Posts Tagged ‘apple’
“Other things stop working or they break, But batteries… they die”*…
There’s been a great deal of talk about semiconductors and the implications of a supply chain that depends too heavily on China– and some action (c.f., e.g., here and here). Fair enough: chips are clearly central to the economy into which we’re growing; assuring access matters. But let us not forget their humble technological cousin, the battery. Batteries power an increasing number of the appliances on which our lives increasingly depend; with the world gearing up for the electric vehicle era, we’re going to need them even more. So it could be an issue that the world is much more reliant on China for batteries than for chips…
Battery manufacturing has become a priority for many nations, including the United States. However, having entered the race for batteries early, China is far and away in the lead… In 2022, China had more battery production capacity than the rest of the world combined…
Global lithium-ion manufacturing capacity is projected to increase eightfold in the next five years… China’s well-established advantage is set to continue through 2027, with 69% of the world’s battery manufacturing capacity…
Battery manufacturing is just one piece of the puzzle, albeit a major one. Most of the parts and metals that make up a battery—like battery-grade lithium, electrolytes, separators, cathodes, and anodes—are primarily made in China.
Therefore, combating China’s dominance will be expensive. According to Bloomberg, the U.S. and Europe will have to invest $87 billion and $102 billion, respectively, to meet domestic battery demand with fully local supply chains by 2030…
More (and a larger version of the graphic above) at “Visualizing China’s Dominance in Battery Manufacturing (2022-2027P),” from @VisualCap.
* Demetri Martin
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As we recharge, we might recall that it was on this date in 1984 that Apple aired an epoch-making commercial, “1984” (directed by Blade Runner director Ridley Scott), during Superbowl XVIII– for the first and only time. Two days later, the first Apple Macintosh went on sale…. battery-dependent portables followed a few years later.
“Create more value than you capture”*…
A thoughtful consideration of Web 3.0 from the always-insightful Tim O’Reilly…
There’s been a lot of talk about Web3 lately, and as the person who defined “Web 2.0” 17 years ago, I’m often asked to comment. I’ve generally avoided doing so because most prognostications about the future turn out to be wrong. What we can do, though, is to ask ourselves questions that help us see more deeply into the present, the soil in which the future is rooted. As William Gibson famously said, “The future is already here. It’s just not evenly distributed yet.” We can also look at economic and social patterns and cycles, using as a lens the observation ascribed to Mark Twain that “history doesn’t repeat itself, but it rhymes.”
Using those filters, what can we say about Web3?…
There follows a fascinating– and educational– analysis of the state of play and the issues that we face.
Tim concludes…
Let’s focus on the parts of the Web3 vision that aren’t about easy riches, on solving hard problems in trust, identity, and decentralized finance. And above all, let’s focus on the interface between crypto and the real world that people live in, where, as Matthew Yglesias put it when talking about housing inequality, “a society becomes wealthy over time by accumulating a stock of long-lasting capital goods.” If, as Sal Delle Palme argues, Web3 heralds the birth of a new economic system, let’s make it one that increases true wealth—not just paper wealth for those lucky enough to get in early but actual life-changing goods and services that make life better for everyone.
“Why it’s too early to get excited about Web3,” from @timoreilly.
See also: “My first impressions of web3” from Matthew Rosenfeld (AKA Moxie Marlinspike, @moxie, founder of @signalapp).
* Tim O’Reilly
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As we focus on first principles, we might recall that it was on this date in 2007 that Steve Jobs introduced the iPhone at MacWorld. The phone wasn’t available for sale until June 29th, occasioning one of the most heavily anticipated sales launches in the history of technology. Apple sold 1.4 million iPhones in 2007, steadily increasing each year; estimated sales in 2021 are 240-250 million.
“There are two times in a man’s life when he shouldn’t speculate: when he can afford to and when he can’t.”*…
Robinhood, the trading platform supposedly meant “to democratize finance for all”: not all change is progress; not all “disruption” is for the good…
… What is Robinhood?
The company operates a mobile app that enables consumers to trade stocks, options, and crypto. These orders are the company’s inventory, which it sells to “market makers” — large financial institutions that pare (execute) the trades in the market. As with Google or Facebook, Robinhood’s users are not its customers, but its supply.
This means Robinhood is incentivized to keep its users trading … a lot. The goal: make stock trading as addictive as social media scrolling. RH has enjoyed success here. The proportion of users who check it daily rivals those of Twitter, Snapchat, and Facebook.
…
The transaction at the heart of the company’s model is “Payment for Order Flow” or PFOF. Because RH generates its revenue by selling orders to market makers, it doesn’t charge commissions to its consumer users. But this also creates a conflict of interest for the company, which is motivated to sell orders to the market maker that offers the highest payment for the trade rather than the best price. It’s like affiliate marketing, but for your financial future.
