Year: 2020

Lockheed Martin has announced a major shift in its corporate leadership: CEO Marilyn Hewson, who has been in the role since 2013, will be replaced by board member and American Tower President and CEO James Taiclet. Hewson will become executive chairman of the board, and both shifts will be effective as of June 15.

Hewson’s time as chief executive of the U.S. sense company has been punctuated by some key highlights, including development and delivery of the Lockheed-built Orion spacecraft, which will support NASA’s Artemis program through its missions leading up to and including delivering humans back to the surface of the Moon.

Taiclet, prior to his time at communications infrastructure company American Tower, was president of Honeywell Aerospace Services, as well as VP of Engine Services at United Technologies Corporation.

In other leadership changes at Lockheed, EVP Frank A. St John is elevated to COO, a new role in the company’s executive branch that will oversee all four business area executive Vice Presidents, including Aeronautics, Rotary and Mission Systems, Space and Missiles, and Fire Control.

Alphabet -owned health technology company Verily has launched the COVID-19 screening site that was first misrepresented by President Trump as a broadly focused coronavirus web-based screening and testing utility developed by Google . After a flurry of blog posts by Google and Verily over the weekend, as well as a follow-up press conference by the White House, it became clear that the screening and testing site was a Verily project, limited in scope to California residents, with a specific focus on a couple of counties for now.

That’s what launched on Monday morning (as eventually clarified by the White House) – a site hosted at Verity’s Project Baseline, which until now has acted as a portal connecting potential participants with medical research studies. The California COVID-19 risk screening and testing site provides screening and potential free testing to those who are eligible based on its criteria, which right now includes residents of Santa Clara County and San Mateo County.

In addition to being located in these places, eligible participants must also be 18 or older; a resident of the U.S.; able to speak and read English; and willing to sign a COVID-19 Public Health authorization form, according to the website. This form provides permission to Verity to collect a person’s information to be used for the screening process. Anyone looking to make use of the site must also either create a new Google account or connect their existing account in order to register.

Despite the requirement of a Google account, Verily says on its website FAQ that it “follows federal and state regulations governing the collection and use of an individual’s data,” and stores the information securely in an encrypted format. It does note that Verily staff will have direct information to identifying information about anyone who uses the site, and that information will be shared with health care professionals, lab personnel, and health officials, and that info could potentially be shared with Verily’s data technology provider partners, including Google.

The company specifically says that it will not share any info with any insurance or medical providers without direct consent, and that any information shared through the COVID-19 screening process will not be used for advertising.

What the website actually provides participants is a multi-question survey that determines initial eligibility, followed by a more in-depth questionnaire intended to asses a person’s risk relative to actually having contracted coronavirus, which is then used to determine whether to direct them to a mobile testing site where they’ll receive a nasal swab and, after “a few days” according to Verily, their test results.

Verily said in a blog post over the weekend that it is working with California Governor Gavin Newsom’s office on expanding availability of the tool to additional parts of the Bay Area and the state. The company hasn’t so far mentioned explicitly any plans to expand to other states, and when I posed the question via email I received an auto-response directing me to their blog post citing a high volume of inbound requests.

It’s looking to be another wild week on Wall Street, with index futures showing hefty drops in the 5% range following the Fed’s announcement over the weekend of an interest rate cut and an expansion of quantitative easing.

Around the world, markets in Europe were down heavily as traders surveyed the full scale of the pandemic — the EuroNext 100 is down nearly 9% for the day, while the London-based FTSE 100 is down about 7%. Meanwhile, resiliency remains in Asian markets, as Korea’s KOSPI, Japan’s Nikkei, and Hong Kong’s Hang Seng indices all showed more mild losses for the start of the trading week.

My colleague Alex Wilhelm and I did a survey of some of the big economic changes from coronavirus mid-last week, but I wanted to take a look at how some of the largest tech companies in the U.S. have held up, the so-called FAANG stocks.

First, I’m going to point out that the red ink seems destined to hit them today: all five of them are looking at one of their worst trading days in recent memory according to the futures markets, with Apple currently down about 12% in per-market trading, far in excess of the 5% decline in the U.S. stock futures markets. Netflix, Amazon, Google, and Facebook are also all down, but in the 8-9% range.

