Monthly Archive: March 2017

Cellnet Review

Samsung could have its own Apple Park with $5 billion. Instead it has the ashes of Galaxy Note 7

 

By Daniel Eran Dilger
Friday, March 31, 2017, 03:47 pm PT (06:47 pm ET)[1]

There are a lot of ways to blow through $5,000,000,000. Apple supposedly spent that much building its new Apple Park campus, while Samsung says it figuratively (and literally) will burn through that much capital in the aftermath of rushing its flawed Galaxy Note 7 to market and then pulling it off shelves in one of the worst operational catastrophes in the history of the smartphone industry.

Apple Park

A very worrysome expenditure Apple may not be able to afford

Apple Park & the insatiable siren song of harping on Apple

The iconic new Apple Park complex, introduced as “Campus 2” by Steve Jobs in 2011, was originally slated to open in 2015. It’s now preparing for initial employee occupation in April, just days from now.

Halfway through the project, in 2013, Bloomberg reported[2] that delays had pushed the overall price of the project to (ostensibly) $5 billion, blaming various details including its expansive use of curved glass[3] as a hallmark of its architectural design.

At the time, Peter Burrows wondered out loud to his Bloomberg audience whether critics–particularly Apple’s investors–would ask whether “curved glass is the best use of funds,” as if Apple were down to its last few dimes and was vexed with a fish or cut bait problem, or perhaps it was nearing the point where it would need to gnaw on its left hand to sustain itself.

Rather than expensive high tech glass, Apple could have used adobe, or erected a cost effective tent[4]

Dire handwringing about the guestimated expense of Apple’s new campus became a common theme for pundits, who frequently waxed lyrical about the prospect of Apple–in its vain hubris–overbuilding a grand facility that it subsequently couldn’t afford to maintain in its doomed future, just like so many big old corporate dinosaurs before it–none of whom ever sat on $230 billion[5].

A year ago, Larry Light wrote[6] for CBS Moneywatch of the “curse of the edifice complex,” citing skyscrapers built by companies that presaged a major economic decline.

Light specifically cited IBM’s 41 story Manhattan skyscraper built in 1983 and Chicago’s massive 108 story Sears Tower built in 1973, while also providing a counter example of IAC/InteractiveCorp, which “opened its gorgeous Frank Gehry-designed building in New York in 2007, right before the Great Recession,” although “IAC shareholders have done very well over past years.”

Of course, Sears also did well for decades before retail shifted online and the century-old catalog giant began to fail. It only relinquished control over what is now the Willis Tower in 2009, 36 years after it was built. The people most concerned with how Apple is spending its money don’t seem to even know how it’s spending its money

IBM, despite being described by Light as having “retreated from computer making and shrank as a presence in the tech world,” has actually grown dramatically since it built its “edifice.” After ten years of stock price declines in the 80s that halved the value of its shares by 1994, IBM has since appreciated by 1088 percent. Neither trajectory seemed to be related to owning fancy offices.

And despite foisting its “computer making” upon China’s Lenovo (which has not done particularly well as a PC maker since, and is worth a third of IBM), Big Blue is one of the largest global technology firms in the world–and a major partner of Apple in building new mobile workflows for clients including JAL[7] and Banco Santander[8].

The people most concerned with how Apple is spending its money don’t seem to even know how it’s spending its money.

Other Apple Parks around the world

With all of the feeble attempts to link Apple Park construction with certain doom in an embittered sort of schadenfreudewunsch, it’s easy to forget that Apple has also begun building a third very large Sunnyvale campus[9] (with far less attention), has nearly completed a massive 1 million square foot Americas Operation Center in Austin, Texas[10] (below) and is operating a San Jose, California chip fab[11] for some unknown, very secretive functions, flanked by nearby development sites capable of hosting a fourth major Apple campus in the Bay Area around 101 Tech[12], directly north of the San Jose airport, where Apple could build another 4 million square feet of office space[13].