PFOF goes back to the 1980s, when it was pioneered by, wait for it … Bernie Madoff. Madoff relied on the practice to make his firm one of the leading market makers of its day, and when regulators raised questions about whether it presented a conflict of interest, he used his position as the chairperson of Nasdaq to prevent restrictions. (PFOF is illegal in the U.K.) There was no conflict of interest, Madoff assured his colleagues, because “there are very strict rules that I would assume most firms comply with.”
Robinhood is the latest example of an increasing trend: tech companies for whom illegality is a feature, not a bug. Uber is an $86 billion gypsy cab company. Facebook and Google have received so many fines, it’s likely the companies internally classify them as a cost of doing business. This is tantamount to replacing civics courses with prison training, because … well … that’s how we roll.
For its part, RH has racked up: a $70 million settlement with FINRA, a $65 million SEC fine (for failing to properly disclose PFOF), and a separate $1.25 million FINRA fine. And on Wednesday, on the eve of pricing its IPO, the company disclosed that its senior executives are under investigation by FINRA for failing to acquire broker-dealer licenses. In addition, another inquiry is under way into the possibility that RH employees made illegal insider trades during the GameStop frenzy early this year.
Once, that type of disclosure would have dismembered an IPO. Instead, 48 hours after it made the disclosure, Robinhood was publicly trading at $32 billion. Telling point: The company paid its chief legal officer, Daniel Gallagher, more than $30 million in 2020, even though it hired him halfway through the year. From 2011 to 2015, Gallagher was an SEC Commissioner. Our business environment has morphed from capitalism, which depends on the rules of fair play, into cronyism.
Flouting the law is now a signal to investors that a firm is “disruptive.” Established companies, which believe they have too much to lose, have spent years investing in a culture of compliance to protect themselves. Disrupters, with access to cheap capital and few legacy assets, have no such constraints. In Robinhood’s case, no less an establishment bulwark than Goldman Sachs has blessed its approach to business by taking the lead on the company’s IPO. Forget orange — criminality without consequence is the new black.
…
In practice, Robinhood’s activities look more like the dispersion of financial risk than the “democratization of finance” — kind of like if a for-profit prison claimed to be “democratizing housing.” As both an app and as an investment, RH makes more sense in the context of gambling than investing. Its business model depends on active traders, but research shows the more active traders are, the more money they lose. Likewise, the casino isn’t making much off the blackjack player who sits at the $5 table cadging free drinks, but it hopes the lure of easy money (and the lubrication of those free drinks) will loosen his pockets eventually.
Greater gambling access is becoming a trend. The illegal sports betting market, estimated at $150 billion a year, is rapidly moving to legal online forums. You can now place a sports bet from your couch in 20 states and counting, and mobile gambling apps are reaping the rewards. Since its SPAC listing in April 2020, DraftKings’ stock is up 160%. I don’t have a problem with this, as these firms state what they’re made for: gambling.
Another market that’s benefited from our insatiable appetite for risk? Crypto. Robinhood caught that trend early and introduced crypto trading to its platform in February 2018. Since then, the global crypto market has grown from $450 billion to $1.9 trillion. In the first three months of 2021, 6% of RH’s revenue came from Dogecoin trades. If that sounds like an unstable business model, trust your instincts.
Here’s what we’re saddled with: A trend of companies that prey on our financial naiveté, with no regard for law or morality and infinite amounts of capital. What can we do?
First, it’s long past time for the rule of law to reassert itself. Five years ago, admissions to elite universities were awash in bribery and fraud. Then the feds put some wealthy lawyers, investors, and television stars in jail. Did it work? I’d venture that if any parent receives an offer of a “side door” for their kid to get into an elite university today, the parent hangs up, crisply.
Second, we need to arm ourselves, and particularly our young people, with financial literacy. Everyone should be fluent in the basics of markets and how to build financial security. My NYU colleague Aswath Damodaran believes the best regulation is life lessons. Perhaps basic lessons in finance (e.g., not to trade on an app that harvests its orders for revenue) would lessen the pain of these lessons. If we can offer computer science and Mandarin in schools, we should offer courses in financial literacy. The English-as-a-second language course in any capitalist society ought to be in money.
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We’ve implemented policies in the U.S. that have resulted in a halving of the wealth of Americans under the age of 40 (as a percentage of household wealth) over the past three decades. With so much less to lose, today’s young Americans are justifiably looking for new asset classes and embracing volatility. Put another way, there is cause for a rebellion. The food industrial complex wants you to be fat, social media wants you to be divided, and RH wants you to believe you can get rich quick by day trading. Rebel.
When the democratization of finance isn’t: “$HOOD.” Scott Galloway (@profgalloway) on the dangerously disingenuous Robinhood.
