Tuesday 23/04/19

1. In COMMODITY NEWS, Oil rises on the expiry of Iran waivers and the US approaches a UK firm to supply rare metals
2. In TECH NEWS, Huawei defies US pressure with rising revenues, Samsung’s Fold hits a hitch and TikTok gets used as a cheap marketing tool
3. In INDIVIDUAL COMPANY NEWS, Tesla is on fire with its cars (literally) and promises of robo taxis while Kraft Heinz gets a new CEO
4. In OTHER NEWS, I bring you a gorilla selfie. For more details, read on…

So the US stirs things up in oil and rare metals…

Oil prices jump as Trump halts waivers on Iran sanctions (The Times, James Dean) is a story doing the rounds in the broadsheets as the US stated yesterday that it wouldn’t renew waivers that let eight countries (Italy, Greece, Turkey, China, India, Japan, South Korea and Taiwan) import Iranian oil without US reprisals following the reimposition of sanctions on Iran in November last year. The waivers let these countries buy oil for Iran for six months without breaching US sanctions if they could show that they were winding down their purchases. They are due to to expire on May 2nd and will not be renewed, but it is understood that Italy, Greece and Taiwan have already reduced their Iranian oil imports to zero. The Americans have said that they are working with Saudi Arabia and the UAE to supply the oil that Iran would have done to ease the pressure. * SO WHAT? * This statement led to oil prices rising by around 3% as the inevitable conclusion is that demand for oil from non-Iranian sources will increase, thus squeezing supply.

US government taps UK firm to secure rare metals (Daily Telegraph, Hasan Chowdhury) is an interesting story that highlights news that the Overseas Private Investment Corporation (OPIC), a US government agency, is currently in talks with London-based mining company TechMet with a view to investing in the firm in order to ensure better supplies of rare metals needed for the mass-production of electric vehicles. Concern is growing in the US over the control that China has over supply and processing of materials such as cobalt and lithium, so it is looking to get its supply from non-China related sources. TechMet is also pursuing a joint venture with the US military to recycle lithium ion batteries, which could increase the amount of lithium supplies considerably. * SO WHAT? * The US is quite right to be concerned about the stranglehold that China has on rare metal supply. For instance, over 60% of the world’s cobalt comes from the Democratic Republic of Congo, where Chinese mining companies are overwhelmingly prevalent. Everyone is trying to secure their own supply but I think that the recycling thing is icing on the cake and could be a winner for both sides as mass moves towards electrification of transport continues globally.

Huawei sticks two fingers up at the US, Samsung’s Fold woes and TikTok as a marketing tool…

Huawei revenue rises 39% despite US pressure on 5G (Financial Times, Louise Lucas) shows a strong performance from the under-pressure Chinese telecoms equipment company despite attempts by the US to kill its growth due to security risk concerns. The 39% revenue increase was comfortably above last year’s 19.5% rise and the net profit margin was also higher than last year’s level. Huawei overtook Apple as the world’s #2 supplier of smartphones in the second quarter last year and remains on track to topple Samsung in the top spot. * SO WHAT? * Huawei’s vast resources have seemingly been able to weather the US onslaught and its massive investment in R&D has clearly been paying off. Still, I have to say that I would be surprised if Huawei can carry on like this given the number of countries that have decided to cut them out of 5G plans completely, with others restricting their involvement. Call me cynical, but Huawei is privately held and its numbers are unaudited so you’d think that there is opportunity for a bit of turd-polishing here…

There’s embarrassing news in Samsung Galaxy Fold delayed after folding feature breaks screens (The Guardian), which shows that the South Korean consumer electronics giant is having to make an embarrassing climbdown as it has been forced to postpone the launch of its $2,000 wonder-phone (it was due to launch this Friday) following reports from reviewers that the phones were breaking. * SO WHAT? * At least Samsung discovered the

phone’s shortcomings early. They must be uber-twitchy given that whole Galaxy Note 7 debacle a few years back where devices ignited so frequently that they were banned from many commercial flights! This isn’t going to do sales a whole lot of good given the bad PR, but then again given that the Fold was priced at nigh on $2,000, they weren’t going to be all that strong anyway. Once it irons out the problems, I would have thought that it will still have the “halo-effect” on other more affordable phones in its lineup as its notoriety will no doubt continue to attract curious customers to have a look when they are in mobile phone shops.

