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Epic fight ends in a draw, sort of
Also in today’s edition: ISRO to help fire private rockets, Mark picks up the privacy banner, Ford concedes defeat in India
Good morning! Bezosism. That’s what The Wall Street Journal is calling Amazon’s management system. It says the system is surveillance, measurement, psychological tricks and other tech-charged methods to speed up the conveyor belt. Modern Times, really!
The Market Signal
Stocks: Indian stocks will likely look to the US and European markets for cues in the coming week. The European Central Bank has slowed bond purchases after an inflation surge in the region. Investors are keenly awaiting US inflation numbers due Tuesday. A spike could push the Fed to tighten monetary policy sooner than expected.
Privacy, Please: WhatsApp’s New Powerplay
Mark Zuckerberg wants to steal a march over Tim Cook, on privacy. Facebook-owned WhatsApp is introducing a new feature that will allow users to encrypt images, videos and audio backed-up on iCloud or Google Drive using a secure key that only the user will have access to.
One up: WhatsApp’s move comes at a time when privacy champion Apple seems to be headed the other way. The iPhone maker has come under fire for its plans to scour users’ phones for child sexual abuse material. Critics can’t stomach it but governments love it.
Checkmate: Unlike WhatsApp’s proposition, Apple has access to user encryption keys. “WhatsApp is the first global messaging service at this scale to offer end-to-end encrypted messaging and backups…,” Zuckerberg said in a statement. True, this is why it may face some pushback from regulatory authorities across the world for dampening their surveillance plans.
ISRO Takes A Private Route To The Sky
The Indian Space Research Organisation (ISRO) is becoming a platform for private companies that want to explore space. Hyderabad-based startup Skyroot Aerospace has inked a deal with ISRO to use its facilities and know-how for its own rocket launches.
Launch off: Skyroot is the first private firm to tie up with ISRO after the government allowed private players entry into the strategically important sector. So far, private companies could only make components and sub-systems for ISRO. Private companies can now set up and operate rocket launch sites with permission from the newly set up space regulator, Indian National Space Promotion & Authorization Centre.
This is the second and better planned attempt at commercially leveraging ISRO’s capabilities. A previous attempt was botched up and ended in costly arbitration.
Ford Leaves The Field
US carmaker Ford will stop making cars in India and shut factories in Tamil Nadu and Gujarat. Ford, which was one of the first automobile companies to enter when India opened up its economy in 1991, reportedly ran up losses of over $2 billion in the past 10 years.
An ecosystem collapses: The company has about 4,000 employees and 170 dealers, The Economic Times reported. It also has contracts with hundreds of small component suppliers that will also take a hit.
Auto hub: Ford is the third US vehicle company that is leaving India after General Motors and motorcycle maker Harley Davidson. Ford’s and Tata’s Nano (which also stopped production) were among car making projects cuddled by Narendra Modi, who was then Gujarat chief minister, in an attempt to make the state an auto hub.
US automakers have clearly failed to understand and adapt to India. Global plans made in Michigan could not fully appreciate the angularities of local preferences, something Asian rivals such as Hyundai and Suzuki mastered quickly. Ford’s bestselling vehicle since 1948 in the US market is the F-series pickups. It never attempted to leverage its engineering and design chops to make a truck suited for India. Besides, India itself did not live up to its promise of a big market. While it does have an aspirational middle class, it is price conscious and not big enough to accommodate too many carmakers. The most competitive small car market is too crowded and may be saturated even. Ford did find moderate success with its crossover SUV Ecosport but failed to build on it.
A Tax Haven Next Door?
Sri Lanka passed a new Finance Bill last week, which, combined with another law to create a tax-free enclave, has raised fears that the island nation could turn into a haven for money laundering and tax evasion.
What happened: Sri Lanka, which relies heavily on tourism and commodity exports for foreign exchange, is on the verge of a default as reserves have dipped to $2.8 billion even as debt repayments loom. The country has already declared a food emergency.
New law: Critics have slammed President Gotabaya Rajapaksa’s move to shore up finances with a tax amnesty scheme, the 14th since 1963. They say that the proposed penalty of 1% will only be a perverse incentive to evade more tax, deepen the black economy, and help legitimize past crimes.
Port trouble: India’s worry would be the Colombo Port City Economic Commission law that, some warn, may turn it into a haven for tainted money.
Apple vs Epic: Who Exactly Won?
September is an important month on Apple’s calendar. In 2021, however, the month goes beyond new iPhones and Apple Watch as is custom, and strikes at the core of Apple's ecosystem: The App Store.
The Verdict: It was a mixed bag for both Apple and Epic Games in court. The judge ordered Apple to allow apps to use different payment methods, a win for Epic but not a big one. More importantly, the judge ruled that the App Store isn't a monopoly and recognised Apple's restrictions on developers as a means of providing more security. So Apple can continue to block third party app stores on its platform.
The hiccup: The ruling blunts the most potent monopoly-fighting weapon in the US—the Sherman Act—and puts the US Justice Department's investigation in jeopardy. Yet, Apple has had setbacks in South Korea and Japan. A tough antitrust law that targets Apple and Google is in the works at the Capitol as well.
Meanwhile, expect Apple to have a blockbuster launch of its new devices and quarterly earnings.
What Else Made The Signal?
New guard: Bhupendra Patel has taken over as Gujarat chief minister replacing Vijay Rupani. It is the third BJP ruled state to effect a change of guard in the past three months after Uttarakhand and Karnataka.
In parts: Facebook provided partial data to misinformation researchers in the US looking into how users interact with the platform. It issued an apology for the same.
NFT clarity: The government of India is speaking to experts on what non-fungible tokens are so it can figure out how to define it in the new cryptocurrency draft bill.
Get pally: China has ordered Alibaba and Tencent to be more friendly with each other and stop banning the other’s website links on their respective platforms.
Going big: Neobanking platform Open has secured around $62 million in a funding round from Temasek, Google and existing investors such as Tiger Global Management and 3one4 Capital.
Only green: Harvard University’s $42 billion endowment will not invest in fossil fuel companies in future.
Fantasy becomes reality: Indian javelin thrower Neeraj Chopra realized a dream of his that did not involve winning a gold medal at the Olympics. He took his parents on their first ever-flight and tweeted a picture of the proud parents and a beaming self. How heartwarming!
Ape art: The NFT craze has a long way to go before dying down. A bunch of ape NFTs from Bored Ape Yacht Club sold for $24.4 million at Sotheby’s.
What’s in the stars: The pandemic has people looking up at the sky for relief. Not star-gazing, but astrology. Palmists, tarot card readers and astrologers have seen a spurt in business over the last 16 months.
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