Americas Operation Center in Austin, Texas

Those solar panels are so expensive Apple had to float Green Bonds[14] to afford them

Apple has also leased a million square feet of office space in the Broadway Trade Center in Los Angeles, California[15] and operates what is believed to be a GPU Design Center in Melbourne, Florida[16] near Orlando, as well as having built out a 1.3 million square foot iCloud data center global command facility in Mesa, Arizona[17].

If we are keeping track of expenses to determine if Apple can afford this stuff, keep in mind that the Mesa facility cost around $2 billion and directs the activities of four multi-billion dollar U.S. iCloud data centers in Maiden, North Carolina; Reno, Nevada; Prineville, Oregon and Newark, California.

Don’t worry too much; the Services businesses those iCloud facilities support (including Apple Music and the App Store) helped bring in $7.2 billion in high-margin revenues just in the last three months of 2016.

In addition, Apple has opened new software development centers in Brazil, Italy and India; and built out multiple other research centers including the Zhongguancun Science Park in Beijing, China[18]; a technology development center in Hyderabad, India[19]; three silicon-related research and development sites in Herzlia, Ra’anana and Hafia, Israel[20]; a health and materials-related research facility at the Tsunashima Technical Development Center in Yokohama, Japan[21]; a top secret production lab in Longtan, Taiwan[22]; a Siri voice research lab in Cambridge, England[23]; an apparent automotive research site at Kanata Research Park in Ottawa, Canada[24] and a camera optics research facility in Grenoble, France[25]. It also has started work on a new research and development center in Shenzhen, China[26].

That “$5 billion” Apple Park though!

In all, Apple is now spending around $13 billion per year on capital expenditures, which includes spending on its own facilities and the installation of specialized equipment in the factories of its suppliers.

In fact, the largest driver of Apple’s capex is product tooling and manufacturing process equipment, investments made to ensure the delivery of a massive supply of future products. About a quarter of the total is devoted to expanding iCloud data center capacity driving Services growth.

Apple isn’t spending that much money on edifice erection. It’s spending most of its money on production capacity so that it can build enough products to meet demand. That’s currently one of Apple’s largest issues, which is why it can’t make AirPods–and its most expensive iPhone 7 Plus models–fast enough.

Now, Samsung

Samsung also spends billions on capex, most of which (90 percent, according to the company[27]) is devoted to component research. Of the $22.5 billion Samsung invested last year, about $8.8 billion went into its display panel unit, and $11.8 billion went into its semiconductor group (mostly into memory).

Samsung brought in operating profits of nearly $26.2 billion last year, $9.7 billion of which came from Samsung Mobile, making phones, tablets and PCs in a business unit comparable to Apple–which, incidentally, reported operating profits of $60 billion in fiscal 2016. Apple pays more taxes than Samsung, but its pre-tax profits from phones and other computers are over six times that of Samsung.

While Samsung is investing tens of billions of dollars into developing memory and displays, it’s making most of its money (about two-thirds) selling those components to others, rather than selling finished goods like smartphones (or washing machines). So it’s a real problem when those other things start exploding into flames that burn the company’s reputation among consumers.

What’s $5 billion to a big company like Samsung?

Losing $5 billion on the Galaxy Note 7 bonfire (that’s Samsung’s own estimate[28]) has been happy-faced by a variety of industry flacks tasked with blacking the red and upping the down.

“Samsung has emerged from the ashes of the Galaxy Note 7 debacle in pretty good shape,” cheered Sherisse Pham in a rosy article[29] for CNN, in one example.

But imagine if Samsung had instead built its own Apple Park, then obliterated it in a thermonuclear accident caused by negligence. Would that have qualified as an “edifice complex,” and would Bloomberg have wondered aloud if investors considered such a disaster a “the best use of funds”?

Research by Fluent was repeated by many blogs to suggest that the damage caused by Samsung’s Galaxy Note 7 wouldn’t have much impact, noting the finding[30] that “63% of Samsung phone owners said that the Note 7 recall had no impact on their likelihood to purchase a Samsung phone in the future.”

Jacob Siegel, writing for BGR, suggested “the company might not have much to worry about,” under the headline “Samsungs Note 7 disaster wont stop people buying the Galaxy S8,” as if the situation were binary.

