug. 16, eight days before Starbucks. | | | |
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| 3 | | According to Arm's IPO paperwork submitted on Tuesday, Apple and Arm have established a long-term chip technology agreement that will last through 2040. With plans to offer 95.5 million American depositary shares at $47 to $51 each, SoftBank Group-owned Arm is preparing for a $52B IPO, which could be the largest in the U.S. for the year. More: - The computer architecture used in most smartphones is protected by intellectual property that Arm controls and licenses to companies like Apple.
- Apple uses Arm's technology to create customized chips for its iPhones, iPads, and Macs.
- With a long relationship with Arm, Apple was one of the company's founding members in 1990.
- Apple and other significant tech firms contributed $735M to Arm's initial public offering.
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| 4 | | With Google's YouTube as the first advertiser, the Las Vegas Sphere stadium, operated by Madison Square Garden Entertainment, has begun to display commercial advertisements. On the Sphere's LED exterior, YouTube intends to advertise its NFL Sunday Ticket membership package for roughly two weeks, which enables users to watch Sunday games. More: - The venue wants to compete with spots like Times Square and Piccadilly Circus for the most prestigious and lucrative billboard advertising space.
- The price of YouTube's ad purchase is unknown, but Sphere's ad sales staff provides blocks of 90 seconds that may be purchased at different frequencies.
- Due to developments in digital billboard technology, out-of-home advertising, especially digital placements, has attracted more attention.
- In the U.S., $9B was spent on out-of-home advertising by marketers in 2022, with almost one-third going to digital placements, up from 17% in 2015.
- A broader NFL Sunday Ticket promotion that includes hyper-realistic 3-D anamorphic billboard advertisements is being run with YouTube's Sphere advertising campaign.
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| 5 | | The natural gas distribution businesses owned by Dominion Energy will be sold to Enbridge for $9.4B in cash, and it will also assume $4.6B in debt owed by these businesses. Dominion wants to focus on investing in renewable energy sources and enhancing its electrical infrastructure. More: - The pipeline networks in North Carolina, Ohio, and a few Western U.S. states are run by the Dominion gas distribution corporations.
- Around 7 million customers across 15 states are served by Dominion, which last year announced a thorough business review to raise the value of its stock by modifying its electric utilities to meet rising demand brought on by data centers, electric vehicles, and the move away from natural gas for domestic usage.
- For $690M, Dominion last year sold its West Virginia natural gas distribution company.
- With the acquisition, Enbridge will have the most significant gas utility business in North America in terms of volume.
Zoom Out: - The Biden administration's climate strategy includes electrifying homes and businesses and increasing demand for electricity.
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| 6 | | Data from Appfigures shows that there has been a decline in app downloads in the U.S. App Store, which impacts overall app installations even though it isn't significant enough to replace popular programs like Facebook. The Mobile Download Index, which tracks app installs, declined by 8.28 points (9%) from 91.87 in 2022 to 83.59 as of Aug. 31, 2023; various app categories experienced different installation declines. More: - Sports streaming, healthcare, business, education, commerce, travel, and productivity apps continue to rise in popularity.
- Double-digit declines were seen in news, gaming, and entertainment apps, presumably due to market saturation.
- App Tracking Transparency and competition from new entrants are cited as potential reasons for this trend.
- Due to developers' attention to monetization, app income in the U.S. has been increasing despite a decline in installs, with productivity apps and board games exhibiting robust revenue growth.
- Productivity applications experienced the most revenue growth over the past year (up 69.3%), and board games experienced the highest growth in games (up 584.9%)
- The Mobile Revenue Index was 363.13 in 2022, much more significant than in 2018, and as of 2023, it was 458.3, or 122.17 points (36.4%) higher than it was at the beginning.
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- Due to the ongoing writer and actor strikes, Warner Bros. Discovery reduced its projection for the full year of 2023, expecting a $300M to $500M hit on adjusted earnings.
- In a dispute involving over 30 U.S. states and 21 million users who claimed that Google's apparent monopoly led to fewer options and higher app fees, the company has tentatively settled a class action lawsuit alleging antitrust breaches in its U.S. Play Store.
- According to the state superintendent, Arizona will use $40M in federal COVID-19 relief funds to pay for tutoring for kids who are falling behind in their studies.
- Jacob Thaysen, a seasoned executive from medical devices company Agilent, has been appointed as the new CEO of Illumina, set to assume the role on Sept. 25.
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Term of the Day Cost of goods sold (COGS): COGS refers to the direct costs of producing or acquiring the goods that a company sells to its customers. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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