Yet, despite what looks like a rough week ahead, these stocks have all shown a pointed resiliency to the economic and health calamity we have witnessed globally over the past few months.

Stock traders are evaluating a number of factors as they account for the massive changes roiling the markets right now. First, with more time on their hands and limited restaurant options (New York City has banned restaurants from serving food to dine-in diners, for instance), we’d expect a jump in some of these stocks as consumers divert their attentions and wallets to online forms of entertainment and online delivery services like Amazon.

On the other hand, with fears over employment and an economic recession looming, will consumers just close up their wallets entirely and not spend much of anything as they attempt to weather the pandemic? In other words, will advertisers massively cut back in the coming weeks, annihilating the business models of Facebook and Google, which are heavily dependent on ads, and even Amazon, which has a robust ads business.

Investors seem to be having mixed feelings on these factors within the context of each of the large tech conglomerates. Despite what must be increased usage, Facebook is performing among the worst of the set, already down nearly 16% since early December, and poised to drop another 10% today according to market futures. That’s particularly startling given the upcoming US. Presidential election, which is expected to drive hundreds of millions of ad dollars to the site in the coming months.

You might think that Amazon is having the time of its life right now, with a near-monopoly on the delivery markets for many major household goods and the cloud computing infrastructure that powers many of the online services consumers are going to jump on to in the coming weeks. Yet, the markets are not overly richly valuing the stock, as its price is roughly equal to its early December value and it’s also about to decline in heavy trading this morning. In the context of a bear market, flat might be the new “outperform,” but it seems to me that I might have expected a bit more optimism for Amazon’s performance.

Apple of all companies has actually performed quite well considering the supply chain disruptions it has experienced in China and Taiwan, as well as its large consumer market for its iPhones and other devices in Greater China. So far, the stock is actually up about 4% since early December, although it is down significantly from its peak in mid-February. However, the company’s announcement that it is shutting down its Apple Store retail locations across the world (minus China) seems to be giving investors the jitters, as it is about to be demolished in early market trading this morning as I mentioned earlier.

Netflix is the performer you thought it would be though. The company is up about 7% since early December, and looks to decline about the same amount this morning, rendering its price roughly even for the period. Like Amazon, this is a flat-is-the-new-outperform, and the company seems to be a likely destination for bored consumers. Given that Netflix has struggled to grow its domestic audience, the upshot of all of these quarantines and school closures is that these policies might just give the company its last best effort to reach U.S. consumers who otherwise will just continue watching cable TV.

Finally, we reach Google, which despite all the controversies this weekend about Sundar Pichai and the U.S. president, has weathered the markets much better than its similarly-ad-supported peer Facebook. The company is so far only down about 6% in the past few months since the outbreak started, and while it is looking at a pretty negative start to the week on the markets, it is still well-ahead of stock indies in terms of performance.

FAANG is doing well. Part of the reason is scale, not just in terms of the domestic market in the U.S., but also globally, which gives these companies some economic cushion. A slow but well-fought return to normality in Asia can help compensate some of the losses being experienced in Europe and the U.S.

Meanwhile, each of these companies has captured a core human need, whether connecting socially with others like Facebook or delivering key goods like Amazon. That combination of scale and essentiality is proving alluring right now to investors, and expect these stocks to continue their slower than market average decline as they work to resist the downfall in the Western economies.

After several weeks worth of leaks, the latest version of Apple/Beat’s Powerbeats arrive this week. One key thing many of the rumors got wrong is the name. There will be no Powerbeats 4 — not for now, at least. Instead, the company’s somewhat confusingly doing away with the number scheme in favor of the simpler “Powerbeats” name.

The name is, in part, to distinguish the bluetooth headphones from the well-regarded Powerbeats Pro. The new models adopt a number of new features from those truly wireless earbuds, while maintaining the familiar tethered design.

No doubt some prefer that design. Frankly, I’m a bigger fan of the Pros, though I can see where the ability to let the headphones dangle around one’s neck while not in use would have its appeal. If that’s not a great selling point, how about the headphones’ stated 15 hours of battery life nine on-board hours? Of course, the Pros get a full 24 when you include the giant case. There’s no case for the Powerbeats, though they’ll give you an hour of playback after about five minutes charging via a Lightning cable.

