This is Why Apple iPhone Sales are Tanking in China

Apple is performing terribly in China, but it’s not because of the economy
Provided by MarketWatch

It was early morning eight months ago when Tim Cook shot an email to TV personality Jim Cramer telling him the company was doing fine in China. The global markets roiled amid broader macroeconomic concerns, yet Apple’s shares quickly recovered on Cook’s optimism.

Two quarters later, things are far from rosy.

Sales in the Greater China region plunged 26% in its fiscal second quarter, marking the biggest percentage decline of any of Apple’s geographic regions. Total sales fell for the first time since 2003, while the iPhone suffered its first-ever quarterly decline.

“Whereas China accounted for half or more of the company’s revenue growth for several quarters, it’s now accounting for half its year-on-year shrinkage,” said Jan Dawson, founder of tech consulting company Jackdaw Research.

Apple   blamed the slowdown on macroeconomic issues and tough year-over-year comparisons, with the iPhone 6S flailing next to the huge success of the iPhone 6 and iPhone 6 Plus. Cook also blamed Hong Kong, which accounted for the vast majority of declines in Greater China, because its dollar is pegged to the U.S. dollar, which has strengthened significantly over the past two years, thus making it more expensive for international shopping and tourism in the country.

But there are reasons to believe the quarter’s troubles aren’t just cyclical and isolated. People in China are buying more phones from local manufacturers, such as Huawei Technology Co. and Xiaomi. And the Chinese governmentrecently banned certain media services from Apple, as it clamps down on distributed content, a move that could weigh heavily on Apple’s next big revenue driver: services. When excluding Hong Kong, mainland China sales still fell a whopping 11% during the quarter.

“Only super rich, really high-paid professionals buy iPhones in China — you’re not talking about lots and lots of people,” said John Zhang, faculty director of the Penn Wharton China Center, and a professor of marketing. “That means at some point, you’re not going to be able to grow unless you put out new innovative products to keep your people engaged, which is not the case with Apple.”

While the company released the Apple Watch last summer, those sales still pale in comparison with Apple’s more traditional products. The four-inch iPhone SE was released last month in part to target China’s sprawling middle class, yet the phone’s starting retail price of $399 is still expensive compared with the Xiaomi’s sub-$200 phones, and analysts have said it doesn’t appear to be growing in-line with expectations.

“It’s almost like a fashion designer who runs out of ideas and is making clothes tighter and looser and there’s no new design,” said Zhang. “When you set the phone downward, you’re reaching out to people who don’t want to pay the higher price, but then you get into the territory that many other Chinese manufacturers feel very comfortable with, such as Xiaomi.”

Competition in China is increasing across the board, with lesser-known Chinese manufacturers OPPO and Vivo making IDC’s list of the world’s top five smartphone manufacturers for the first time in the first quarter, ousting Lenovo and Xiaomi, which slipped to the sixth and seventh spots.

Those companies offering mid-tier phones in China priced below $250 are growing in line with the improving wages of the middle class. However the majority of those wages are still far below the premium market that Apple’s phones target in China.

“Lenovo benefited with ASPs below US$150 in 2013, and Xiaomi picked up the mantle with ASPs below US$200 in 2014 and 2015. Now Huawei, OPPO, and Vivo, which play mainly in the sub-US$250 range, are positioned for a strong 2016,” said Melissa Chau, senior research manager with IDC’s Worldwide Quarterly Mobile Phone Tracker team.

The China slowdown can’t be dismissed, especially since other U.S. companies, including McDonald’s and Caterpillar , have recently reported improving conditions in the region.

Shares of Apple plunged 6.2% to $97.87 in afternoon trade, pushing the stock down more than 26% on the year. The stock was on track for its eighth decline over the last nine trading days.

But there are analysts who believe things will start to recover once the economy starts to improve and wealthier Chinese customers get ready to upgrade their phones, potentially starting with the iPhone 7 in September.

“The [high-end] segment they are playing in is still growing much faster than the market,” said IDC analyst Ryan Reith. “In 2015 we saw China smartphone growth slow to 2.5%, yet the premium segment (>$400) grew close to 50%, and this was largely dominated by Apple.”

When it comes down to it, said Pacific Crest analyst Andy Hargreaves in a note to clients on Wednesday, iPhone customers “remain extremely loyal.”