* Mark Twain
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As we reconcile ourselves to the fact that if it seems to be too good to be true, it is, we might recall that it was on this date in 2018 that Apple became the first U.S.-based company with a $1 trillion market cap. Shares of Apple rose 2.9% on the day, closing at $207.39, giving the company a $1.002 trillion valuation. Shares of Apple’s stock were up about 40,000% since Apple computer’s IPO on December 12th, 1980.
Amazon broke the $1 trillion milestone a month later on September 4th, 2018. Microsoft reached the milestone nearly a year later, on April 25th, 2019.
“Patents need inventors more than inventors need patents”*…
Patents for invention — temporary monopolies on the use of new technologies — are frequently cited as a key contributor to the British Industrial Revolution. But where did they come from? We typically talk about them as formal institutions, imposed from above by supposedly wise rulers. But their origins, or at least their introduction to England, tell a very different story…
How the 15th century city guilds of Italy paved the way for the creation of patents and intellectual property as we know it: “Age of Invention: The Origin of Patents.”
(Image above: source)
* Fun IP, Fundamentals of Intellectual Property
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As we ruminate on rights, we might recall that it was on this date in 1981 that IBM introduced the IBM Personal Computer, commonly known as the IBM PC, the original version of the IBM PC compatible computer design… a relevant descriptor, as the IBM PC was based on open architecture, and third-party suppliers soon developed to provide peripheral devices, expansion cards, software, and ultimately, IBM compatible computers. While IBM has gone out of the PC business, it had a substantial influence on the market in standardizing a design for personal computers; “IBM compatible” became an important criterion for sales growth. Only Apple has been able to develop a significant share of the microcomputer market without compatibility with the IBM architecture (and what it has become).
“The future is there… looking back at us. Trying to make sense of the fiction we will have become”*…
Tim Maughan, an accomplished science fiction writer himself, considers sci-fi works from the 1980s and 90s, and their predictive power. Covering Bruce Sterling, William Gibson, Rudy Rucker, Steven King, P.D. James, an episode of Star Trek: Deep Space Nine, and Bladerunner, he reserves special attention for a most deserving subject…
When you imagine the future, what’s the first date that comes into your mind? 2050? 2070? The year that pops into your head is almost certainly related to how old you are — some point within our lifetimes yet distant enough to be mysterious, still just outside our grasp. For those of us growing up in the 1980s and ’90s — and for a large number of science fiction writers working in those decades — the 2020s felt like that future. A decade we would presumably live to see but also seemed sufficiently far away that it could be a world full of new technologies, social movements, or political changes. A dystopia or a utopia; a world both alien and familiar.
That future is, of course, now…
Two science fiction books set in the 2020s tower over everything else from that era in their terrifying prescience: Octavia Butler’s Parable of the Sower (1993) and Parable of the Talents (1998). These books by the late master kick off in 2024 Los Angeles and are set against a backdrop of a California that’s been ravaged by floods, storms, and droughts brought on by climate change. Middle- and working-class families huddle together in gated communities, attempting to escape the outside world through addictive pharmaceuticals and virtual reality headsets. New religions and conspiracy theory–chasing cults begin to emerge. A caravan of refugees head north to escape the ecological and social collapse, while a far-right extremist president backed by evangelical Christians comes to power using the chillingly familiar election slogan Make America Great Again.
Although it now feels like much of Butler’s Parable books might have been pulled straight from this afternoon’s Twitter or tonight’s evening news, some elements are more far-fetched. The second book ends with followers of the new religion founded by the central character leaving Earth in a spaceship to colonize Alpha Centauri. Butler originally planned to write a third book following the fates of these interstellar explorers but, sadly, passed away in 2005 before she had a chance. She left us with a duology that remains more grounded and scarily familiar to those of us struggling to come to terms with the everyday dystopias that the real 2020s seem to be already presenting us.
Not that this remarkable accuracy was ever her objective.
“This was not a book about prophecy; this was an if-this-goes-on story,” Butler said about the books during a talk at MIT in 1998. “This was a cautionary tale, although people have told me it was prophecy. All I have to say to that is I certainly hope not.”
In the same talk, Butler describes in detail the fears that drove her to write this warning: the debate over climate change, the eroding of workers’ rights, the rise of the private prison industry, and the media’s increasing refusal to talk about all of these in favor of focusing on soundbite propaganda and celebrity news. Again, these are fears that feel instantly familiar today…
What Blade Runner, cyberpunk– and Octavia Butler– had to say about the age we’re entering now: “How Science Fiction Imagined the 2020s.”
* William Gibson, Pattern Recognition
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As we honor prophets, we might recall that it was on this date in 1984 that Apple aired an epoch-making commercial, “1984” (directed by Blade Runner director Ridley Scott), during Superbowl XVIII– for the first and only time. Two days later, the first Apple Macintosh went on sale.
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