Amazon affiliate to buy $27.6 million stake in Indian retailer Shoppers Stop

MUMBAI (Reuters) – An affiliate of Amazon.com Inc has agreed to buy a 1.79 billion-rupee ($ 27.6 million) stake in Indian retailer Shoppers Stop Ltd, the Indian company said in a filing.

Amazon.com NV Investment Holdings LLC, a foreign portfolio investor, will subscribe to about 4.4 million shares, equivalent to an about 5 percent stake, in the Indian retailer at 407.78 rupees apiece on a preferential basis, Shoppers Stop told the stock exchanges late on Saturday.

On Friday, Shoppers Stop shares had closed 3 percent lower at 418.10 rupees on the National Stock Exchange.

The Amazon affiliate will not take a board position, Shoppers Stop, which operates large department stores and other retail outlets, said in the filing.

Reporting by Devidutta Tripathy; Editing by Sam Holmes

Our Standards:The Thomson Reuters Trust Principles.

Tech

This Time It Matters: Why Apple Is Falling

Preface
Apple Inc (NASDAQ:AAPL) is dropping hard after its event to announce the new series of hardware, in particular the new iPhone 8, 8 Plus and X as well as the Apple Watch 3.

It’s Different This Time
Normally when Apple stock dives on lukewarm product reviews we stand firmly in our position that the stock market reaction is over blown. Our simple thesis for that response is to look at demand, which is hypnotically strong, every time. That is not the case this time.

A New Risk is Not Obvious But is Enormous
Apple announced a more complicated lineup of iPhones this time around. It introduced the iPhone 8 series which is an upgrade to the iPhone 7, and then it announced the highly anticipated iPhone X (pronounced iPhone Ten).

Then the company made the iPhone 8 available this month, but pushed delivery of iPhone X to early November, which pre-orders stating in late October. That has created a risk.

It turns out that Apple hyped the iPhone X so much, and poured so much new technology into it, that it has left the demand for iPhone 8 lackluster in Apple terms. Here’s what we mean.

If you go to the Apple Store, and try to purchase an iPhone 8, the wait time is essentially 1-3 days for the smaller memory version. Here is an image:

That is for the iPhone 8, in Los Angeles, on Verizon’s (NYSE:VZ) network. The other networks are essentially the same. A normal wait time for a new iPhone release is usually several weeks, let’s say 2-4 depending on where you are in the world.

There are also reports that in store lines are much smaller than before, with one report pinpointing Sydney Australia, where only 30 people were camped out for the new release. Reports from China are similar.

Here are links to two stories:

Turnout for iPhone 8 Launch in Australia “Bleak” as Customers Hold Out for Upcoming iPhone X
The iPhone 8 launch in Sydney saw “a bleak turnout,” reports Reuters, with fewer than 30 people lining up outside of the Sydney Apple Store on George Street. In past years, hundreds of people have lined up for new iPhones on release day.

Apple Falls After Analyst Report Indicates Weak iPhone 8 Demand
Consumers pre-ordered about 1.5 million handsets on Chinese retail website JD.com in the first three days, compared with about 3.5 million for the comparable period of iPhone 7 orders.

Tim Cook just said he “couldn’t be happier” with the iPhone release (and Apple Watch 3). While sales are lower than prior models, there is one reason, a big reason, that he may actually be telling the truth.

Is There a Plan?
One of the headlines that surfaced from the Apple Event was that the iPhone X was very expensive, starting at $ 999 and climbing to $ 1,200 based on the configuration.

It’s possible, maybe even likely, that Apple decided to release the iPhone 8 for less to make it appear that it was not forcing Apple loyalists to buy a far more expensive phone by offering a reduced priced new model (iPhone 8).

In fact, it does appear that even in the bearish analyst notes, each tends to comment on the fact that demand reduction for the iPhone 8 is simply a reflection of the outsized demand for the iPhone X.

If that’s true, then Apple will have an average selling price significantly higher than in prior times, and if demand is in fact to the point where Apple also sells more units, then that would bring a windfall of profits larger than any company has ever seen in one quarter. If that sound overly bullish, it’s just the choice of words — Apple already has the largest earnings ever in one quarter, so this would be a breaking of its own record — also known more simply as, “growth.”

Back to Risk
While there is a rather bullish narrative to wrap around this odd iPhone selection, there is also, in earnest this time, a reasonable bearish thesis.

Apple won’t be delivering its iPhone X until well into November, and if demand is very strong, it might not even be able to deliver before the holiday season in the United States. And while, certainly, if all of those sales simply occur later in the year (or early 2018), then that’s fine, but to consider that a foregone conclusion is a step we are not willing to take with blind faith.

Some consumers, perhaps many consumers, will not wait. And while Apple loyalists may stick around for a later date, the all-important “Android switchers” (those smartphone Android owners that switch to Apple) may not — and that is a real risk and worthy of a stock drop, until proven otherwise.

