Tech Stock Roundup: AMZN Vehicles & Music, GOOGL Fiber

Tech world never sleeps. So last week was again jam-packed with all kinds of stories from leading players like Amazon (NASDAQ:AMZN) , Alphabet (NASDAQ:GOOGL) , Intel (NASDAQ:INTC) , Microsoft (NASDAQ:MSFT) , Apple (NASDAQ:AAPL) and of course Facebook (NASDAQ:FB) .

So let’s dig into the top stories-

Amazon Vehicles

Amazon is pushing head and shoulders into the automotive retail business. On the face of it, Amazon Vehicles is nothing but an online site that enables people to research new and used cars, parts and accessories while also enabling interaction with car owners. So it’s like a recommendation site and an automotive community combined. Since it’s technically and legally a bit difficult to start an online new car sales business without partnering with existing dealers, Amazon only sells parts and used cars through its other initiative called Amazon Auto. Amazon signed on Hyundai a few days back, which will now send users new cars for testing when they interact through Amazon. The leading online retailer says it already has 35 million users of its Auto and Garage (mechanism to save the details of your car to help you buy parts, accessories, etc) initiatives. So if it can get a large number of people to start using Vehicles, more dealers would be interested in partnering with it for the expanded reach even at the cost of giving up some personal control over their market. This seems to be the goal and one that seems doable given Amazon’s huge user base and Prime loyalty. No wonder Truecar and Autobytel shares sold off on the news.

Amazon’s $5 Music Subscription Service

If a news report from Re/code is to be believed, Amazon is all set to launch a couple of music streaming services next month, despite the fact that it hasn’t finalized things with music labels. It could also be that the talks with the labels are in advanced stages so Re/code’s “industry sources” think it’s a done deal. At any rate, based on information that is currently available, Amazon has a dual plan: the first is a $10 service targeting phones, pretty much like Apple Music and Spotify. The other is intriguing because Amazon is going to offer the same service for $4-5 as long as you use one of its Echo devices. Note that the company expects to sell 3 million Echo units this year and take that to 10 million in 2017.

Google Fiber Cost Cutting

Google Fiber is seeing hard days. The effort that Alphabet said it would spend heavily on this year has just recently been ordered by founders Page and Brin to halve its workforce to 500 and reduce the cost of last mile access to 10% of what it is today, or look at alternative broadband technologies. Apparently the initiative over-promised and under delivered (sinking billion dollars in laying out cables got just 200K users rather than the targeted 5 million). There is also the growing hassle of fighting over poles with telecom incumbents. Surprisingly enough, it is CFO Ruth Porat who was brought in to control expenses that supported the initiative, saying that the business plan was viable, or at least that’s what news reports indicate. But Google isn’t getting out of the game, no way and not yet. The company has other initiatives like balloon Internet for one and even the Fiber unit is tinkering with cheaper wireless technology some of which was acquired through WebPass. Putting fiber rollouts on hold could indicate one of two things: either that the company has made sufficient progress in wireless and is ready to move ahead with it or it plans to sit on its haunches, take stock and maybe make further plans. Investors will certainly be rooting for the former.

Other stories you might have missed-

Corporate

Apple Music Festival In September: This is the 10^th anniversary of the London festival featuring 10 live performances, exclusive playlists, artist news and backstage interviews throughout September. The show will be live-streamed and also provided on-demand to Apple customers across 100 countries. Meanwhile, the company has signed a deal with EE, the mobile streaming arm of telecom company BT, which will give away Apple Music to its customers for six months starting September. Deutsche Telekom (DE:DTEGn) AG’s T-Mobile is planning something similar in Germany. The goal for the telecom companies to lower churn amidst tough competition. Good for Apple.

Apple’s Tim Cook Sells Some Shares: Cook has done well for himself since he took over at Apple with salary, cash incentives and miscellaneous other compensation growing from $4.2 million in 2012 and $4.3 million in 2013 to $9.2 million in 2014 and $10.3 million in 2014. But Apple shares have outperformed the S&P 500 during his tenure so investors aren’t grudging him the cool $200 million he made by exercising his stock options.

WhatsApp Data Sharing With Facebook: WhatsApp users were confronted with the notification that their phone numbers would be shared with Facebook so they could start seeing messages from businesses they are interested in (in other words, ads). Some opted in without reading (as will always be the case) while others protested. But this was always expected after Facebook spent $19 billion to buy out the company and then waived the $1 fee. It was played really well though since it will be difficult for most frequent users to move away.

New Physical Stores By Amazon: Following its first retail store in Seattle, Amazon is rumored to be looking at three more sites in Chicago, San Diego and Portland, Oregon. But it’s all very hush-hush with the company neither confirming nor denying the rumors. Also while CEO Jeff Bezos has said that there’ll be more stores, he’s never said how many, where or around when.

