News That Caught My Eye: Week of December 14, 2018

Sundar Pichai’s Congress Testimony

 On Tuesday this week, Google’s CEO Sundar Pichai testified before the House Judiciary Committee

Via CNN 

  • The overall sentiment after the hearing was that, once again, Congress failed to ask questions that would have driven the conversation further. Most of all many of the senators failed to show a basic understanding of how the internet works or how Google’s business model works. So not much different to what we witnessed when Facebook’s Mark Zuckerberg went to Washington.
  • We all understand that in these hearings, partisan arguments play a big role in the line of questioning and so it seemed that a lot of the questions were more focused on driving a political agenda than getting to the root of the concerns about Google overall.
  • Republicans were fixed on search results pushing conservatives websites down the list implying that there are humans at Google that due to their own political believes tweak the algorithm to make that happen. One senator went as far as accusing Google to have people linking President Trump to the word idiot so that search results for idiot would bring up President Trump.
  • Democrats spent a lot of their time trying to explain to the Republicans how search works and almost doing Pichai’s job of defending Google.
  • China was of course a topic. You might remember that Google pulled out search in China in 2010 due to concerns about censorship but recently started experimenting with project Dragonfly which is, in fact, a censored search engine. When Pichai was asked about the project his answer was that Google has no plan to enter China at the moment and that they will be transparent when they do. Surprisingly nobody asked a follow-up question to this answer which should be: so why are you experimenting if there are no plans to launch?
  • Data collection was another topic. If you followed Mark Zuckerberg’s testimony you might remember he was asked whether some sort of regulation should be set for tech companies when it comes to data. To this, he replied: “I think the real question, as the internet becomes more important in people’s lives, is what is the right regulation, not whether there should be or not.” Pichai was asked a similar question on the right to privacy to which he replied: “I think a framework for privacy where users have a sense of transparency, control, and choice, and a clear understanding of the choices they need to make is very good for consumers.” It is fascinating to see how both answers point to a belief that both companies are already doing the right thing when it comes to data and privacy.

Asus CEO Resigns

 On Thursday, ASUS announced that long-time CEO Jerry Shen is stepping down ahead of “a comprehensive corporate transformation” — part of which involved a new co-CEO structure, as well as a major shift in mobile strategy to focus on gamers and power users.

Via Engadget

  • The CEO role will be split between Y. Hsu who will lead the PC business and Samson Hu who will lead the global customer service business. Jerry Shen will become the CEO and Chairman of the startup iFast focusing on B2B AIoT.
  • According to IDC ASUS held the number six spot in the PC market with 6% share in 3Q18. It had peaked in 4Q15 with 8.2% share when it reached number 4. In smartphones, IDC has ASUS at number 13 globally with less than 1% share in 3Q18
  • Interestingly in a Q&A translated into English by Digitimes, the current CEO blamed a friendly corporate culture that led to a group mentality which stopped innovation. This to me is such an interesting idea as I do see this being present in other Asian organizations but only in the lower ranks rather than management so I do wonder why within Asus it was able to jeopardize the entire business.
  • The shared CEO role has been working well for Huawei and even Samsung now has a similar setup. When companies are as big as Huawei and Samsung having a leadership that focuses on core businesses might make it more effective thanks to a deeper degree of focus. It seems a little bit of an overkill for a company like Asus, but the decision might be driven by a need for core-competencies. The new co-CEOs have also worked well together in the past in their role as joint COOs so this might also have played a role.
  • The stated new focus on gamers and power users to revamp the mobile business looks like a high-risk move to me. While I understand the mass market mobile phone business that the Zen line was addressing is a highly competitive one, I do not think these two segments are easy to conquer. Power users are extremely demanding and a lot of what they require today is software and experience driven not just hardware driven. It seems that brands like Xiaomi and OnePlus have strong bases among these users.
  • The gaming segment will see increased competition this year as Samsung at their developer conference publicly stated their desire to own the mobile gaming experience. that coupled with their new strategy to drive new tech features into the mid-tier will put pressure on competitors’ pricing.

Apple Opens New Campuses

 Apple today announced a major expansion of its operations in Austin, including an investment of $1 billion to build a new campus in North Austin. The company also announced plans to establish new sites in Seattle, San Diego, and Culver City and expand in cities across the United States including Pittsburgh, New York and Boulder, Colorado over the next three years, with the potential for additional expansion elsewhere in the US over time.

Via Apple 

  • Tim Cook had told President Trump that Apple was committed to generating thousands of new jobs. As announced in January, the company is on track to create 20,000 jobs in the US by 2023. In 16 states, Apple today employs over 1,000 people.
  • Some of the chosen locations might point to business areas that would benefit from a local talent pool. Seattle is home to Google AI business, Microsoft and Amazon possibly offering talent acquisition opportunity for AI, Cloud and content services. Austin is already seen as a Silicon Valley transplant with many companies already there including Apple. San Diego has, of course, plenty of talent in semiconductor seen how Qualcomm is based there.
  • To those concerns that so many different locations might make it more difficult for Apple to operate I say: don’t worry. Having been to Apple offices outside the US, I have to say that it does not matter if you are in London or Beijing when you are at Apple you are at Apple. That has been my experience over the years.
  • Diversifying locations might also help Apple to diversify its workforce more something that the company has put emphasis on resulting in small improvements but still a lot of work to do.

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Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

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