That’s an obvious benefit for Apple, especially as it tries to roll out increased pay-for services such as music and payments. The data suggest Apple is “likely to continue growing iPhone unit sales over several years, albeit modestly,” he said.

Written by Jenniger Booton of MarketWatch

(Source: MSN)

Facebook Stock Rockets Higher as Earnings Shatter Estimates

Mark Zuckerberg recently revealed Facebook's 10-year plan to connect the entire world and bring it online
Provided by Belfast Telegraph

Tech giant Facebook crushed analyst estimates when it reported first-quarter results on Wednesday.

The company reported adjusted first quarter earnings of 77 cents per share on revenue of about $5.38 billion. Analysts had expected Facebook (FB) to report earnings of about 62 cents per share on $5.26 billion in revenue, according to a consensus estimate from Thomson Reuters.

In fact, Facebook’s earnings per share figure was 10 percent better than the highest estimate of 41 Wall Street analysts.

Facebook also said it was proposing the creation of new class C shares. If the proposal is approved, shareholders would get two C shares for each class A or class B share they own. This would potentially allow Facebook CEO Mark Zuckerberg to sell some of his shares while still maintaining control of the company.

“This proposal is designed to create a capital structure that will, among other things, allow us to remain focused on Mr. Zuckerberg’s long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook,” the company said in its earnings release.

The adoption of the proposal is subject to the approval of Facebook shareholders at its 2016 annual meeting of Stockholders in June, the company said.

Facebook also reported Wednesday that monthly active users, a key metric for the company also known as MAUs, were 1.65 billion at the end of the first quarter. Wall Street had only expected 1.63 billion, according to StreetAccount.

Wall Street had expected the social media giant to announce a year-over-year quarterly revenue increase of about 48 percent — massive growth for a company Facebook’s size. Facebook’s actual growth came in at 52 percentagainst the comparable year-ago revenue of $3.54 billion, the company said.

But skittish tech investors are carefully watching Wednesday’s announcement after shares in Apple (AAPL) and Twitter (TWTR) plunged on their Tuesday reports.

Facebook held its annual F8 global developer conference earlier this month, discussing a slew of initiatives including its work on artificial intelligence and virtual reality. The most widely heralded announcement of the event, however, was Facebook’s push for chatbots on its platforms.

Chatbots — interactive, responsive messaging programs — could allow users to communicate with brands and companies through Facebook. If successful, such a development would effectively leapfrog the currently dominant mobile app economy and allow the company to create its own thriving digital ecosystem.

At F8, Facebook CEO Mark Zuckerberg announced Messenger Platform beta, which will allow developers to create “natural-language services to communicate directly with people.”

But Zuckerberg also made news during that event for speaking broadly about his company’s goals, saying that “instead of building walls, we can help people build bridges.”

Although Zuckerberg’s remarks were likely partly referencing the tight internet control maintained by countries like China — where Facebook is blocked by the “Great Firewall” — they were also about the ongoing immigration debate in the U.S. where Republican candidates like Donald Trump and Ted Cruz have supported building a wall along the border with Mexico.

A day after that event, a Trump spokeswoman lashed out at the Facebook CEO, saying, “I think I’ll take Mark Zuckerberg seriously when he gives up all of his private security, moves out of his posh neighborhood and comes live in a modest neighborhood near a border town.”

Written by Everett Rosenfeld of CNBC

(Source: CNBC)

eBay gets Boozy with Wine Site

[UNVERIFIED CONTENT] Ebay sign on the Hamilton Avenue Campbell, CA campus. red, blue, yellow and green primary colors on black background.
Provided by CNET
When people think of wine, they might imagine California’s Napa Valley or Italy’s farmland, but almost certainly not eBay’s website.

The giant marketplace, which includes 900 million listings of various items at any given time, wants to shift that vision. The company is seeking to become an online destination for your next purchase of pinot noir or chardonnay, along with the place to find eBay staples like handbags, smartphones and Beanie Babies.

On Wednesday, eBay unveiled a new US-based site called eBay Wine and a partnership with startup Drync to bring a broader selection of reds, whites and rosés to eBay’s new online store.

“It’s a great opportunity for eBay to harness the power of the marketplace to offer customers more selection and listings,” Alyssa Steele, an eBay executive leading the wine effort, said in an interview.