IBM (NYSE:IBM) In Korea: IBM has opened a new data center in Korea as an expansion of its existing relationship with local company SK Holdings C&C to tap the strong growth potential in the region ($445 million opportunity in 2015, which is to grow to a billion-dollar opportunity by 2019 according to IDC). It will offer a range of cloud infrastructure services, including bare metal servers, virtual servers, storage, security services and networking to help customers create public, private or hybrid cloud environments. This is IBM’s 9^th data center in the Asia/Pacific and the 47^th in the world.

New Technology/Products

iPhone Video Sharing: We should have expected it, but somehow we didn’t given Apple’s focus on protecting user data. But things are changing now as the company which has grown on high-end hardware is now seeing those sales slowing. Moreover, in a world that will soon be dominated by artificial intelligence, the inability to harvest data that it helps create doesn’t sound like a good idea. Apple hasn’t confirmed the story but there’s enough info in the media to indicate that the video sharing social networking app that allows users to create, edit and enhance (filter, doodle, etc) video in a minute is truly in the works. More interesting is the fact that these creations will sit in Apple devices and can be pushed to any contacts and/or social networks the user wishes.

Facebook “Lifestage” App: Technology companies are willing to do pretty much everything to collect data especially if it’s from a younger demographic. But this group tends to be more interested in personal sharing, which doesn’t go all that well with Facebook’s determination to publicize. So the company has launched a new app for teens created by an employee who is barely out of the teens himself. It’s a Snapchat wannabe called Lifestage targeting school kids as long as they are located in the U.S. and use an iOS device. The video clips posted by users are combined to create profiles that can be seen by others as long as they declare themselves to be under 22 but since there is no age verification process, pretty much everyone can view the public-only posts. Facebook says this is to increase interaction among teens (or capture their imagination maybe). The app in its current stage reportedly has a 2.5 star rating in the app store hopefully meaning that teens too understand a thing or two about privacy.

Google Chrome Developments: Google is phasing out support for Chrome apps on devices that don’t run the Chrome operating system. So by year-end, new Chrome apps will only run on Chrome devices; in 2017, the Chrome Web Store will no longer display Chrome apps on other operating systems. Access will be cut off in 2018. Usage of these apps is not very high so it makes sense for Google to stop allocating resources to support them. At the same time, Google has been working on obliterating the line between the mobile web and apps with initiatives like accelerated mobile pages and progressive web apps because the browser is where all its advertising revenue comes from. These changes will likely move some developer activity from the apps to the web.

Google Will Punish Mobile Sites With Popup Ads: Google is concerned about customer experience of the mobile web, at least when it sends them there. Interstitials or pop-up ads lead users to click on them by mistake only to bounce out in a matter of seconds, resulting in poorer ROI on those ads while also undermining user experience. Since they benefit no one, the company will penalize sites that have them by lowering their ranking in the search engine results page.

Twitter Message Buttons: Twitter (NYSE:TWTR) is facilitating direct and private communication with brands through direct message buttons. The concept is designed to facilitate engagement with brands on the platform rather than going to rival service Facebook, has started such messaging on its Messenger app. Facebook has more users so obviously wider appeal, but twitter does seem to be doing all it can to stay in the race. And even if it can’t be market leader or surpass Facebook in ad revenue (laughable thought I know), it’s a big wide world out there and the company can still grow.

Pandora’s On-Demand Streaming Service Next Month: Pandora, which has signed up Questlove aka Ahmir Khalib Thompson for a new three-hour weekly radio show called “Questlove Supreme”, is also starting out in the on-demand space. As soon as next month, the company will be offering two new monthly subscription services in addition to the free tier it is well known by. The U.S. and other English speaking countries will get the all-you-can-eat type services for a fixed monthly fee first before it spreads to other countries. This levels it with other services like Spotify and Apple Music and can therefore also lead to licensing issues with music labels.

M&A and Collaborations

Microsoft Acquires AI Startup Genee: Microsoft has been souping up its Office suite for some time now and has even acquired a number of startups (either to acquire the talent/technology or drive out the competition). That’s what it did last week as well with the acquisition of Genee, which acts just like a personal assistant who when copied in an email can set up meetings with the designated person for lunch or otherwise keeping in line with your schedule. Rather neat for corporate purposes, which seems to be exactly Microsoft’s target as it rushes on toward its cloud revenue targets.

Microsoft Encroaches Further On Android: Microsoft has signed yet another deal with an Android hardware maker to get its productivity apps like Office, OneDrive and Skype preinstalled on more Android devices. This time, the deal’s with Lenovo, which will load Microsoft apps on select devices also cross-license some technology covering its Motorola (NYSE:MSI) devices. The Motorola brand hasn’t been doing well recently and Lenovo has also dropped out of the top 5 smartphone vendor list. The deal isnt novel, Microsoft has done similar deals with LG, Samsung (KS:005930) and Xiaomi although the leading brands in China (Huawei, Oppo, Vivo) have stayed away thus far.