Apple’s market share in the United States is jumping as Android loses market share — an under reported but critical phenomenon. On January 11th, 2017, 9TO5Mac wrote iPhone market share grows 6.4% in USA, takes share from Android in most markets.

Apple gained 9.1% in the UK, mostly at the expense of Windows phones.

The iPhone grew its market share in Australia, France, Italy, Japan, Spain, the UK and USA, with Android seeing its own share drop in all of these countries bar Italy, where its growth was less than half that of iOS.

Those are Android switchers and Apple may have just put that group, or at least that trend, in serious jeopardy.

Now What?
We believe the iPhone X is going to be a knock-down drag-out mega hit, and the elevated price will make it yet an even larger success. But, the risk that Apple took, as of right now, is hurting the company both with iPhone 8 sales, and potentially, with Android switchers. And that is not a false narrative — it is accurate.

That risk means the stock should drop, and is dropping.

But, we’re not done yet. What we did not show you, and is easily missed unless you are really looking, is how hard Apple is focusing consumers on the iPhone X over the iPhone 8 — in our opinion.

I recorded a 45 second video arriving on the Apple Store and looking at iPhones. I have turned to video to allow you to make your own decision, as opposed to snapshots, which are too selective and an be used to weave any narrative the author likes.

When you watch this video (below), decide for yourself if you feel that Apple is purposefully pointing people to the iPhone X over the iPhone 8. Here we go:

[embedded content]

That’s hardly headline grabbing footage, but we found it noteworthy.

Apple Watch 3
There have been some pretty poor reviews of the Apple Watch 3 surrounding its LTE connectivity and its battery life. This is one of those times where the reviews are meaningless. Demand is strong and that’s all that matters.

Here is a snapshot from the Apple Store for that product:

We see the Watch becoming a runaway success as people learn to use that wearable device as a standalone product — leaving the phone at home on runs, meetings, swims, hikes, and whatever other times such a convenience could be desired.

Conclusion
We maintain our Top Pick status on Apple, but have certainly tempered our bullishness with an undeniable new risk. It might work out very well, but, it might not, and that is a new risk to Apple stock.

The author is long shares of Apple Inc (NASDAQ:AAPL).

Thanks for reading, friends.

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Disclosure: I am/we are long AAPL.

Tech

Uber stripped of its license to operate in London

LONDON (Reuters) – London’s transport regulator on Friday stripped Uber [UBER.UL] of its license to operate from the end of the month, affecting over 40,000 drivers in a huge blow to the taxi app.

“Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications,” Transport for London (TfL) said.

The final day of Uber’s license will be on Sep. 30.

Uber, which has the right to appeal the decision within 21 days, did not offer an immediate comment. It is unclear whether Uber will be able to operate in October whilst any appeal is being considered.

In London, Uber has faced criticism from unions, lawmakers and traditional black cab drivers over working conditions.

Globally, Uber has endured a tumultuous few months after a string of scandals involving allegations of sexism and bullying at the company, leading to investor pressure which forced out former CEO and co-founder Travis Kalanick.

The app has been forced to quit several countries including Denmark and Hungary and faced regulatory battles in multiple U.S. states and countries around the world.

London Mayor Sadiq Khan said he backed the decision.

“All companies in London must play by the rules and adhere to the high standards we expect – particularly when it comes to the safety of customers,” he said.

“It would be wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security.”

Editing by Guy Faulconbridge

Our Standards:The Thomson Reuters Trust Principles.

Tech

HPE plans 5,000 job cuts: Bloomberg

(Reuters) – Hewlett Packard Enterprise Co is planning to cut at least 5,000 workers as part of a broader effort to reduce costs amid mounting competition, Bloomberg reported on Thursday, citing people familiar with the matter.

The reductions of about 10 percent of the company’s total workforce of 50,000 are expected to start before the end of the year, Bloomberg reported. (bloom.bg/2xiAgYx)

The cuts are likely to affect workers in the United States and abroad, including managers, Bloomberg added.

The company could not immediately be reached for comment.

Reporting by Ismail Shakil in Bengaluru; Editing by Jonathan Oatis

Our Standards:The Thomson Reuters Trust Principles.

Tech

Cern calls on industry to collaborate on its datacentre challenges

Cern, home of the Large Hadron Collider (LHC), has identified 16 IT challenges that it wants to work with the IT industry to overcome.

In a whitepaper describing its challenges, Cern Openlab, the facility’s public-private partnership, has categorised the 16 issues into four main areas.

Cern’s datacentre houses about 10,000 dual-core CPU servers with 300,000 processor cores. It also runs a datacentre site in Budapest, connected to Cern over a 100Gbps link. The Budapest site runs 3,500 dual-processor servers.

