MEF BUSINESS NEWS 26 APRIL 2024 The yen continued its decline, hitting a fresh 34-year low against the dollar after the Bank of Japan maintained its key interest rate. Concerns about potential intervention by authorities are rising, especially with the release of data on the Federal Reserve’s preferred inflation gauge today. The figures may indicate that the US economy is strong and inflation remains high, reinforcing the dollar against the other main currencies. ————— Meanwhile, Department of Commerce data showed yesterday that in the first quarter the US economy had strong job market and consumer spending, but inflation remained high. GDP growth slowed to 1.6%, down from 3.4% in Q4 2023, largely due to inventory and trade fluctuations. ——————— And a weaker yen supported Japanese equities. In general, Asian technology shares rose following stellar earnings reports from Microsoft Corp. and Alphabet overnight. A gauge of the region’s equities headed for its best week since November, helped by gains in tech giants including Samsung Electronics, Taiwan Semiconductor Manufacturing and Tencent Holdings. Benchmarks in Japan, South Korea, Taiwan and China all advanced. ——————- Alphabet’s first-quarter revenue surged 15% to $80.5 billion, exceeding analysts’ expectations. Earnings per share rose to $1.89, surpassing the estimated $1.53. In response, Alphabet announced its first-ever dividend of 20 cents per share and a $70 billion stock buyback. Shares soared up to 13% in after-hours trading, potentially pushing Alphabet’s market capitalization above $2 trillion. CEO Sundar Pichai highlighted the strong performance of Search, YouTube, and Cloud, emphasizing Alphabet’s leadership in AI research and infrastructure. The dividend marks a shift for the tech giant, which previously relied solely on share buybacks, reflecting a trend among US tech companies to provide greater returns to shareholders. ———- Microsoft’s cloud sales surpassed analysts’ forecasts, fueled by demand for artificial intelligence (AI). The company faces challenges in meeting AI demand due to capacity constraints. Increased spending on infrastructure is planned to address this. Microsoft’s strategic investments in AI are yielding positive results. The company’s cloud division revenue rose by 21%, with Azure revenue up by 31%. Sales growth driven by AI services is accelerating. Revenue and earnings exceeded expectations. ————— Southwest Airlines is scaling back operations at certain airports and implementing cost-cutting measures due to disappointing earnings and delays in receiving new Boeing planes. The airline now anticipates receiving only 20 new Boeing aircraft this year, significantly fewer than previously expected. Delays in regulatory approval for a smaller version of the Boeing 737 MAX further compound Southwest’s growth challenges for the year, leading to reduced revenue, excess staffing, and increased costs. —— —— MEF MOBILE NEWS 26 APRIL 2024 T-Mobile US exceeded profit expectations but experienced slowed growth in its wireless high-speed internet segment. Despite reporting earnings per share of $2 compared to an anticipated $1.89, revenue of nearly $19.6 billion fell short of the predicted $19.8 billion. Intense competition in a saturated market, particularly from cable providers offering bundled phone services, has tempered growth expectations. While T-Mobile added 532,000 wireless phone subscribers, surpassing predictions of 479,800, it added fewer fixed wireless customers than in the previous quarter. Anyway, T-Mobile’s strategy of leveraging its 5G advantage, expanding coverage to rural areas, and offering wireless internet in underserved regions has fueled its faster growth compared to competitors like Verizon and AT&T. ———- Meanwhile, T-Mobile announced a deal for fiber-to-the-home platform Lumos in a joint venture with investment firm EQT AB, and it won US approval to buy budget mobile service provider Mint Mobile. ——— Telia’s new CEO, Patrik Hofbauer, outlined in an investors’ call mid-term plans to simplify operations and accelerate decision-making to drive future growth. Despite a 2% dip in revenue to 21.3 billion krona in Q1 2024, Hofbauer expressed confidence in the full-year outlook, expecting stronger cash flow generation in the second half of the year. The decline in revenue was primarily attributed to a drop in advertising sales, offset by growth in telecom operations and a turnaround in the TV and Media division. Service revenue increased by 1.5%, with telco operations specifically growing by 2.7%. Total net income rose to 757 million krona, supported by the recent sale of its Denmark business. ——— The Federal Communications Commission ordered the U.S. units of Chinese telecom firms China Telecom, China Unicom, and China Mobile, along with Pacific Networks and its subsidiary ComNet, to halt fixed or mobile