The new site and section in eBay’s mobile app will start with over 10,000 wines from around the world, with inventory expected to double in the first three months. That could help eBay provide a wider selection than Amazon’s online wine store, which already includes thousands of listings. All wine sellers are vetted by eBay, and customers need to check each listing to see whether a particular seller can ship to their state.

eBay has actually been selling thousands of wines on its site for years. However, company executives would be the first to admit that eBay has done a poor job helping customers sift through its massive selection to find what they’re looking for. That’s where eBay Wine will come in, providing a layout, instead of a mess of listing pages, to help people search for regional favorites, specialty bundles or even specific wine glasses.

eBay is trying to become a more-structured storefront, like its rival Amazon, and less like a bazaar. As a result, eBay Wine may be the first of several new curated destination sites within eBay. CEO Devin Wenig hinted at this possibility during an earnings call Tuesday, saying people should “expect several exciting new category launches soon.”

Amid heavy competition from Amazon, Walmart and a slew of e-commerce startups, eBay hopes sites like eBay Wine and its already-popular eBay Motors can goose revenue from its main marketplace business, which has been on a slow decline for the past year.

eBay’s new wine push comes as online sales of beer, wine and liquor have been showing strong growth. The category has been slow to come to Internet shopping due to state regulations for shipping alcohol. Market researcher IbisWorld reported that online alcohol sales in the US reached $743 million last year, up 11 percent. Yet online alcohol sales remain a tiny niche of overall sales in the industry.

Drync CEO Brad Rosen sees the eBay deal, which will bring Drync’s partnering retailers to eBay’s new site, as an opportunity to change that situation.

“This launch of wine on eBay…is the pivotal moment when we’ll see the mainstream e-commerce of wine,” he said. “And I think that’s huge, because it’s one of the holdout industries to take advantage of the Internet.”

Written by Ben Fox Rubin of CNET

(Source: CNET)

Microsoft Shares Plunge as Results Show Growth is Elusive in Post-PC Market

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Michael Euler/ AP

The cloud may be the future, but the specter of the PC lingers. Microsoft is the latest tech giant whose earnings say that loud and clear.

Microsoft on Thursday posted substantial drops in revenue and earnings as it continues to navigate from its legacy PC business into emerging technologies — a day after chipmaker Intel announced a 11% workforce reduction. (Microsoft owns and publishes MSN.)

The Redmond, Wash.-based company reported a 6% decline in fiscal third-quarter revenue to $20.5 billion. Earnings of $3.8 billion, or 47 cents per share, fell 25%in the same quarter a year ago. Microsoft reported adjusted earnings of 62 cents per share, shy of analyst estimates.

Microsoft (MSFT) shares plunged more than 7% on the news in early trading Friday.

A consensus of analyst reports from S&P Global Market Intelligence anticipated revenue of $22.1 billion and earnings per share of 64 cents. Microsoft’s Q3 revenue guidance was $21.1 billion to $22.3 billion.

The quarterly miss comes as the software giant continues to pursue its years-long gambit to transform itself from a license-fee-focused enterprise closely tied to personal computers to a major play in cloud services, virtual reality, gaming and emerging technologies.

But Microsoft’s future remains unclear after nearly a decade of struggles underscored by declining PC unit shipments. The slowly eroding PC market and tightening IT budgets have punctured revenue for Microsoft and others globally. Sagging PC sales were a major reason why Intel is slashing 12,000 jobs and IBM registered its 16th straight quarter of declining sales.

Microsoft said revenue from Windows software licenses dipped 2% during the March quarter, outperforming the overall PC market.

The computing giant has bet heavily on new technologies, and initial results are promising but uneven. Its cloud business, which includes Azure and server software, rose 3% to $6.1 billion in revenue in the quarter, a shallower growth rate than some expected.

Office 365, its subscription-based suite of productivity services, passed 70 million monthly users. And HoloLens, the company’s space-age holographic computer goggles, has wowed analysts and spurred interest among consumers and corporations such as Volvo and NASA over its possibilities.

Windows 10 is also Microsoft’s fastest-spreading Windows operating system, with more than 270 million installations on computing devices.

Monthly active users of Xbox Live surged 26% from last year, to 46 million.