Only a third of Samsung’s best customers are really concerned and just 14 percent think the Galaxy S8 may also be dangerous

The way numbers actually work means that Fluent’s data indicates that 37 percent said it would have an impact on their buying decisions. And 14 percent specifically “said they have safety concerns about the Samsung Galaxy S8,” despite being an unrelated design. That’s not good.

Samsung’s “recovered” smartphone sales last year were still down 25 percent from 2014, the year Samsung’s growth got kneecapped by iPhone 6. Even a few percentage points of lost sales due to Note 7 fires–and the way Samsung handled them–would shave off premium phone volumes that contribute much of Samsung Mobile’s profits.

The Fluent report also noted that “only 58 percent of Samsung owners say they are likely to purchase another Samsung as their next phone,” contrasting with 89 percent of iPhone owners who said they plan to buy another iPhone.

Good thing Apple is massively investing in iPhone production capacity.

References

  1. ^ Daniel Eran Dilger (twitter.com)
  2. ^ reported (appleinsider.com)
  3. ^ expansive use of curved glass (appleinsider.com)
  4. ^ cost effective tent (appleinsider.com)
  5. ^ $230 billion (appleinsider.com)
  6. ^ wrote (www.cbsnews.com)
  7. ^ JAL (appleinsider.com)
  8. ^ Banco Santander (appleinsider.com)
  9. ^ Sunnyvale campus (appleinsider.com)
  10. ^ Americas Operation Center in Austin, Texas (appleinsider.com)
  11. ^ San Jose, California chip fab (appleinsider.com)
  12. ^ 101 Tech (appleinsider.com)
  13. ^ 4 million square feet of office space (appleinsider.com)
  14. ^ Green Bonds (appleinsider.com)
  15. ^ Broadway Trade Center in Los Angeles, California (appleinsider.com)
  16. ^ GPU Design Center in Melbourne, Florida (appleinsider.com)
  17. ^ global command facility in Mesa, Arizona (appleinsider.com)
  18. ^ Zhongguancun Science Park in Beijing, China (appleinsider.com)
  19. ^ Hyderabad, India (appleinsider.com)
  20. ^ Herzlia, Ra’anana and Hafia, Israel (appleinsider.com)
  21. ^ Tsunashima Technical Development Center in Yokohama, Japan (appleinsider.com)
  22. ^ Longtan, Taiwan (appleinsider.com)
  23. ^ Cambridge, England (appleinsider.com)
  24. ^ Kanata Research Park in Ottawa, Canada (appleinsider.com)
  25. ^ Grenoble, France (appleinsider.com)
  26. ^ research and development center in Shenzhen, China (appleinsider.com)
  27. ^ according to the company (news.samsung.com)
  28. ^ own estimate (appleinsider.com)
  29. ^ rosy article (money.cnn.com)
  30. ^ finding (www.fluentco.com)
Cellnet Review

Samsung could have its own Apple Park with $5 billion, but has the ashes of Galaxy Note 7 instead

 

By Daniel Eran Dilger
Friday, March 31, 2017, 03:47 pm PT (06:47 pm ET)[1]

There are a lot of ways to blow through $5,000,000,000. Apple supposedly spent that much building its new Apple Park campus, while Samsung says it figuratively (and literally) will burn through that much capital in the aftermath of rushing its flawed Galaxy Note 7 to market and then pulling it off shelves in one of the worst operational catastrophes in the history of the smartphone industry.

Apple Park

A very worrysome expenditure Apple may not be able to afford

Apple Park & the insatiable siren song of harping on Apple

The iconic new Apple Park complex, introduced as “Campus 2” by Steve Jobs in 2011, was originally slated to open in 2015. It’s now preparing for initial employee occupation in April, just days from now.

Halfway through the project, in 2013, Bloomberg reported[2] that delays had pushed the overall price of the project to (ostensibly) $5 billion, blaming various details including its expansive use of curved glass[3] as a hallmark of its architectural design.