broadband internet operations in the U.S. within 60 days. This decision, part of a net neutrality order, follows national security concerns previously raised by the FCC regarding Chinese telecom providers offering services in the U.S. ———— Nokia achieved a significant milestone by completing the first data call using the B106 standardization, a part of the standard 3GPP Rel-18. Collaborating with Anterix, Nokia conducted the call at its facility in the US. The move is expected to expand the device ecosystem, particularly benefiting utilities. S —— ——— MEF TECH NEWS 26 APRIL 2024 Huawei’s latest smartphones, the Pura 70 series, feature the Kirin 9010 processor, according to analysis by TechInsights. This chip, a newer version of the Kirin 9000s, demonstrates Huawei’s ability to sustain production of advanced processors despite US export curbs. The Mate 60 Pro, which also used the Kirin 9000s, drew attention from US officials due to concerns about China’s semiconductor capabilities. Despite challenges, Huawei has experienced a resurgence, with the Pura 70 series selling out within two days of its launch. US officials are considering additional sanctions to address Huawei and China’s semiconductor ambitions. ————— The Federal Trade Commission alleged that top Amazon executives, including founder Jeff Bezos and CEO Andy Jassy, destroyed text messages discussing business using the encrypted platform Signal, erasing potential evidence for the agency’s antitrust case against the company. Other executives named in the allegations include David Zapolsky, Jeff Wilke, and Dave Clark. Amazon denies the allegations, stating that it voluntarily disclosed Signal usage to the FTC and allowed the agency to inspect conversations. The FTC’s court filing seeks information on Amazon executives’ instructions regarding communication via Signal and message retention. The agency claims that executives’ use of disappearing messages interfered with its ability to investigate potential antitrust violations. This incident parallels accusations against Google for failing to retain internal communications amid multiple investigations. ————— Elon Musk’s AI startup X.AI Corp. is close to securing a funding round of $6 billion, valuing the company at $18 billion, Bloomberg reports. Sequoia Capital and other investors are expected to participate in the deal. X.AI aims to compete with major AI players like OpenAI, despite Musk’s past involvement with the latter. ————— Meituan is planning to introduce its international food-delivery platform, KeeTa, in Riyadh, Saudi Arabia, marking its first expansion outside of greater China, Bloomberg reports citing people familiar with the matter. The move reflects a broader trend of Chinese companies seeking growth abroad amid increasing competition and slowing consumption domestically. Meituan’s entry into Riyadh will bring it into competition with local players such as Jahez, Talabat, HungerStation, and Careem. This expansion aligns with Saudi Arabia’s ambitions to become a leading tourism and commercial destination, as it aims to attract significant investment. —————- ——- ——-
MEF BUSINESS NEWS 26 APRIL 2024 The yen continued its decline, hitting a fresh 34-year low against the dollar after the Bank of Japan maintained its key interest rate. Concerns about potential intervention by authorities are rising, especially with the release of data on the Federal Reserve’s preferred inflation gauge today. The figures may indicate that the US economy is strong and inflation remains high, reinforcing the dollar against the other main currencies. ————— Meanwhile, Department of Commerce data showed yesterday that in the first quarter the US economy had strong job market and consumer spending, but inflation remained high. GDP growth slowed to 1.6%, down from 3.4% in Q4 2023, largely due to inventory and trade fluctuations. ——————— And a weaker yen supported Japanese equities. In general, Asian technology shares rose following stellar earnings reports from Microsoft Corp. and Alphabet overnight. A gauge of the region’s equities headed for its best week since November, helped by gains in tech giants including Samsung Electronics, Taiwan Semiconductor Manufacturing and Tencent Holdings. Benchmarks in Japan, South Korea, Taiwan and China all advanced. ——————- Alphabet’s first-quarter revenue surged 15% to $80.5 billion, exceeding analysts’ expectations. Earnings per share rose to $1.89, surpassing the estimated $1.53. In response, Alphabet announced its first-ever dividend of 20 cents per share and a $70 billion stock buyback. Shares soared up to 13% in after-hours trading, potentially pushing Alphabet’s market capitalization above $2 trillion. CEO Sundar Pichai highlighted the strong performance of Search, YouTube, and Cloud, emphasizing Alphabet’s leadership in AI research and infrastructure. The dividend marks a