Since he took over as Microsoft CEO two years ago, Satya Nadella has also cut ties with bum investments in Nokia and struck partnerships with the likes of Salesforce and Apple. The moves have resonated with investors, who have bumped up Microsoft’s stock 30% over the past year.

On Thursday, before the Q3 results were announced, Microsoft shares edged up 0.5% to $55.87.

Written by Jon Swartz of USA Today

(Source: USA Today)

Ford Pays $199,950 Before Taxes for Tesla’s 64th Model X SUV

1200x-1
Provided by Bloomberg

Ford Motor Co. paid $199,950 — $55,000 more than the sticker price — to buy one of the first sport utility vehicles made by Tesla Motors Inc., according to vehicle registration documents obtained by Bloomberg.

The white Model X is a Founders Series with a vehicle identification number indicating it was the 64th one made at Tesla’s factory in Fremont, California. The vehicle, with Michigan plates, has been spotted recently in the Detroit area. Registration records show that Ford purchased the vehicle March 1. The original owner, a California coin dealer, bought it as part of Tesla’s customer-referral promotion.

Automakers often buy cars made by competitors for road testing and for “tear-downs” to reveal components and materials and how they’re put together. But it’s unusual to pay such a high price — almost $212,000 after Michigan sales tax and title — for such an early model.

“Wow, I hope that investment pays off in some good intelligence,” Michelle Krebs, senior analyst for researcher Autotrader.com, said of the premium Ford paid. “If you’re going to be one of the early buyers, you’re probably going to pay well over list. But that’s significant.”

Krebs suspects other major automakers, such as General Motors Co. and Toyota Motor Corp., are also among early buyers of the Model X. Automakers are looking for ways to make highly profitable SUVs more fuel efficient as they race to meet a federal mandate to average 54.5 miles per gallon by 2025. Ford is investing $4.5 billion in electrified vehicles and will add 13 electric cars and hybrids by 2020.

Future SUVs

“We’re going to definitely see more electrification and light-weighting,” Krebs said. “Those are the things I suspect Ford would be taking special note of as they develop their sport utilities of the future.”

Krebs said she hopes Chief Executive Officer Mark Fields and Executive Chairman Bill Ford — as well as the automaker’s top engineers and designers — get some seat time in the Model X.

“Everybody should be exposed to one of your hottest competitors,” Krebs said.

Tesla’s first Model Xs are limited-edition Founders Series — fewer than 100 of them were made — that typically go to board members and close friends of the company like Google co-founder Sergey Brin. Those are followed by the Signature Series models, which require a $40,000 deposit from customers and start at $132,000. The window sticker price on the all-wheel-drive Model X P90D that Ford purchased is $144,950, including the $10,000 Ludicrous Speed Upgrade that boasts a 0-to-60 miles per hour time of 3.2 seconds.

Original Owner

The original owner of the Model X that was ultimately purchased by Ford was Wayne Skiles, 71, who owns and operates the Carousel Coin & Jewelry Exchange in San Bernardino, California. Skiles owns a Model S sedan and participated in Tesla’s Model S referral program. Customers who referred at least 10 friends to purchase a Model S were able to buy a Model X Founders Series for a base price of $116,700.

“I sold 11 Model Ss. So I got a Founders Model X and immediately flipped it for a profit,” said Skiles in a phone interview. “The car never came to California. I flew to Chicago, took physical delivery of the Model X, and immediately drove it to a dealer in Chicago and sold it.”

Ford bought the vehicle from Corporate Auto of Auburn Hills, Michigan, according to the documents.

“It is a common industry practice among many automakers to buy production vehicles for testing as soon as they are released,” said Ford in a statement. “Sometimes, this means automakers pay more than sticker price to acquire them as quickly as possible.”

Quality Concerns

Tesla officially launched the Model X at a splashy event in late September, years after the vehicle’s early 2012 unveiling. The company announced that it delivered 2,400 of the SUVs in the first quarter as it continues to ramp up production. But early models are not without flaws: Several customers have reported issues with sensors on the “falcon-wing” doors that open vertically. Consumer Reports on Tuesday published a report about quality problems on early models. Tesla shares slipped 2.6 percent on Tuesday to $247.37, paring their year-to-date gain to 3.1 percent.