At the time, Peter Burrows wondered out loud to his Bloomberg audience whether critics–particularly Apple’s investors–would ask whether “curved glass is the best use of funds,” as if Apple were down to its last few dimes and was vexed with a fish or cut bait problem, or perhaps it was nearing the point where it would need to gnaw on its left hand to sustain itself.

Rather than expensive high tech glass, Apple could have used adobe, or erected a cost effective tent[4]

Dire handwringing about the guestimated expense of Apple’s new campus became a common theme for pundits, who frequently waxed lyrical about the prospect of Apple–in its vain hubris–overbuilding a grand facility that it subsequently couldn’t afford to maintain in its doomed future, just like so many big old corporate dinosaurs before it–none of whom ever sat on $230 billion[5].

A year ago, Larry Light wrote[6] for CBS Moneywatch of the “curse of the edifice complex,” citing skyscrapers built by companies that presaged a major economic decline.

Light specifically cited IBM’s 41 story Manhattan skyscraper built in 1983 and Chicago’s massive 108 story Sears Tower built in 1973, while also providing a counter example of IAC/InteractiveCorp, which “opened its gorgeous Frank Gehry-designed building in New York in 2007, right before the Great Recession,” although “IAC shareholders have done very well over past years.”

Of course, Sears also did well for decades before retail shifted online and the century-old catalog giant began to fail. It only relinquished control over what is now the Willis Tower in 2009, 36 years after it was built. The people most concerned with how Apple is spending its money don’t seem to even know how it’s spending its money

IBM, despite being described by Light as having “retreated from computer making and shrank as a presence in the tech world,” has actually grown dramatically since it built its “edifice.” After ten years of stock price declines in the 80s that halved the value of its shares by 1994, IBM has since appreciated by 1088 percent. Neither trajectory seemed to be related to owning fancy offices.

And despite foisting its “computer making” upon China’s Lenovo (which has not done particularly well as a PC maker since, and is worth a third of IBM), Big Blue is one of the largest global technology firms in the world–and a major partner of Apple in building new mobile workflows for clients including JAL[7] and Banco Santander[8].

The people most concerned with how Apple is spending its money don’t seem to even know how it’s spending its money.

Other Apple Parks around the world

With all of the feeble attempts to link Apple Park construction with certain doom in an embittered sort of schadenfreudewunsch, it’s easy to forget that Apple has also begun building a third very large Sunnyvale campus[9] (with far less attention), has nearly completed a massive 1 million square foot Americas Operation Center in Austin, Texas[10] (below) and is operating a San Jose, California chip fab[11] for some unknown, very secretive functions, flanked by nearby development sites capable of hosting a fourth major Apple campus in the Bay Area around 101 Tech[12], directly north of the San Jose airport, where Apple could build another 4 million square feet of office space[13].

Americas Operation Center in Austin, Texas

Those solar panels are so expensive Apple had to float Green Bonds[14] to afford them

Apple has also leased a million square feet of office space in the Broadway Trade Center in Los Angeles, California[15] and operates what is believed to be a GPU Design Center in Melbourne, Florida[16] near Orlando, as well as having built out a 1.3 million square foot iCloud data center global command facility in Mesa, Arizona[17].

If we are keeping track of expenses to determine if Apple can afford this stuff, keep in mind that the Mesa facility cost around $2 billion and directs the activities of four multi-billion dollar U.S. iCloud data centers in Maiden, North Carolina; Reno, Nevada; Prineville, Oregon and Newark, California.

Don’t worry too much; the Services businesses those iCloud facilities support (including Apple Music and the App Store) helped bring in $7.2 billion in high-margin revenues just in the last three months of 2016.

In addition, Apple has opened new software development centers in Brazil, Italy and India; and built out multiple other research centers including the Zhongguancun Science Park in Beijing, China[18]; a technology development center in Hyderabad, India[19]; three silicon-related research and development sites in Herzlia, Ra’anana and Hafia, Israel[20]; a health and materials-related research facility at the Tsunashima Technical Development Center in Yokohama, Japan[21]; a top secret production lab in Longtan, Taiwan[22]; a Siri voice research lab in Cambridge, England[23]; an apparent automotive research site at Kanata Research Park in Ottawa, Canada[24] and a camera optics research facility in Grenoble, France[25]. It also has started work on a new research and development center in Shenzhen, China[26].