Not convinced? Well, the new headphones run $149 versus the Pro’s $249. Honestly, that’s probably the biggest argument of all here. $100 is a pretty sizable difference. In the press material, Beats is comparing them to the Pros, rather than Powerbeats 3, given that many of the updates bring them up to speed with the higher end devices, including an upgraded design, new components and updates to the wireless radio.

As with the Pros, I appreciate the fit, thanks in large part to the over-ear hooks. They’re bulkier than AirPods, but they do a much better job of taking some of the weight off the front of your ears. They’re also much better at staying put at the gym. Speaking of, they’re rated IPX4 water resistant.

The button setup is similar to the Pros, though they don’t have the same buttons on either side. The right ear has the volume rocker and large Play button and the left has Power/Sync. I suspect the asymmetry is due to the necessary power button the Pros don’t require became of their charging case. I do prefer the double buttons on the Pros, but that’s a small quibble. I’d also prefer USB-C over lightning, but that’s just how Apple rolls.

The new Powerbeats are a nice upgrade — though probably not enough to justify purchase if you own the previous generation. Also, the Pros have the edge on everything but price (though neither, sadly, have active noise canceling yet). But they’ll be a solid buy at $149, when they hit stores March 18.

A human clinical trial of a potential vaccine for the new coronavirus will begin on Monday, the AP reports. The trial, which will test the effects of an experimental vaccine shot developed by the National Institutes of Health and drugmaker Moderna, won’t make use of either an active or inactive sample of the virus, as is common for vaccines, but will instead use a gene-based method that uses messenger RNA to trigger an immune response in the target individual.

The Wall Street Journal reported on the vaccine being developed by Moderna in February, which is a relatively young company built around this gene-based approached to drug therapy development. At the time, the paper reported that testing was set to begin in April, but it seems like the change in the situation globally between the end of February and today have accelerated the timelines involved. That said, any final validation of a vaccine, even if it proves effective in trials, is at least a year to 18 months out according to public health officials.

This effort by Moderna and NIH is hardly the only attempt at a vaccine in development to address the continued threat posed by COVID-19; many efforts by both public and private sector participants, on both vaccines and cures, are in process. But this one is fast-tracking the human trial aspect of the clinical testing program.

Because its participants aren’t actually receiving the virus through the injection, they’re not at risk for contracting COVID-19 through the testing program. But there are still a lot of unknowns when it comes to injecting any newly-developed drugs, even into otherwise young and healthy volunteer participants like the reported 45 individuals taking part in this program. At this stage, NIH and Moderna will be looking to ensure that the drug being developed doesn’t produce any unwanted or dangerous side effects, after which further tests will be needed to prove efficacy and other elements of safety.

The wheels of the regulatory machine continue to turn, and today Apple, along with two of its wholesale partners, was dealt a major blow in France over antitrust violations, by receiving the biggest-ever fine levelled against a business over anti-competitive practices and “sterilizing the market” for Apple products, specifically as they are sold across a range of Apple Stores, large “big box” retailers and smaller, independent resellers.

Apple, along with its wholesale distribution partners Ingram Micro and Tech Data, have been accused and fined by the French competition authority (Autorité de la Concurrence), over operating a cartel — affecting pricing and who could sell products — for virtually all Apple products including computers and tablets, but not the iPhone (which is often sold via mobile phone distributors and carriers). Apple is being ordered to pay up €1.1 billion ($1.2 billion), while Tech Data was fined €76.1 million and Ingram Micro €62.9 million in the fine. 

Together, the three have achieved the dubious distinction of getting the highest-ever fine for anti-competitive sales tactics.

“During this case, the Authority deciphered the very specific practices that had been implemented by Apple for the distribution of its products in France (excluding Iphones), such as the iPad,” said Isabelle de Silva, President of the French Competition Authority, in a statement. “Given the strong impact of these practices on competition in the distribution of Apple products via Apple premium resellers, the Authority imposes the highest penalty ever pronounced in a case (€1.24 billion). It is also the heaviest sanction pronounced against an economic player, in this case Apple (1.1 billion euros), whose extraordinary dimension has been duly taken into account. Finally, the Authority considered that, in the present case, Apple had committed an abuse of economic dependence on its premium retailers, a practice which the Authority considers to be particularly serious ”.

We have contacted Apple for a response and will update this post as we learn more.