“We are committed to making the world’s most reliable cars,” said Tesla in a statement Tuesday. “While we have seen some issues with early Model X builds, the issues are not widespread, and we are working closely with each owner to respond quickly and proactively to address any problems. We will continue to do so until each customer is fully satisfied. This commitment is one of the reasons why 98 percent of our customers say they will buy another Tesla as their next car.”

Earlier this month, Tesla issued a recall on 2,700 Model Xs made before March 26 to repair the third-row seats after strength tests done by the automaker found a potential defect. Tesla has advised customers not to let anyone sit in those seats while the car is in use.

Musk has said that the Model X’s unique features were difficult to engineer and relied heavily on parts suppliers. Tesla said this month that Model X deliveries missed first-quarter expectations because of parts shortages stemming from “Tesla’s hubris in adding far too much new technology” to the Model X.

Written by Dana Hull and Keith Naughton of Bloomberg

(Source: Bloomberg)

Uber is Killing Off its Instant Food Delivery Option in New York City

Uber is killing off the “instant” option in UberEats, its food-delivery service, just one month after the standalone app launched in New York City.

“In order to bring you the most exciting selection, the highest quality food, and the fastest delivery time, we’ve decided to narrow our focus,” Uber wrote in an email to Eats users in New York City on Monday. “Starting today, 4/18, we’ll no longer be offering a daily Instant Delivery lunch menu.”

Provided by Quartz

The UberEats app debuted in cities across the US in mid-March, with thepromise to make “getting great food from hundreds of restaurants as easy as requesting a ride.” At launch, UberEats offered New Yorkers two different ways to order food. The first was a Seamless-like experience, in which customers could order food from any of the dozens of restaurants on the app, and Uber would facilitate the delivery.

The second was an upgraded “instant delivery” menu that featured two pre-set lunch options from a rotating group of restaurants that Uber said it would deliver in as little as 10 minutes.

To make these rapid deliveries work, instant UberEats had different logistics from its regular service. Instead of dispatching bike couriers to restaurants, Uber had its inventory for the instant menu brought to a central holding facility in Manhattan’s Midtown neighborhood every morning. Instant deliveries were also made to the curb, whereas normal UberEats orders would be brought to a user’s door.

When Uber demonstrated Eats in March a day ahead of its New York City launch, the company was clearly excited about the instant setting, which was the first option at the very top of the app. Emails that UberEats sent to users also prominently highlighted the day’s instant delivery options.

Provided by Quartz

Still, it was unclear at the time exactly how the economics of instant UberEats worked. Uber, for example, said it did not purchase the food, but rather let restaurants determine how much they wanted to provide each day. The company also declined in March to provide specifics on how many Eats orders its bike couriers could deliver at a time, or per hour.

Sarah Maxwell, a spokeswoman for Uber, said the instant delivery option is only being phased out in New York City, but will still exist in all the other UberEats markets. New York UberEats users will still be able to order from the menus of more than 100 restaurants that partner with Uber in the city. Uber had offered a version of Eats in New York City similar to the instant option within its main, flagship ride-hailing app since April 2015.

Food delivery is a hot space right now, with Uber, Postmates, DoorDash, and Caviar—not to mention Seamless—all vying for consumers’ loyalties. Each of these companies is trying to make it big by applying the Uber model to lunch and dinner logistics. Each is building out a technology platform and hiring an army of independent contractors to bring food on-demand from restaurants to users.

But the actual logistics of these business have proven challenging. The New York Times reported in February that DoorDash spends north of $200 to recruit each driver. Many stopped working for the company within a year. (“Dashers by definition will always churn,” DoorDash CEO Tony Xu told Quartz in early March. “They’re people looking for flexible work.”) Late last month, DoorDash raised new funding, selling shares at a 16% discount. Postmates said in February that it planned to raise money in the first quarter, but the company hasn’t shared any news since then.

Written by Alison Griswold of Quartz 

(Source: Quartz)

Elon Musk Ahead of Pace for $1.6 Billion Tesla Motors Payday

Provided by MSN 
Elon Musk is ahead of schedule to get a huge payday from Tesla Motors Inc. even though he earns less than $40,000 in annual salary.
In 2012, the electric carmaker awarded its billionaire founder 5.27 million options tied to milestones including developing new vehicles and ramping up production. While he was given until 2022 to meet the goals, he has already achieved 50 percent of them, according to a proxy statement issued April 15. That means he may get $1.6 billion well before then.

