Technology

SAP margin crunch comes with a silver lining

18 October 2018

The 120 bln euro software group’s results disappointed, with its operating margin declining. Yet that’s because its cloud computing unit is outgrowing the older, more profitable business. If that continues it will mean more stable revenues, faster growth, and a higher valuation.

TSMC can withstand a worsening trade storm

18 October 2018

The $200 bln Taiwanese chipmaker’s quarterly profit only dipped 1 pct in a tough market. U.S.-China tensions loom, but next-generation semiconductors are helping cushion the blow. Unlike fellow Apple supplier Foxconn, TSMC is also less vulnerable to customers moving production.

Finance makes Apple and Google forced friends

17 October 2018

Steve Jobs once wanted to destroy Google for copying the iPhone. The company he founded is now dependent on the search engine and its parent Alphabet for around 10 pct of its profit. The growth of mobile search and the market for secondhand phones will bind the two even tighter.

ASOS’ fast-fashion surge lacks high-end profit

17 October 2018

The internet retailer’s shares rose 12 pct after it beat forecasts, and touted its “huge” potential. But more profitable own brands made up a smaller proportion of its sales, and new ranges such as a gender-fluid style are cheaper. Competition in online retail is huge too.

Netflix is online video’s Walmart, and its Tiffany

16 October 2018

CEO Reed Hastings has created a firm that has both the scale of the giant retailer and the pricing power of the luxury jeweler. That’s rare. The trick will be ensuring his $145 bln outfit, which added more subscribers than expected last quarter, can maintain both labels.

$34 bln U.S. defense deal covers all bases but two

15 October 2018

The planned combination of Harris and L3 is a real merger of more-or-less equals with little overlap and CEO succession set in advance. The U.S. government even comes off better. Yet for most stakeholders to win, someone must lose. In this case, it’s suppliers and employees.

Riyadh is clouding Masayoshi Son’s $100 bln vision

15 October 2018

Fallout from the disappearance of a prominent Saudi journalist has hit SoftBank, whose mega fund is backed by the Kingdom. Shareholders are rattled: entrepreneurs will probably be wary of accepting fresh investments. Raising more money now looks far more challenging too.

Saudi adviser panel may unwind faster than Trump’s

11 October 2018

A forum of foreign executives has seen departures amid rising political tensions, as a U.S. White House CEO council did last year. Cozying up to princes and presidents confers an air of virtue and status. When it looks like advice isn’t being heeded, it goes quickly into reverse.

Tesla can find a better chair than James Murdoch

11 October 2018

The media executive is in line to lead the board, the FT says. He’d be a better pick than any of the $45 bln electric-car maker’s other directors. But Elon Musk’s tweet denying the story is a reminder that Tesla and its investors need a strong outsider to oversee the CEO.

Tencent’s $230 bln selloff is a double pain

11 October 2018

A tech rout has hit the Chinese giant harder than U.S.-listed rivals like Alibaba. Tencent's loss is increased by its exposure to fickle mainland punters and a large emerging market weighting. But boss Pony Ma’s top problem is a regulatory crackdown undermining the core business.

U.S. deal review could be new stick to beat China

10 October 2018

Minority stakes in U.S. tech firms will be under tougher scrutiny starting next month. That’s reasonable, and the Treasury, which will oversee reviews, has a rational approach. The risk is that hardliners co-opt the process to hurt Beijing once tariffs reach their limit.

Amazon gender-diversity fail shows limits of tech

10 October 2018

The $900 bln e-commerce giant scrapped a résumé-reviewing computer program after discovering it was prejudiced against women. Algorithms and machine learning hold promise, but are limited by programmers’ own biases. Weeding out such regressive traits requires human intervention.

SoftBank in danger of over-WeWorking itself

10 October 2018

The Japanese group may invest up to $20 bln for a majority stake in the office-sharing outfit. That suggests it could wind up as roughly a fifth of SoftBank's Vision Fund. That would be a dangerous amount of concentration risk, especially given WeWork’s unproven business model.

Google inadvertently makes case for data crackdown

9 October 2018

The search giant kept secret a security hole to avoid regulators’ scrutiny, the Wall Street Journal says. The lack of transparency underlines that such disclosures should be out of managers’ hands. U.S. lawmakers eyeing a law similar to Europe’s GDPR have an extra argument.

Electric-car crash gives Evergrande a tech lesson

8 October 2018

Jia Yueting’s Tesla wannabe wants to scrap a $2 bln rescue agreed with a unit of the Chinese property giant. In June, the deal sent Evergrande Health stock soaring. Much of that gain is now lost. Investors are left with few reasons to trust future efforts to swerve into new lanes.

Sizing up Chinese tech political risk is perilous

5 October 2018

Shares in computer maker Lenovo plunged 22 pct Friday after a news report alleged Beijing agents inserted spy chips into other companies‘ motherboards. Peers fell too. Fear of China’s role in globally integrated I.T. supply chains is growing but the fallout is hard to price.

KKR takes sides in Southeast Asia’s tech battle

5 October 2018

The buyout firm is investing in a leading Filipino payments startup, alongside Tencent. The main rival is backed by Alibaba. Chinese giants and SoftBank have been burning cash to win users in a regional war of attrition. KKR may get caught in the crossfire.

Samsung is closer to maxing out memory limits

5 October 2018

South Korea's tech titan expects quarterly operating profit to hit a record $15 bln, thanks to an upswing in chip demand. Memory prices will probably peak by year-end, however. Slower earnings growth, and the mounting legal woes of Samsung's leaders, will test investor patience.

Infected supply chains challenge Big Tech defenses

4 October 2018

Apple and Amazon both denied a report they had installed servers harboring compromised chips. It speaks to a problem with global manufacturing. Ensuring the purity of goods made far from end users is difficult, especially across borders. The alternative is to make less profit.

Toyota and SoftBank press accelerate on AV jargon

4 October 2018

The duo are pairing up to build "Autono-MaaS" vehicles. The $200 bln carmaker gets introduced to Masayoshi Son’s stable of ride-hailing apps and his telco gets a big potential data customer. As wild bets proliferate, for now, this one helps Toyota catch up on the buzz.