5/17/2016

Apple invests $1B in Uber’s Chinese Rival

Apple confirmed it invested $1 billion in Didi Chuxing, the Beijing-based ride-hailing company that rivals Uber in China. Didi Chuxing is valued at $25B and controls 90% of market share in China.

So what’s Tim Cook thinking? Some believe Apple is trying to get back in China's good graces after the Chinese government shut down iTunes Movies and iBooks last month. Perhaps this deal indicates Apple’s efforts to partner with Chinese firms instead of acting as a foreign competitor. 

Another theory is that Apple is trying a new way to tap into China’s emerging middle-class, which isn’t too crazy about the iPhone these days. By buying into ride-hailing, Cook seems to be thinking outside the box, recognizing that iPhones are not the only way to tap China's growing middle class. The deal may also give him some immunity from negative government or consumer sentiment, since Apple is riding the coat-tails of existing Didi investors Alibaba and Tencent.

 Or is it really all about the elusive Apple Car? The hiring of a slew of automotive engineers from the likes of Tesla Motors Inc. and Mercedes-Benz parent Daimler AG over the past two years has ignited speculation that Apple is investigating the development of a self-driving or electric vehicle. Talks with BMW AG and Daimler about prospective partnerships broke down last year over disagreements on who would own the data generated by the vehicles, Germany’s Handelsblatt newspaper reported last month.

Google to Pay People to Test Their Self-Driving Cars

Google is paying Arizona drivers 20 bucks an hour to test a self-driving car.

According to the job listing, the drivers (or self-driving vehicle operators, as Google calls it) need to have a clean driving record, no criminal history, a BS or a BA degree and the ability to type at least 40 words per minute.

The job involves driving 6-8 hours a day in a two person team, five days a week while monitoring the car's systems with "constant focus" and filling up daily reports. Test drivers give our engineers feedback about how our cars are driving and interacting with others on the road, and can take control of the vehicle if needed.

Google said at the time it wants to capitalize on Phoenix area's desert conditions and test how its autonomous vehicles behave in high temperatures.

Google already runs self-driving car testing programs in Mountain View, California, as well as Austin, Texas, and Kirkland, Washington.

Tesla Hires Audi Executive

Hochholdinger seems to be the perfect person to manage the production of the Model X, a high-volume mass-market vehicle.

Hochholdinger is a 22-year veteran of Volkswagen subsidiary Audi, where he worked across the entire production chain. He most recently led the production of Audi’s A4, A5, and Q5 vehicles, including 14 derivatives of those models. In all, Hochholdinger was responsible for the production of about 400,000 vehicles annually at Audi and managed thousands of employees, according to an emailed statement from Tesla. The exec has also acted as an advisor for bringing Audi’s new production facility online in Mexico.

New Crowdfunding Law Makes it Easier to be a Venture Capitalist

The new law will permit anyone, not just the super rich, to risk $2,000 a year or more investing in small companies in exchange for a stake in the business. Companies can raise up to $1 million a year this way. The new law represents an enormous shift, one that essentially permits anyone to become a venture capitalist. Until now, only accredited investors, meaning those with an annual income of at least $200,000 or a net worth of at least $1 million, have been permitted to take equity stakes in most private companies.

It is also an opportunity for start-ups and other small businesses, which can raise money with fairly few regulatory burdens. For instance, small companies seeking less than $500,000 and most first-time issuers will not need to provide audited financial statements, just unaudited ones.

“For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in,” President Obama said when he signed the bill into law that set these changes in motion.

However, When high-growth companies are looking to raise money, it’s not just for the money. They’re also looking for validation, and they want it from venture funds or well-known angels. They won’t get that from a crowdfunding offer.

But the people investing the companies will also be customers and advocates of the products.

Alibaba Getting Criticism for Counterfeit Products

An anti-counterfeiting group said it was suspending Alibaba's membership following an uproar by some companies that view the Chinese e-commerce giant as the world's largest marketplace for fakes.

Critics feared Alibaba would use IACC membership to gain legitimacy while papering over fundamental flaws in how it does business. Gucci and other brands owned by France's Kering Group allege in U.S. court filings that Alibaba knowingly profits from the sale of fakes. Alibaba has dismissed the case as "wasteful litigation."

Americans Are Now Working Past Retirement age

Almost 20 percent of Americans 65 and older are now working, according to the latest data from the U.S. Bureau of Labor Statistics. That’s the most retirement age people with a job since the early 1960s, before the U.S. enacted Medicare. Because of the huge baby boom generation that is just now hitting retirement age, the U.S. has the largest number of older workers ever.

Why are more people putting off retirement?

The first reason is that the financial crisis, and the tech bust before it, devastated many baby boomers' retirement savings. The ups and downs of the market can heighten their anxiety and keep them going into the office.