The announcement follows reports last week that the fine was forthcoming, and caps off years of work: investigations into the case started as far back as 2012, in the wake of the collapse of Apple’s biggest seller in France, eBizcuss, in 2011, and a subsequent lawsuit filed by the company accusing Apple of starving it of inventory after its CEO publicly accused the company of unfair price competition. Litigation related to that case ended in 2017.

At issue in the case are the three kinds of resellers that typically distribute Apple-branded technology: large retailers (such as mega-supermarkets and big-box retailers), of which there are about 1,800 in France; smaller resellers that tend to be independent businesses that also provide services alongside sales (these tend not to be the norm in the US but are still common in Europe, albeit less so in countries like the UK); and Apple itself, by way of its Apple Stores online and in shopping areas. Apple issues “authorised” and “premium” badges to its resellers, giving the latter special access to products and services provided they play by more specific rules in how they sell and price items. It’s this latter category that has been at issue in this case. EBizcuss was an example of the latter.

The competition commissioner noted that Apple and its partners violated three specific areas:

— Apple and the two wholesalers agreed not to compete with each other and also to prevent other distributors to compete on price, “thereby sterilizing the wholesale market for Apple products.”

— Secondly, premium distributors were forced to keep prices high to keep them at the same level as those of integrated distributors.

— Third, Apple has “abused the economic dependence” of these premium distributors, by subjecting them to unfair and unfavorable commercial conditions compared to its network of integrated distributors. (These last two points relate specifically to the accusations eBizcuss had lodged against the company.)

The commission notes that Apple’s actions resulted in “supply difficulties, discriminatory treatment, unstable conditions of remuneration for their activity (discounts and in progress),” which in turn had an effect on squeezing their margins.

“The Authority thus noted that, during the launch of new products, the APRs were deprived of stocks so that they could not respond to orders placed with them, while the network of Apple Stores and retailers was regularly supplied. This has resulted in a loss of customers, including regular customers. They have even sometimes been forced, to respond to an order, to source themselves from other distribution channels, for example by ordering themselves directly from an Apple Store as an end customer would have done in order to to supply their customers.”

While Apple may try to appeal the fine, what will be most interesting to see is how and if the actions affect how the company’s products are priced going forward. Apple has long cultivated a premium image with higher prices than many others on comparable consumer electronics. While it has always been essential to the company to have a wide distribution network, that’s clearly had the effect of making it harder for it to control premium pricing, one reason why it has made such a big push to expand its own direct retail operation. The case in France highlights the generational shift that’s been taking place for years, and while it may be a thorn in Apple’s side, I can’t help but wonder if it will simply signal the company moving even more aggressively to continue bringing more of its sales under its own roof.

The European Commission put out a call Friday for startups and small businesses which are developing technologies that could help combat the COVID-19 outbreak to apply for fast-track EU funding.

The push is related to a €164M pot of money that’s being made available for R&D via the European Innovation Council (EIC) — a European Union funding vehicle which supports the commercialization of high risk, high impact technologies.

Per the Commission, the funding does not have any particular thematic priorities attached to it but it said today it will look to “fast track the awarding of EIC grants and blended finance (combining grant and equity investment) to Coronavirus relevant innovations, as well as to facilitate access to other funding and investment sources”.

The deadline for this call for applications to the EIC Accelerator is 17:00 on March 18 CET.

The Commission has a page of tips for applicants here.

It notes EIC funding is already supporting a number of startups and SMEs with “Coronavirus relevant innovations” from funding awarded in previous rounds — pointing to the EpiShuttle project for specialised isolation units; the m-TAP project for filtration technology to remove viral material; and the MBENT project to track human mobility during epidemics.

The EIC is itself funded under the EU’s Horizon Europe research framework program.

Back in February the Commission said it expected to sign off on a significant increase for the EIC budget as of this month — to support “game-changing, market-creating innovation and deep-tech SMEs to scale-up”, as it works towards launching the next seven-year round of the Horizon Europe program, in 2021.

It also said there would be a one-off EIC Accelerator call for ‘green deal’ start-ups and SMEs in May 2020 cut-off round, to align with its push to make the bloc carbon neutral by 2050.

America’s largest companies are not covered under a bill passed by the House of Representatives on Friday that is supposed to support American workers impacted by the spread of the novel coronavirus.