That “$5 billion” Apple Park though!

In all, Apple is now spending around $13 billion per year on capital expenditures, which includes spending on its own facilities and the installation of specialized equipment in the factories of its suppliers.

In fact, the largest driver of Apple’s capex is product tooling and manufacturing process equipment, investments made to ensure the delivery of a massive supply of future products. About a quarter of the total is devoted to expanding iCloud data center capacity driving Services growth.

Apple isn’t spending that much money on edifice erection. It’s spending most of its money on production capacity so that it can build enough products to meet demand. That’s currently one of Apple’s largest issues, which is why it can’t make AirPods–and its most expensive iPhone 7 Plus models–fast enough.

Now, Samsung

Samsung also spends billions on capex, most of which (90 percent, according to the company[27]) is devoted to component research. Of the $22.5 billion Samsung invested last year, about $8.8 billion went into its display panel unit, and $11.8 billion went into its semiconductor group (mostly into memory).

Samsung brought in operating profits of nearly $26.2 billion last year, $9.7 billion of which came from Samsung Mobile, making phones, tablets and PCs in a business unit comparable to Apple–which, incidentally, reported operating profits of $60 billion in fiscal 2016. Apple pays more taxes than Samsung, but its pre-tax profits from phones and other computers are over six times that of Samsung.

While Samsung is investing tens of billions of dollars into developing memory and displays, it’s making most of its money (about two-thirds) selling those components to others, rather than selling finished goods like smartphones (or washing machines). So it’s a real problem when those other things start exploding into flames that burn the company’s reputation among consumers.

What’s $5 billion to a big company like Samsung?

Losing $5 billion on the Galaxy Note 7 bonfire (that’s Samsung’s own estimate[28]) has been happy-faced by a variety of industry flacks tasked with blacking the red and upping the down.

“Samsung has emerged from the ashes of the Galaxy Note 7 debacle in pretty good shape,” cheered Sherisse Pham in a rosy article[29] for CNN, in one example.

But imagine if Samsung had instead built its own Apple Park, then obliterated it in a thermonuclear accident caused by negligence. Would that have qualified as an “edifice complex,” and would Bloomberg have wondered aloud if investors considered such a disaster a “the best use of funds”?

Research by Fluent was repeated by many blogs to suggest that the damage caused by Samsung’s Galaxy Note 7 wouldn’t have much impact, noting the finding[30] that “63% of Samsung phone owners said that the Note 7 recall had no impact on their likelihood to purchase a Samsung phone in the future.”

Jacob Siegel, writing for BGR, suggested “the company might not have much to worry about,” under the headline “Samsungs Note 7 disaster wont stop people buying the Galaxy S8,” as if the situation were binary.

Only a third of Samsung’s best customers are really concerned and just 14 percent think the Galaxy S8 may also be dangerous

The way numbers actually work means that Fluent’s data indicates that 37 percent said it would have an impact on their buying decisions. And 14 percent specifically “said they have safety concerns about the Samsung Galaxy S8,” despite being an unrelated design. That’s not good.

Samsung’s “recovered” smartphone sales last year were still down 25 percent from 2014, the year Samsung’s growth got kneecapped by iPhone 6. Even a few percentage points of lost sales due to Note 7 fires–and the way Samsung handled them–would shave off premium phone volumes that contribute much of Samsung Mobile’s profits.

The Fluent report also noted that “only 58 percent of Samsung owners say they are likely to purchase another Samsung as their next phone,” contrasting with 89 percent of iPhone owners who said they plan to buy another iPhone.

Good thing Apple is massively investing in iPhone production capacity.