Under the 2012 stock plan, Musk earns 1/10th of the options every time Tesla hits a pair of goals — one tied to its market value and another to the company’s operations. While he’s achieved seven targets tied to the growth of Tesla’s market capitalization, he’s only hit five of 10 operational ones.

That’s been good enough for him to receive half of the options so far. With a strike price of $31.17, those 2.64 million options would be worth $589 million if he had exercised them at Friday’s close. The total option award is intended to compensate Musk, who has never accepted his salary, for 10 years.

For Musk to receive the $1.6 billion, he needs to boost Tesla’s value another 28 percent, to $43.2 billion. He also has to maintain a 30 percent gross profit margin for four quarters, bring the car-maker’s aggregate production to 300,000 vehicles and bring the Model 3 to market.

Provided by Bloomberg

In April, six analysts set 12-month price targets of $325 or more for Tesla, the price at which Tesla’s market value would exceed the maximum target.

“Many of the requisite milestones were viewed as very difficult to achieve” when they were granted in 2012, Tesla said in the filing last week.

Khobi Brooklyn, a Tesla spokeswoman, said the company considers the April 15 filing its official comment.

Musk has faced some hurdles recently. Last week, Tesla recalled 2,700 Model X sport utility vehicles to repair third row seats, after the SUV was late coming to market. Sales missed expectations because of parts shortages, the company said in an April 4 press release. In November, Tesla recalled 90,000 Model S sedans to check seat belts.

None of that has hurt the stock price. Tesla was up 23 percent in the 12 months through April 18.

Written by Caleb Melby and Alicia Ritcey of Bloomberg

(Source: Bloomberg)

Big Banks Shift to a New Fintech Strategy

Provided by CNBC

Big banks’ fintech investing strategies are shifting at a crucial time in the nascent industry’s development.

This year, big banks seem more eager to partner with or buyout startups challenging crucial lines of business in the financial services industry. It comes after years of banks’ simply being willing to buy in as minority stakeholders in startups. Fintech, or financial technology, is used to make financial services more efficient.

More recently, banks are committing big bucks to buyouts. It comes after a year in which fintech funding hit new highs. Ally Financial (ALLY) bought online brokerage TradeKing Group, the firm announced earlier this month, in a $275 million deal. BlackRock (BLK) also decided to tap into fintech, last August, with the $150 million acquisition of online investment firm FutureAdvisor.

Banks aren’t always spending to buy startups with big-name investors — or big price tags. When Goldman Sachs (GS) last month bought Honest Dollar, the Texas-based online retirement planning service, the startup had raised just $3 million in venture funding, according to Crunchbase. The bank didn’t disclose its purchase price and didn’t comment on the deal. TradeKing, as well, raised less than $10 million in venture funding, according to Crunchbase.

It isn’t just U.S. banks eager to beat back the rising tide of disruption. Spanish bank BBVA bought out Finnish banking startup Holvi last month, and didn’t disclose terms — it also wasn’t BBVA’s first deal in that sub-sector. BNP Paribas earlier this month announced a partnership with SmartAngels, a direct investing platform for crowdfunding deals, as well.

“Banks are partnering to keep in the game and keep relevant,” said Alvarez & Marsal managing director David Gibbons. “I think they’ve caught up fairly well.”

Finding partners, rather than M&A targets, is especially helpful to banks that have been squeezed out of some financial services businesses like small business lending. One investor, who asked to not be quoted, said many banks have a difficult time profitably originating small loans. JPMorgan Chase (JPM)partnered with On Deck Capital (ONDK), an online lender that has struggled since its late 2014 IPO, to generate loans to the bank’s customer base.

“Banks are already well down the road to partnering with marketplace platforms for unsecured lending,” said PricewaterhouseCoopers fintech co-lead Haskell Garfinkel. “The biggest challenge right now is to consume it, integrate it and monetize it.”

And while big banks are trying to integrate partners and investments, some may shut other startups out of customer accounts and financial data. In his annual letter to shareholders this month, JPMorgan Chase CEO Jamie Dimon noted unnamed third-party apps take more data than they need, and said they are “doing it for their own economic benefit.”

