(#27) Tesla's supercharge strategy network; Netflix was right on password sharing; Google is only ad-focused; and the 2nd largest coffee producer is...Vietnam
(#27) Tesla's supercharge strategy network; Netflix was right on password sharing; Google is only ad-focused; and the 2nd largest coffee producer is...Vietnam
Owning and managing a platform is hard and Reddit or Twitter are the best examples to prove it; a PC with Chat GPT as Co-Pilot built in Windows is a compelling product.
Strategy
Apple’s Vision Pro - ongoing discussions
I have covered Apple’s new product quite enough, but I do feel the need to come up with extra information.
It is rumored that the production of these devices is limited to 500k - 2m devices in the first year. Due to low yield production rates manufacturing seems to be a massive challenge. LINK
This has two direct implications:
1/ The product won’t get cheaper. (maybe even more expensive)
2/ The product will not be available outside the USA, which is not a tragedy, it’s actually how the iPhone started.
My 2 cents: the Vision Pro would be a success starting with the 5th iteration of the product.
P.S. iPhone 15 will have better integration with Vision Pro. LINK
Tesla’s charging network strategy
After granting access to its charging stations to Ford and General Motors, Tesla is bringing on the deal Rivian too. LINK
Now, for those who don’t know yet Tesla is using a NACS connector (North American Charging Standard), but it seems that starting in 2025 a new standard will be mandatory: CCS (Combined Charging System). NACS has better performance and it’s easier to use.
So, besides the encouragement of EV adoption by bringing its 12,000 charging stations to the aforementioned companies, why is Tesla pursuing this strategy? I believe there are two main reasons:
1/ Cash generation - from licensing, and charging fees to building extra capacity around those charging stations
2/ Cool products - by showing to consumers that innovation (ie. coolness) will largely remain in the company in this industry and others will just follow (ie. copy or adapt)
Either way I think is a good strategy.
Netflix’s Crackdown on password sharing
As a result (and as expected), the platform registered additional subscriptions. It was a good decision and a normal step for many who used others’ passwords. On top, this puts pressure on the competition because, in the end, most consumers will go with only one streaming platform. It is the same for music streaming, gaming, and so on.
If you are under 35 and you don’t have Netflix you are not cool, so you will pay. LINK
Reddit’s strategy
This is the perfect situation (example) when first you have the business model and later think of monetization. Add some mismanagement a la Twitter and you have the perfect storm. Like in life, at some point, you have to take some unpopular decisions (ie. asking to prohibit access to APIs), but even then you don’t know if will be enough. Probably not. LINK
Google Domains sells to Squarespace
This is a classical strategy move from Google: if is not Ad-related or something with significant potential, then sell it or kill it. Usually, Google goes with the latter strategy, hence the growing Google Graveyard.
This is also a reminder that you cannot really rely on Google for other services too: email, cloud, etc. Consider yourself warned. Sale, Google Graveyard
AI-as-a-strategy (Microsoft’s story)
If you don’t know by now Microsoft will incorporate Chat GPT (AI Copilot) in its Windows 11. The company thinks that this can be a move to better differentiate Windows (PCs) from Mac. By the way, nobody (and I mean literally no one) is using PCs in Silicon Valley. So, the company is going also on additional fronts:
1/ Develop its Surface product line
2/ Consolidate emerging markets
3/ Push for coolness, by adding a personal AI to everyone. LINK
Two ideas on Chips
1/ “Made in China 2025” strategy is an open war declaration to foreign companies. It seems it can’t be done…for the moment. (China is ten years behind on advanced chip technology).LINK
2/ Intel is investing in a chip plant in Poland, making the largest foreign investment in the country. Diversifying the supply chain is a priority for all companies with supply chains in Asia. LINK
Revolut Ultra
The company launched its VIP plan at around $50 / month subscription. If you travel often, than is a must have. A short reminder on Revolut, they reported recently the financial results for 2021. First profitable year came from crypto transaction fees and knowing the banking industry their next profitable years will come from loans, not subscription plans. LINK
Knowledge Partner: EY Romania
In our monthly EY Geostrategic Analysis, the EY Geostrategic Business Group (GBG) provides its insights on key geopolitical developments. Each issue includes our take on recent or upcoming political risk events and what they mean for global business. Read more.
Artificial Intelligence
Raising capital
If you have a start-up and you are raising money you should mention in the header “generative AI” or something like that. Mistral AI, a French start-up, just raised $113m to compete with Open AI. Is a must for Europe to have local players in this emerging and exciting market. LINK
Consultants and Generative AI
Amazon has identified 67 use cases for Chat GPT. So, note all companies will have the right capabilities to develop and implement AI initiatives, hence will use consultants. LINK
EU AI Law
There is no surprise that the EU is preparing to regulate AI. As always, regulation will help the incumbents and drive away the start-ups. Just reading the requirements it drew my attention that probably nobody is compliant today. Bureaucrats at work! LINK
Chat GPT with everything
Mercedes will add Chat GPT to its cars so you have a real co-pilot. Using “Hey Mercedes” to activate the copilot is not a great way; even Apple wants to remove “hey” from “hey Siri”. LINK
Data
Reuters Digital News Report 2023. So much interesting data. LINK
24% of the US podcast are about crimes. LINK
Global Skills Report 2023 by Coursera. LINK
World’s top largest 10 Asset Management Funds
The World’s Top Coffee Producing Countries. LINK
Outside interest
The warnings are always there
At the time of writing this newsletter a small (commercial) submarine is missing around Titanic. Former passengers mentioned regulatory and safety concerns, so, like in business, any bad thing doesn’t just happen. There are at least some warnings along the way. LINK
Fascinating Budapest:
5 years ago Greta sent this tweet:
The super-rich are obsessed to buy houses with multiple bathrooms. LINK
Solar Panel waste: The dark side of clean energy. LINK
Should you pursue an MBA? Here are my thoughts. LINK
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