Border Skirmishes: Tech Edition

An assertive China flexed its military and technological muscle in the past week, engaging in a physical scuffle with Indian troops at Galwan in Ladakh. The escalation was allegedly defused following a tête-à-tête between high-level officials from both sides. India nevertheless retaliated by barring BSNL from purchasing telecom equipment from Huawei and ZTE. Does the general mistrust of Chinese businesses, especially regarding the separation of church and state in the communist country, hand the advantage to American tech companies?

Tech stocks in the US have been particularly resilient to the economic fallout of the coronavirus pandemic. The stock prices of Facebook, Netflix and Amazon each hit a record since the outbreak of the pandemic. Apple and Google-parent Alphabet have also done reasonably well. However, if an analyst at Bernstein – a global asset management firm – is to be believed, border skirmishes might break out between the two companies. Apple and Google have tread lightly when encroaching upon each other’s territory. On November 1, 2019, Google announced that it had bought Fitbit for $2.1 billion in its quest to gain a toehold in the wearable-devices market dominated by the Apple Watch. Although they share a few similar features, Fitbit’s fitness trackers are priced lower than their Apple counterparts and do not have advanced smartwatch functions, making it possible for the two to coexist in a saturated market overrun by cheaper alternatives from the likes of Xiaomi, Huawei and Realme.

Ditto smart speakers, laptops, music-streaming services, and even smartphones. But these have been relatively low-hanging fruit for Google. Apple has made no bones about its contempt for its rival’s ad-based revenue model. At CES 2019, Apple placed a banner near the entrance to the conference that said “What happens on your iPhone, stays on your iPhone,” an apparent dig at Google, which generated $33.8 billion in Q1 2020 from selling ads on its search engine. Google shares some of this money with Apple for market access to the latter’s walled garden. Privacy has been Apple’s raison d’être, and Bernstein analyst Toni Sacconaghi reckons that decoupling with Google’s search engine could be in Apple’s best long-term interest. He insists that with a strategic acquisition or two, Apple could take to the murky depths of the internet like a duck to water.

According to Sacconaghi’s calculations, Apple receives between $7 billion and $8 billion per year from Google to be the default search engine on iOS and Siri. This amounts to 30% of the $25 billion Google rakes in from advertisers on Apple devices. Both Apple and Alphabet are tight-lipped regarding the quantum of money that changes hands between the two. Sacconaghi believes the amount is in the ballpark of $8 billion. He told Barron’s that Apple ought to consider acquiring privately-held DuckDuckGo, which is fourth in terms of popularity, behind Google, Bing, and Yahoo. He is of the opinion that this deal can be cut for around $1 billion, which is less than what Apple makes in a week.

Antitrust regulators will likely have a field day if Apple does indeed go hunting for DuckDuckGo. Google could lose around $15 billion a year, the Bernstein report estimates. Contrary to what many people might think, nothing comes for free, even on the internet. Since ads will presumably not be a part of a hypothetical Apple search engine, will it be free to use? Netizens have hitherto paid for information on the web by glibly signing over their data for use by advertisers. What if Apple decides to monetise its search engine by charging a subscription fee? Will Apple loyalists and privacy hounds pay up? What about media organisations dependent on digital ad revenue? The jury is out.

A Sigh Of Relief: Apple iOS 13.3 Released, Reportedly Fixes The Most ‘Annoying’ Bugs

A Lifesaving Update, Indeed!

Back when Apple announced iOS 13 at the last WWDC (Worldwide Developers Conference), probably no Apple user had expected so many bugs and issues to creep into their phones. Apple delivered most of the features it had promised with iOS 13.2 which was rolled out on October 30.

However, to fix the problems that users are facing, Apple has released iOS 13.3 to those who had signed up for beta testing. Reportedly, iOS 13.3 has fixed quite a few bugs, including the one which is being dubbed as the most ‘annoying’ problem till date.