In the whitepaper, Cern notes: “A weakness in the architecture of many of today’s datacentres is that they cannot easily accommodate rapid variations of cycles and workloads.”

It said that if it decided to build a new datacentre, it would aim for a power usage efficiency (PUE) of 1.1 with 15-20kW per server rack. The electrical consumption of this centre would need to grow from 4MW to 12-16MW and would need to support a heterogenous IT environment. The whitepaper describes how rack disaggregation could help it to allocate the correct amount of computing and storage resources.

It identified software-defined infrastructure as one of the technologies new datacentres could be based on.

Networking is another aspect of datacentre technology that Cern wants industry collaboration on. The whitepaper states: “Globalisation of science means that research centres are becoming community hubs for worldwide collaboration. Modern big science requires continuing developments to be made in nearly all aspect of networking. Rapid developments in networking speeds will enable datacentres to become more interconnected.”

The third datacentre technology for which Cern is seeking industry collaboration is its database requirements. It said: “Databases for the LHC, the experiments and the associated workloads require real-time and batch ingestion at high rates of throughput.”

It identified stream processing, cloud resources, machine learning and scale-out databases as among the areas that could be investigated. It has also looked at NVRam (non-volatile memory), which could be used to run in-memory databases and analytics workloads.

The final piece of Cern’s datacentre requirements concerns cloud infrastructure and the use of OpenStack. In the whitepaper, it said: “There are ongoing investigations into simplifying the user experience by providing virtual machines, containers and bare metal nodes via the same user interface and administrative systems.”

Tech

Twitter Meeting With Senate Intelligence Committee Investigating Russia’s Involvement in 2016 Election

Twitter representatives will meet with the U.S. Senate Select Committee on Intelligence staff next week in relation to inquiries into the 2016 U.S. presidential election, a company representative said.

The committee, along with other congressional committees and special counsel Robert Mueller, is investigating possible links between President Donald Trump’s campaign and Russia.

Twitter’s (twtr) meeting with the committee comes amid mounting pressure on regulators and Silicon Valley companies to open up the opaque world of online political ads and to prevent governments from using them to sway elections or attempt other meddling.

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Facebook (fb) said earlier this month that a Russia-based operation spent $ 100,000 on thousands of ads on its social media platform promoting “divisive” messages before and after last year’s presidential election.

After Facebook’s revelations, Democrats have urged the Federal Election Commission to require transparency for social media advertising.

Russia continues to deny meddling in the election, in which Republican Donald Trump defeated Democrat Hillary Clinton.

Tech

Bosch partners with startup Nikola on electric long-haul truck

DETROIT (Reuters) – Bosch, the German auto components supplier, is partnering with startup Nikola Motor Co to bring two hydrogen-electric, long-haul, heavy-duty truck models to market by 2021, the companies said on Tuesday.

The market for electric medium- and heavy-duty trucks is in its infancy, but has drawn a growing crowd of competitors.

Manufacturers such as Daimler and Navistar International Corp, as well as electric car maker Tesla Inc and a host of other new entrants, are racing to overcome the challenges of substituting batteries for diesel engines as regulators crack down on carbon dioxide and soot pollution.

Bosch and Nikola will jointly develop a powertrain, which transmits drive from the engine of a vehicle to its axle, using Bosch’s eAxle technology. Bosch, which had 73.1 billion euros ($ 87 billion) in sales in 2016, has been shifting away from traditional combustion engine technologies to zero-emission vehicles.

The vehicle uses a hydrogen fuel cell to power the electric motor. Hydrogen fuel cells are easier and quicker to charge than batteries and have a longer range.

The Nikola One and Nikola Two models are both supposed to have a range of between 800 miles to 1,200 miles, an electric powertrain and zero emissions.

Bosch and Salt Lake City-based Nikola said the eAxle system will be paired with a jointly developed “custom-designed fuel cell system,” and hope the powertrain will achieve “segment-leading performance at a competitive total cost of ownership.”

High battery costs are a significant hurdle to mass adoption of electric vehicles as they limit vehicle range and size. Industry executives like Navistar Chief Executive Officer Troy Clarke say that in the short term, electric package delivery vehicles in urban areas with short, predictable routes will be the main area for competition until battery prices come down.

Last week Daimler said United Parcel Service Inc will be the first U.S. commercial customer for its new battery-powered eCanter package delivery truck. The company hopes to expand electric truck production as lower-cost, longer-range batteries become available within two to three years.

Tesla CEO Elon Musk tweeted last week that the Silicon Valley company would show off a prototype of an electric semi-trailer truck on Oct. 26.

Reuters reported last month that Tesla’s semi is expected to offer a range of 200 miles to 300 miles, far less than the 1,000 miles for some diesel-powered counterparts that U.S. long-haul truckers use.

Editing by Jeffrey Benkoe

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Tech