Internet disrupting the study of economics, says Powell
The economy may be stronger than we think. Jerome Powell, Chairman of the Federal Reserve Bank, noted in a recent speech that the country’s lackluster GDP and productivity may not be due to a mild economy, but may the result of metrics. GDP, the valuation of goods and services over a period of time, has been missing, for quite a period of time, the value of some of our most important services. The Internet economy leverages a massive amount of resources (network, software, hardware and people) to produce free services such as search, video (YouTube, etc.), social networking, email, maps, Wiki facts, etc. The consumption of those services does not get valued given they are, to some level, free, therefore our GDP measurements are missing a significant amount of production. CNBC
dis-rup-shun: Could it be that the Internet has broken the study of, and measurement of, economies? Our university professors are so busy studying the disruption of traditional industries that they didn’t notice that their’s too, has been disrupted? To be fair, the economic value of free Internet services do get monetized in the form of advertisements and premium services, and those are getting measured. Along those same lines, if more output is being sold for less (or given away for free), then does that suggest that the developed world’s economic productivity, as measured by the market value of produced goods and services, is, by nature, decreasing? If so, then the economic metrics of yesterday simply must be supplemented by alternative metrics to determine if our workers today are producing more output, measured in something other than market prices, to determine if we are heading up, down, or sideways. N.B. If you know an economist, please forward this article and ask for her or his help!
Apple’s key growth driver in 2020 will be $399 iPhone
TF Securities analyst Ming-Chi Kuo reported that a highly affordable iPhone will launch in 2020 for $399. He estimates that 170M to 200M people are still on the iPhone 6 (Apple’s best seller so far) which will not support the latest iOS version (13). CNBC
dis-rup-shun: As stated in this publication and others, a slow down in smartphone sales is a significant problem for today’s leading tech companies, as smartphones are economic drivers of innovation and the cash fueling the world’s largest tech device companies. Would a low cost iPhone be Apple’s key growth driver? How will such a cheap phone impact the sales of thousand dollar iPhone 11s? Perhaps premium phone buyers and budget buyers, who have not upgraded since iPhone 6, are discrete market segments and Apple is essentially doubling or tripling its potential market with this two-tiered approach. Regardless of cannibalism by a lower priced offering, the move is smart as Apple will not force budget customers to turn to the rising wave of high-feature low-cost smartphones made by China’s Huawei, Xiaomi, Lenovo, ZTE and others.
New Zealand firm catalogs and tracks space debris
Debris the size of an M&M floating in space could destroy a multi-million dollar satellite. There are over 12,000 small objects orbiting the Earth and every month, more satellites and devices are being launched by governments and companies. Leo Labs is a company that tracks and follows space objects. The company has just activated a massive phased array radar in New Zealand which can quickly scan space and rapidly track objects. TechCrunch
dis-rup-shun: Leo Labs has tapped into a strong growth business, with customers who have already invested millions or more in their craft, and who have little choice but to pay for improved tracking. This may be a business like satellite radio that later was determined to never be profitable until Sirius merged with XM Radio. The fixed costs are high and it is hard to know how much customers will pay. One big collision and the guys in New Zealand can say “I told you so, would you like to subscribe?”
Report details Chinese hacking to assist in development of Chinese airliner
The hacker tracking and security company CrowdStrike published a report on Monday that chronicles the amazing stories of organized hacking campaigns backed by the Chinese Ministry of State to obtain intellectual property from global aviation companies. The campaigns were intended to assist China’s Comac state-owned aerospace maker bring the C919 airliner to market. ZDNet
dis-rup-shun: The timing of the report is interesting, given what may have been a breakthrough in strained U.S. – China trade relations only a working day prior. Regardless of any political agenda CrowdStrike may or may not have, the fascinating chronicle of espionage will make a great movie some day.