The bill still has to be voted on by the Senate and approved before it can be signed into law, but its structure leaves a gaping hole in the prevention strategy the government has said is necessary to reduce the COVID-19 outbreak in the US.

“No American worker should worry about missing a paycheck if they’re feeling ill,” said Vice President Mike Pence at the Sunday press briefing from the Coronavirus Task Force. “If you’re sick with a respiratory illness stay home.”

However, millions of Americans potentially don’t have the ability to make that choice under the congressional aid package touted by both Democrats and Republicans. By excluding companies with more than 500 employees from the Congressional aid, the health and welfare of millions of Americans in industries providing goods, manufacturing, and vital services to most of the country is being left up to the discretion of their employers.

Details of the legislative compromise were first reported by The New York Times yesterday. And chart published by The New York Times illustrated just how many companies didn’t have paid sick leave policies in place as the coronavirus began to spread in the US (companies have changed policies to respond to the coronavirus).

Image courtesy of The New York Times

Big technology companies took the lead early this month in changing policies for their workers and by the end of last week many of the country’s largest employers had followed suit. But it looks like their work won’t be covered under the government’s current plan — and that any measures to extend sick leave and paid time off will be limited to a response to the current outbreak.

These large employers have already responded by closing stores or reducing hours in areas where most cases of the novel coronavirus have been diagnosed — and companies operating in most of those states are required by law to offer paid leave to their hourly employees and contractors.

Companies who have responded to the outbreak by changing their time-off and sick leave policies include Walmart, Target, Darden Restaurants (the owner of the Olive Garden restaurant chain), Starbucks, Lowes, and KFC, have joined tech companies and gig economy businesses like Alphabet (the parent company of Google), Amazon, Apple, Facebook, Instacart, Microsoft, Postmates, Salesforce, and Uber in offering extended leave benefits to employees affected by the coronavirus.

These kinds of guarantees can go a long way to ensuring that hourly workers in the country don’t have to choose between their health and their employment. The inability to pass a law that would cover all workers puts everyone at risk.

Without government stepping in, industries are crafting their own responses. Late Sunday, automakers including GM, Ford, and FiatChrysler joined the United Auto Workers union in announcing the creation of a coronavirus task force to coordinate an industrywide response for the automotive sector.

As the Pew Research Center noted last week, the bill proposed by House Democrats had initially proposed temporary federal sick leave covering workers with COVID-19 or caring for family members with two-thirds of their wages for up to three months; expiring in January 2021. The measure would have also guaranteed private employers give workers seven days of paid sick leave with another 14 days available immediately in the event of future public health emergencies.

Most workers have less than nine days of sick leave covered under current state legislation. There is no national mandate for paid sick leave. After one year on the job, 22 percent of workers have access to less than five days, while another 46 percent of employees can get five-to-nine days of paid sick leave. Only 38 percent of workers have between ten and fourteen days of leave.

The Pew Research Center also reported that the lack of access to paid sick leave increases as wages decline. Over ninety percent of workers receiving hourly rages over $32.21 have some form of paid sick leave. Only about 50 percent of workers who make $13.80 or less have access to some form of paid sick leave. For Americans who make under $10.80 an hour, only about 30 percent receive any sick leave.

The Big 3 Detroit automakers — GM, Ford, and Fiat Chrysler Automobiles — have partnered with United Auto Workers to form a task force aimed at protecting workers and limiting the spread of COVID-19, the disease caused by coronavirus.

The task force was announced Sunday.

UAW President Rory Gamble along with leaders from the three automakers, a group that includes GM Chairman and CEO Mary Barra, Ford Executive Chairman Bill Ford, Ford President and CEO Jim Hackett and FCA CEO Michael Manley will lead the task force.

Gamble said that “all options related to protecting against exposure to the virus are on the table.”

The task force will coordinate efforts to prevent the spread of the disease and will take a wide range of actions that include enhanced visitor screening and increased cleaning and sanitizing of common areas and touch points. Safety protocols for people with potential exposure, as well as those who exhibit flu-like symptoms will also be developed.

Electric scooters are still unlawful to use on public roads and pavements in the UK, but that hasn’t stopped many consumers from using them anyway to get from A to B. Now, in an effort to wean people off the use of individual automobiles, the government may finally be coming around to bringing its rules up to speed with the times, moving one step closer to legally using e-scooters alongside other new mobility technology, such as drone deliveries for medical supplies, in the coming years.

