News That Caught My Eyes: Week of November 2, 2018

Google’s Employees Walk Out

On Thursday, there were a series of employee walkouts at around twelve Google offices around the world. The demands of the employees:

  • And end to forced arbitration
  • A commitment to end pay and opportunity inequality
  • A publicly disclosed sexual harassment transparency
  • A clear, uniform, globally inclusive process for reporting sexual misconduct safely and anonymously.
  • Promote the Chief Diversity Officer to answer directly to the CEO and appoint an Employee Representative to the Board

Via Recode

  • I covered the New York Times story about Rubin last week and as I said, Google should be doing more and it seems that many employees thought that too.
  • While Pichai had responded to the New York Times story he had not offered any concrete steps on how he was planning to change processes and culture
  • On Thursday, Pichai showed his support by sending a letter to the employees saying managers were informed of the walkouts and supportive and so was he: “I understand the anger and disappointment that many of you feel. I feel it as well, and I am fully committed to making progress on an issue that has persisted for far too long in our society… and, yes, here at Google, too.”
  • While Pichai’s letter shows empathy, once again, it fails to give concrete suggestions on what he and the board will implement to drive culture change.
  • Google’s employees have been vocal before about Google’s projects like Dragonfly (the censored search-engine for China) and Project Maven (for better AI for the US Military).
  • A week after the Project Maven protest, Pichai released ethical guidelines for AI so it will very interesting to see what his response is after today.
  • This is of course not just a Google issue and I feel any company that will step up first in creating new processes along the line of the demands put forward by the Google employees will have not just a hiring advantage but a better working culture that will ultimately benefit the overall business.


Royole’s bendy-screen unveiled in China 

Royole Corporation – a specialist in manufacturing flexible displays – unveiled the FlexPai handset at an event in Beijing. When opened, the device presents a single display measuring 7.8in (19.8cm) – bigger than many tablets. But when folded up, it presents three separate smaller screens – on the front, rear and spine of the device.


  • It is quite impressive that this six-year-old California based company was able to be first at what Samsung, LG, and Huawei all promised to do soon.
  • The demo of the device launched at an event in Beijing looked pretty rough, but that is not a big issue given the company plans to sell mostly to developers at a pretty hefty price too.
  • Despite their stated intent to want to seed this device to developers one has to wonder if they wanted to show their tech early to land a deal or even an acquisition from one of the main vendors.
  • I remain skeptical about foldable screens on a phone for a few reasons:
    • Apps optimization
    • The overall thickness of the device
    • Price
  • If the price is too high for mainstream adoption then app optimization will lag which in turn will delay volume sales and price decline.
  • This was one of the big reasons why larger tablets never took of in the Android ecosystem and I fear foldable phones might die a similar death.

Apple’s Q3 Earnings

Revenue reached $62.9 billion, which is a 20% increase. For fiscal year 2018, revenue grew over $36 billion to $265.6 billion, an all-time record. Apple experienced double-digit growth in all geographic segments and new revenue records in almost every market we track.

  • This was the best quarter ever for Services, with revenue up 27% to an all-time record of $10 billion.
  • iPhone revenue grew 29% year-over-year, and the installed base again grew by double digits.
  • Apple returned more than $23 billion to investors during the quarter, including almost $20 billion in share repurchases.
  • In the December quarter Apple expect revenue to be between $89 billion and $93 billion.

Via Apple 

  • Apple stock declined after earnings due to the softer guidance for 4Q18. Interestingly this was in large due to expected continued weaker consumer confidence in emerging markets and continued weakness of the Dollar.
  • It seemed that Apple factored in a prolonged weakness of the $ following the mid-term elections.
  • iPhone ASPs stole the show with a 28% increase year over year driving growth in revenue despite units. We should see a similar trend in iPads once the new iPad Pro models start shipping.
  • As it happened with the iPhone last year, ASP guidance for next quarter is softer due to the mix of products which more early adopters’ purchases of the iPhone Xs Max happening in the third quarter.
  • Demand in China continued to look healthy across product lines which is always good news
  • Services revenue grew to $10 billion with 300 million subscriptions. While the first number is impressive it is the second that speaks to how prosperous Apple’s future will be as it moves into more subscription option with the rumored video service and news service
  • Some believe that part of the share decline following the call was linked to the announcement that Apple will adopt new reporting practices that involve no longer reporting unit volumes. Apple will report revenue by product line only.
  • This should not really be a surprise as we see market saturation limiting sales but ASP increase and mix shift benefitting revenue. Apple seems to be forcing the hand of investors after asking for months to look at other data points that help to understand the health of the company other than unit volumes alone.
  • On the call, Luca Maestri pointed out that other vendors such as Samsung do not release unit volumes which albeit true should not be a decision driver on Apple’s part nor a justification.
  • Tim Cook talked about the retail business both in terms of stores opened and activities within the stores from Kids camps to sessions. We heard those numbers on stage in Brooklyn at the voice of Angela Ahrendts. It is amazing how these stores continue to be a strong revenue generator, marketing opportunity and now a learning center for many users. Apple is educating customers in doing more with their devices and as I said many times engagement drives loyalty.
  • For the holiday quarter, it will be interesting to see how the iPhone XR will do and what Apple learned about planning for three different products at the same time when it comes to production.
  • On the iPad and Mac front, it seems that pre-orders of the new models are going well but of course it is very early days.


Published by

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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