Top brands increase their use of video-sharing app for marketing (Daily Telegraph, Matthew Field) is an interesting article because it shows that there’s a cool new kid on the block when it comes to advertising as the video-sharing app TikTok (developed by Chinese tech giant Bytedance) is gaining in popularity among major companies wanting to reach its young audience. Digital agency Social Chain estimates that a TikTok influencer with between 1m-2.5m followers could make £500-800 for their posts – something that would cost advertisers £8-10,000 on Instagram. Given that TikTok was the most downloaded app on Apple’s App store last year with over one billion downloads worldwide, you can see the attraction for companies like Sony, Fifa, Calvin Klein, Huawei and Coca Cola as they try to get more bang from their advertising buck. * SO WHAT? * This sounds great, but TikTok is currently facing a few issues to do with what it’s doing with data from its core demographic (under-18s), some of its shadier content and relations with influencers. Still, that’s not a problem for the advertisers who will no doubt continue to use the platform!

Tesla promises robo-taxis on the one hand and is investigating fire hazards on the other while Kraft Heinz gets a new CEO…

Tesla’s Elon Musk promises robot taxis by New Year (Wall Street Journal, Tim Higgins) makes for a very exciting-sounding headline as Elon Musk said yesterday that by the middle of 2020, over a million Tesla vehicles on the road will be able to operate without a human driver. He went on to say that Tesla vehicle owners could use a smartphone app to put their vehicles into commercial service and pick up passengers on the company’s network. Tesla would then get 25-30% commission of the fare. Wild, right? The presentation was made ahead of the company’s unveiling of its first quarter results tomorrow. Having said that, Tesla investigates video of Model S car exploding (The Guardian) would suggest that Musk has other more pressing matters to attend to as a team from the company is looking into a video that was shared on Chinese Twitter-like Weibo on Sunday evening which showed a parked Tesla Model S exploding. The company said in a statement that “We immediately sent a team onsite and we’re supporting local authorities to establish the facts. From what we know, no one was harmed”. There have been at least 14 instances of Tesla cars combusting since 2013,

although most of them have occurred after a crash. * SO WHAT? * Musk’s vision has to be admired, but I just don’t think self-driving taxis are ready at the moment. I like the idea that you can farm out your car to earn some money while you are not sat in it but a) I’m not sure how comfortable people would be to jump into a driverless taxi at the moment and b) I don’t really think that local authorities will be falling over themselves to be an “early adopter” in a technology that is still flawed. I think that the combustion thing could be serious but I have no doubt that Tesla will do its utmost to brush this under the carpet and say that it’s just a blip.

Kraft Heinz brings in new chief executive after share price slump (The Guardian, Simon Goodley) heralds a new dawn for the company behind ketchup and Amoy ready meals as it announced the hiring of Anheuser-Busch InBev veteran Miguel Patricio to take over from current chief Bernardo Hees. The company’s share price has been taking a hammering due to its allegedly questionable accounting practices and so something had to give – and that thing was the chief exec. Patricio said that he wanted to take the company in a new direction after a long period of cost-cutting. * SO WHAT? * God knows what the new guy will do, but he will no doubt benefit from having zero baggage on the accounting scandal and the fact that he is coming after the company has cut costs to the bone and seen a 40% share price drop over the last year. Surely he’s got to do something truly hideous to muck this up and not look like a messiah! One to watch…

And finally, in other news…

I thought I’d sign off today with an epic selfie I saw over the weekend in Gorillas appear to pose for selfie with park ranger in the Democratic Republic of Congo (Sky News, https://tinyurl.com/y3wtmsal). Love it!