The UK’s Department for Transport today announced a new consultation into exploring new transportation modes that include e-scooters and e-cargo bikes, as well as bringing the on-demand model (popularised by services like Uber) to buses and other public transport alternatives, and using drones for medical deliveries. Alongside this, it announced funding of £90 million ($112 million) for three new Future Transport Zones to trial these new services.

Together, the moves represent some of the more significant headway that the UK has made in recent years to work with and consider what transportation will look like in the country in the years ahead, in particular as an alternative to consumers using private vehicles to move things and getting around.

Some argue that the UK has lagged behind other European countries like France when it comes to bringing e-scooters to the wider market, with up to now the only legal services operating in closed “campus” environments.

“We are on the cusp of a transport revolution. Emerging technologies are ripping up the rulebook and changing the way people and goods move forever,” said Transport Secretary Grant Shapps, in a statement. “Our groundbreaking Future of Transport programme marks the biggest review of transport laws in a generation and will pave the way for exciting new transport technology to be tested, cementing the UK’s position as a world-leading innovator. This Review will ensure we understand the potential impacts of a wide range of new transport types such as e-scooters, helping to properly inform any decisions on legalisation. Funding these new Zones across the country will also help us safely test innovative ways to get around, creating a greener future transport system for us all.”

Generally speaking, the announcement is an overdue, but clear, vote of confidence in the idea of trying out new kinds of services and models, in the wake of a number of them not living up to expectations. Bird, for example, introduced an e-scooter trial in London two years ago, but with a very limited range and scope, in the Olympic Park campus in London, it’s had little exposure in the wider market. Citymapper last year, meanwhile, shut down its on-demand bus trials after finding they also didn’t work as the startup had hoped they would. (It’s also an interesting turn for the government, which took a hands-off approach to initial Uber’s roll out, only to see the company run into controversy; perhaps learning from that, it seems now to be more engaged in how new services and technologies roll out.)

The news today essentially gives a lease of life to companies hoping to build businesses on these new technologies and services.

The DfT is short on details around what the consultation will entail but did include some specifics on scooters, in what would be the government’s first concerted efforts to consider how what requirements would need to be introduced to legalise e-scooters, including traffic laws, minimum age and vehicle requirements, insurance requirements and parking rules (parking fees being a key revenue driver for local councils).

(The backstory here is that scooters, which are counted as motorised vehicles in the UK, are still illegal because regulations around insurance, traffic laws and driver requirements, have been determined for them, and so even to test new services, the laws will need to be amended. The DfT said that local authorities will contract one or more e-scooter companies to run services.)

“This is great news for UK towns and cities, we’re delighted that the Government is exploring offering greener ways to travel,” said Alan Clarke, Director of UK Policy and Government Affairs at Lime, in a statement. (Lime currently offers bikes on demand in various locations, but has yet to bring its scooters to the UK market.) “Shared electric scooters are a safe, emission-free, affordable and convenient way of getting around. They help take cars off the road with around a quarter of e-scooter trips replacing a car journey — cutting congestion and reducing air pollution. Lime operates shared dockless e-scooter schemes in over 100 locations globally and in 50 cities across Europe. We look forward to contributing to the government’s call for evidence to develop clear rules and minimum safety standards to allow this environmentally friendly option to be made available and hope to participate in upcoming trials on UK streets.”

The new transport zones — in Portsmouth and Southampton, the West of England Combined Authority, and Derby and Nottingham — will be modelled on an existing region established in the West Midlands (covering Birmingham, Coventry and Solihull), which has been a testing ground for future transport policy and technology such as autonomous vehicles.

“The Zones will provide real-world testing for experts, allowing them to work with a range of local bodies such as councils, hospitals, airports and universities to test innovative ways to transport people and goods,” the DfT said in a statement.

As with the existing region, the new ones will explore autonomous vehicle trials, as well as scooter pilots, bus schemes that operate on on-demand models, and multi-modal transportation apps. Portsmouth and Southampton will also look at last-mile deliveries using e-cargo bikes and medical supply drones. Derby and Nottingham have been granted £15 million to build mobility hubs to promote different public transportation options alongside bike hire, car clubs and electric vehicles.