References

  1. ^ Daniel Eran Dilger (twitter.com)
  2. ^ reported (appleinsider.com)
  3. ^ expansive use of curved glass (appleinsider.com)
  4. ^ cost effective tent (appleinsider.com)
  5. ^ $230 billion (appleinsider.com)
  6. ^ wrote (www.cbsnews.com)
  7. ^ JAL (appleinsider.com)
  8. ^ Banco Santander (appleinsider.com)
  9. ^ Sunnyvale campus (appleinsider.com)
  10. ^ Americas Operation Center in Austin, Texas (appleinsider.com)
  11. ^ San Jose, California chip fab (appleinsider.com)
  12. ^ 101 Tech (appleinsider.com)
  13. ^ 4 million square feet of office space (appleinsider.com)
  14. ^ Green Bonds (appleinsider.com)
  15. ^ Broadway Trade Center in Los Angeles, California (appleinsider.com)
  16. ^ GPU Design Center in Melbourne, Florida (appleinsider.com)
  17. ^ global command facility in Mesa, Arizona (appleinsider.com)
  18. ^ Zhongguancun Science Park in Beijing, China (appleinsider.com)
  19. ^ Hyderabad, India (appleinsider.com)
  20. ^ Herzlia, Ra’anana and Hafia, Israel (appleinsider.com)
  21. ^ Tsunashima Technical Development Center in Yokohama, Japan (appleinsider.com)
  22. ^ Longtan, Taiwan (appleinsider.com)
  23. ^ Cambridge, England (appleinsider.com)
  24. ^ Kanata Research Park in Ottawa, Canada (appleinsider.com)
  25. ^ Grenoble, France (appleinsider.com)
  26. ^ research and development center in Shenzhen, China (appleinsider.com)
  27. ^ according to the company (news.samsung.com)
  28. ^ own estimate (appleinsider.com)
  29. ^ rosy article (money.cnn.com)
  30. ^ finding (www.fluentco.com)
Cellnet Review

Apple victorious over banks in Australia

Top of the Order:  

Apple 1: Australia: 0: Apple has a history of setting the standards that other tech companies’ products have to meet. It’s happened with the Mac, the iPod, the iPhone and the iPad. Once those products hit the market, everyone else had to play catch up.

Now, thanks to a legal decision in Australia, it could be about to set a regulatory precedent that reverberates around the world.

The Australian Competition and Consumer Commission (ACCC) — the governmental body that regulates business competition Down Under — ruled Friday that four Aussie banks can’t collectively negotiate with Apple to get access to Apple Pay mobile payment technology for use with their own mobile-banking apps. The banks had hoped that by being able to negotiate together, they would have been able to avoid paying fees to Apple, which gets a piece of the action every time a transaction is processed via Apple Pay.

The four banks — Commonwealth Bank, Westpac, National Australia Bank and Bendigo & Adelaide Bank — have so far not linked their customers’ credit cards with Apple Pay because they haven’t agreed to Apple’s terms of use for the technology.

According to the BBC[1], the Commission ruled that letting the banks negotiate terms as a group would have ended up hurting competition as that would have forced Apple to act more like Google, which allows so-called “contactless payments” from apps within the Android operating system. The Commission said it wouldn’t be right to force Apple to adopt the same payment system strategy of one of its competitors.

Middle Innings:

Live From Los Gatos!: I think it’s safe to say that Netflix has a sense of humor. For instance, this is a company that has bet big on stand-up comedy. You can’t hardly go a week without a new Netflix stand-up special making its debut. Some are good (the new Jo Koy special), and some miss the mark (sorry, but that Amy Schumer show she recorded in Denver really didn’t demonstrate her bringing her “A” game).

And if you want further proof of Netflix’s love of comedy, keep in mind that the company has paid a reported $60 million for three Dave Chappelle specials, two of which were recorded separately in 2015 and 2016 and were just hanging around “in the can,” so to speak.

But what Netflix put up on Friday puts the video-streaming company into a new arena when it comes to getting laughs out of life, and the most mundane parts of it, at that.

If you went to your Netflix page, chances are you saw a promo for something called “Netflix Live”. Well, nothing on Netflix is really “live,” so curiosity took over when I clicked on the screen.