If banks again starts throttling apps they believe are abusing access, reverberations might have a lasting impact in Silicon Valley, where mobile banking and finance management apps are often dependent on real-time access to customers’ bank accounts. As banks sift out which businesses they must buy, which they may partner with and which they can duplicate independently, various segments of the fintech ecosystem are likely to encounter different treatment.

While financial services investors have put money into startups like MobiKwik and Square (SQ), M&A for payments-focused companies has been rare. Considering that a number of big banks banded together in February to establish the clearXchange network, which allows consumers to process transactions between smartphones without a third-party app, payments is one sub-sector of fintech that could see continuing competition from legacy players.

“It’s a race to the bottom,” said Mariano Belinky, managing partner of Santander InnoVentures, a $100 million fund operated by the Spanish bank of the same name. “We’re going to end up with payments as a free service.”

Written by Jon Marino of CNBC

(Source: MSN)

Tesla Might Use Loophole to get More Buyers a Big Discount

Tesla Model 3 in motion:   
Provided by MotorTrend

Some Tesla owners will be paying much less than others for their electric cars, thanks to tax credits offered by the federal government. A $7,500 credit is available to people buying one of the first 200,000 eligible vehicles made by an auto manufacturer.

As of a few days ago, there were 325,000 pre-orders of Tesla’s new Model 3, each reserved with a $1,000 deposit. Tesla has already sold tens of thousands of other models–roughly 25,000 Model S cars in 2015, for instance–and these too count toward the company reaching the 200,000-sale mark.

At first glance, one might assume that anyone buying a Tesla after the company has already sold 200,000 units would be out of luck and miss out on the $7,500 tax credit. But there’s a loophole. The law actually doesn’t say that the credit expires with 200,001st vehicle sold, but rather at the end of the quarter in which the company hits the 200,000th vehicle. There’s potentially some significant wiggle room here.

According to Automotive News, Tesla could hit that number on the first day of a quarter and then have a few months to pump out as many cars as possible–each eligible for the full $7,500 credit.

Asked by a Twitter user whether this move was on the table, Tesla CEO Elon Musk suggested he would potentially employ it.

With the enormous amount of pre-orders, which amount to $14 billion worth of automobiles, Tesla will have to balance lowering the cost to customers—via the tax credit—with making sure everything runs smoothly. Tesla is already sailing in uncharted waters and is playing a high-stakes game, and a botched car at this level of popularity could scare consumers and push back the electric car’s mainstream adoption for another decade.

Written by Ethan Wolff-Mann of Money

(Source: Time)

New Wing From NASA Could Save Fuel And The Planet

Wind Tunnel Model With Trusses
Provided by Popular Science

The trusses are those awkward parts jutting from the bottom of the plane to its wings.

Early airplanes were a mess. Human flight was new, and as technology moved from “a barely functioning jumble of cloth, wire, and engines” to “deadly war machines” in less than a decade, all sorts of wacky configurations were attempted along the way. One of these early innovations was the truss, a support structure connecting the wing to the body of the plane, which can still be seen in small, prop-driven planes to this day. Jet planes mostly moved away from the design, but now NASA wants to … brace yourself … bring it back.

These new trusses brace the wing so that it can be longer, thinner, and lighter, while still supporting a plane. From NASA:

Researchers expect the lighter weight, lower drag truss-braced wing to reduce both fuel burn and carbon emissions by at least 50% over current technology transport aircraft, and by 4 to 8% compared to equivalent advanced technology conventional configurations with unbraced wings.

Using computational results showing how air would flow around the model, they modify the dimensions and shape of the wing and truss to improve areas that may generate undesirable air flow that would increase drag and reduce lift. Then engineers test models in a wind tunnel using multiple experimental techniques to validate the computations and aircraft performance predictions.

Trusses allow for bigger wings, which means more lift. But there are still some truss issues: the truss itself adds drag, but if well designed, that should be more than offset by the improved wings the plane offers. Besides the fuel efficiency and reduced emissions, there’s a hidden, silent benefit: the wings should be quieter, which is great for anyone who doesn’t love the sound of roaring jets overhead.

Written by Kelsey D. Atherton of Popular Science

(Source: Popular Science)

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