The second reason is that they enjoy their jobs or “want to stay involved.” Education probably comes into play here. People with college and graduate degrees tend to work later than those with less schooling,

The third reason is that employers have a greater incentive to keep older workers happy due to the U.S. unemployment rate at 5 percent, the lowest since 2008. They might not be able to replace them. With more education, these skilled, experienced workers have become more valuable to employers. In 1985, workers tended to earn the highest salaries of their careers in their 40s, the Center for Retirement Research study found. By 2010, those peak earning years had shifted from the 40s to the 50s. All age groups older than 50 earned more than they did 25 years earlier, with those in their late 60s making 30 percent more. Workers under 50 earned less than they used to.

The fourth reason is that older Americans are healthier and living longer. At last, many Americans have more time to do what they want to do. With a rise in average life expectancy, a longer career doesn’t necessarily mean a shorter retirement.

And Last but not least, the fifth reason is that retirement might not be as much fun as people think. Retirement could be the death sentence of boredom.

Apple to Open Retail Stores in India

In January, Apple said it had asked the Indian government for approval to open retail stores and sell products online there directly.

Anja Manuel, author of "This Brave New World: India, China, and the United States," said Apple is right to make India a real focus. India already has nearly as many smartphone users as the U.S., and will likely have more by the end of 2016.

Manuel said the Indian government seems to be doing its part to help Apple succeed. The government reportedly recommended that Apple should be allowed to open its iconic retail stores, even though Indian regulations normally require that company’s source 30 percent of materials locally.

The issue of polluting, toxic e-waste is a sensitive one in India, since several other countries dump their electronic waste in India, Manuel said. Apple has touted in its 2016 environmental report that it's working with over 160 recyclers around the world, and the company has kept more than 597 million pounds of equipment out of landfills since 1994.

Apple supplier Foxconn, based in Taiwan, is also reportedly making inroads in India. Last year, an Indian official said Foxconn plans to spend $5 billion on factories in the western Indian state of Maharashtra.

Amazon Releases Private Label Products

Amazon's shift into private label grocery offerings is geared towards millennials. The generation that's grown up with the Internet has shown more loyalty to distributors — say flight-and hotel-aggregator Kayak.com or delivery services Uber Eats — than the end brand that provides the good or service. In the case of an Amazon-branded coffee or detergent, Amazon already “owns” the customers' loyalty and trust, which means its own name carries weight, says Lempert. The private label means the item is likely to be cheaper — a draw for America's largest living generation, who are now in their 20s and early 30s.

In the grocery world, private label brands are a big money maker. The items are often produced in the same plants as name- brand items but are labeled with a store brand, saving all the cost of advertising and thus allowing them to be sold for less.

A full 88% of consumers say they buy private label, primarily because of price, according to Market Track. If they have to make a decision between a private label and a national brand, and the private label brand has a lower price, they go for the the private label at a rate of 80%, the firm's survey's show.

The products will be available only to Amazon Prime members, according to the Wall Street Journal. Members pay $99 a year for two-day delivery, free streaming video and a host of other extras. The build-out is part of Amazon’s long-term plan to further pull Americans into its retail world with Prime membership.

The entire Amazon ecosystem revolves around Prime.

That's because Prime members are so lucrative. They  spend on average about $1,100 per year, compared with about $600 per year for non-members, according to Consumer Intelligence Research Partners.

There were 54 million Prime members in the United States at the end of 2015, 21% of the U.S. adult population.

The private-label offerings will not only provide Amazon with an edge in new product development (by providing more tailored data on what consumers are buying), but will also boost its Amazon Prime subscription service because the private label products will be members-only.

Regulators Reject Pfizer Allergan Acquisition

U.S. drug maker Pfizer Inc agreed to terminate its $160 billion agreement to acquire Botox maker Allergan Plc, in a major victory to U.S. President Barack Obama's drive to stop tax-dodging corporate mergers.

The decision to end the biggest tax "inversion" ever attempted, which would have seen Pfizer slash its tax bill by redomiciling to Ireland where Allergan is registered, came a day after the U.S. Treasury unveiled new rules to curb inversions.

While these new rules did not name Pfizer and Allergan, one of their provisions targeted a specific feature of their merger; Allergan's previous history as a major acquirer of other companies. The subsequent demise of the deal allows Obama to claim a big win during his last year in office.

Pfizer will have to pay Allergan up to $400 million for its expenses as a result of terminating the deal, according to their merger agreement.

Burger King Opened a Spa

Burger King recently opened a spa in one of its Helsinki, Finland locations, featuring saunas and steam rooms.

The restaurant’s 15-person sauna, according to its website, is ideal for social gatherings, birthday parties and other events.

A separate 10-person sauna is decked out with a 48-inch television. Other than the steam rooms, visitors can relax in the media lounges where amenities include a 55-inch television, Playstation 4 area, and laundry room.

In case patrons get hungry during their steam, Whoppers are accessible both in the sauna and restaurant — though you have to book your spa trip in advance.