[embedded content]

It was actor Will Arnett, in a jacket and tie, looking a little haggard while narrating “live” video segments of some of the most-thrilling action ever streamed over the internet. Activities such as grass growing, a burrito cooking in a microwave, the inside of refrigerator, and Adam Sandler thumbwrestling with a woman.

Of course, it was all part of an early April Fools Day prank on the part of Netflix. It probably wasn’t difficult to get Arnett to take part in the gag. After all, he provides the voice of the lead character in the Netflix animated series “Bojack Horseman” and is also the star of the Netflix original series “Flaked.”

In any case, “Netflix Live” is supposedly available until April 1. It’s 48 minutes long and the commentary Arnett gives about a person doing the worst parallel parking job in history is alone worth watching the show.

Meet The New Boss: It’s been about a year and a half since John Donahoe stepped down as chief executive at eBay. During that time, Donahoe spent a year avoiding any business meetings, and also took some time to follow around musician Van Morrison for a series of concerts.

But, when the good folks at Santa Clara-based ServiceNow approached him about becoming the company’s CEO, Donahoe said the “purpose-driven” nature of ServiceNow was something he couldn’t pass up[2]. Donahoe officially starts his new job Monday.

Bottom of the Lineup:

Here’s a look at how some leading Silicon Valley stocks did Friday…

Movin’ on Up: Gains came from Ultra Clean Holdings, Sigma Designs, Advanced Micro Devices, RingCentral and Rocket Fuel.

In the Red: Decliners included Glu Mobile, Quotient Technology, Oclaro, Finisar and VeriFone Systems.

The tech-focused Nasdaq Composite Index slipped by 2.6 points to 5,911.74.

The blue chip Dow Jones Industrial Average gave up 0.3 percent to end the week at 20,663.22.

And the broad-based Standard & Poor’s 500 Index shed 0.2 percent to finish Friday at 2,362.72.

Quote of the Day: “The money involved … has just ballooned and become so much more concrete and attainable.” — Bryant Walker Smith, a scholar with Stanford Law School who was speaking about the nature of the growing self-driving car technology.

Sign up for the 60-Second Business Break newsletter at www.siliconvalley.com[3].

References

  1. ^ According to the BBC (www.bbc.com)
  2. ^ was something he couldn’t pass up (www.mercurynews.com)
  3. ^ www.siliconvalley.com (www.siliconvalley.com)

S8 Displays Smartphone’s Scale

Samsung and Huawei provided a glimpse of the microns to megabucks complexity of mobile design today with their latest smartphone news.

Samsung provided its first description of the Galaxy S8[1] this week and made some handsets available to reviewers. Also this week, Huawei took a hit in its efforts to break into the Samsung-Apple handset wars, showing again just how rich and complex this game has become.

Huawei is reeling as a new tier of competitors in China surge with money and access to one of the last big growth markets in smartphones. Google also has thrown its hat into the ring[2], hiring Amazon’s Mr. Gadget to head its efforts.

Before I venture into the financial aspects of the business, let’s dip into what we have learned about the technology inside the S8.

For me the big lesson of the S8 is how premium smartphones are woven from an interlocking fabric of dozens if not hundreds of design teams. A couple wrinkles can make or lose a fortune for the handful of companies rich enough to try building them—making it all the more amazing that a few new players are emerging.

Samsung’s prowess in 10nm microprocessors and finely crafted mobile displays are unfortunately table stakes for the S8. These days it’s as much about creative new features and services the components enable. Here it seems Samsung still needs to define and execute a consumer strategy starting with handsets but spreading out through its popular TVs and other smart home goods.

Next page: What we know about chips and displays

Samsung's S8 Web site shows a teaser picture of the handset's insides but not a full reveal. (Images: Samsung)

Samsung’s S8 Web site shows a teaser picture of the handset’s insides but not a full reveal. (Images: Samsung)

References

  1. ^ its first description of the Galaxy S8 (www.samsung.com)
  2. ^ thrown its hat into the ring (www.eetimes.com)