shift for the tech giant, which previously relied solely on share buybacks, reflecting a trend among US tech companies to provide greater returns to shareholders. ———- Microsoft’s cloud sales surpassed analysts’ forecasts, fueled by demand for artificial intelligence (AI). The company faces challenges in meeting AI demand due to capacity constraints. Increased spending on infrastructure is planned to address this. Microsoft’s strategic investments in AI are yielding positive results. The company’s cloud division revenue rose by 21%, with Azure revenue up by 31%. Sales growth driven by AI services is accelerating. Revenue and earnings exceeded expectations. ————— Southwest Airlines is scaling back operations at certain airports and implementing cost-cutting measures due to disappointing earnings and delays in receiving new Boeing planes. The airline now anticipates receiving only 20 new Boeing aircraft this year, significantly fewer than previously expected. Delays in regulatory approval for a smaller version of the Boeing 737 MAX further compound Southwest’s growth challenges for the year, leading to reduced revenue, excess staffing, and increased costs. —— —— MEF MOBILE NEWS 26 APRIL 2024 T-Mobile US exceeded profit expectations but experienced slowed growth in its wireless high-speed internet segment. Despite reporting earnings per share of $2 compared to an anticipated $1.89, revenue of nearly $19.6 billion fell short of the predicted $19.8 billion. Intense competition in a saturated market, particularly from cable providers offering bundled phone services, has tempered growth expectations. While T-Mobile added 532,000 wireless phone subscribers, surpassing predictions of 479,800, it added fewer fixed wireless customers than in the previous quarter. Anyway, T-Mobile’s strategy of leveraging its 5G advantage, expanding coverage to rural areas, and offering wireless internet in underserved regions has fueled its faster growth compared to competitors like Verizon and AT&T. ———- Meanwhile, T-Mobile announced a deal for fiber-to-the-home platform Lumos in a joint venture with investment firm EQT AB, and it won US approval to buy budget mobile service provider Mint Mobile. ——— Telia’s new CEO, Patrik Hofbauer, outlined in an investors’ call mid-term plans to simplify operations and accelerate decision-making to drive future growth. Despite a 2% dip in revenue to 21.3 billion krona in Q1 2024, Hofbauer expressed confidence in the full-year outlook, expecting stronger cash flow generation in the second half of the year. The decline in revenue was primarily attributed to a drop in advertising sales, offset by growth in telecom operations and a turnaround in the TV and Media division. Service revenue increased by 1.5%, with telco operations specifically growing by 2.7%. Total net income rose to 757 million krona, supported by the recent sale of its Denmark business. ——— The Federal Communications Commission ordered the U.S. units of Chinese telecom firms China Telecom, China Unicom, and China Mobile, along with Pacific Networks and its subsidiary ComNet, to halt fixed or mobile broadband internet operations in the U.S. within 60 days. This decision, part of a net neutrality order, follows national security concerns previously raised by the FCC regarding Chinese telecom providers offering services in the U.S. ———— Nokia achieved a significant milestone by completing the first data call using the B106 standardization, a part of the standard 3GPP Rel-18. Collaborating with Anterix, Nokia conducted the call at its facility in the US. The move is expected to expand the device ecosystem, particularly benefiting utilities. S —— ——— MEF TECH NEWS 26 APRIL 2024 Huawei’s latest smartphones, the Pura 70 series, feature the Kirin 9010 processor, according to analysis by TechInsights. This chip, a newer version of the Kirin 9000s, demonstrates Huawei’s ability to sustain production of advanced processors despite US export curbs. The Mate 60 Pro, which also used the Kirin 9000s, drew attention from US officials due to concerns about China’s semiconductor capabilities. Despite challenges, Huawei has experienced a resurgence, with the Pura 70 series selling out within two days of its launch. US officials are considering additional sanctions to address Huawei and China’s semiconductor ambitions. ————— The Federal Trade Commission alleged that top Amazon executives, including founder Jeff Bezos and CEO Andy Jassy, destroyed text messages discussing business using the encrypted platform Signal, erasing potential evidence for the agency’s antitrust case against the company. Other executives named in the allegations include David Zapolsky, Jeff Wilke, and Dave Clark. Amazon denies the allegations, stating that it voluntarily disclosed Signal usage to the FTC and allowed the agency to inspect conversations. The FTC’s court filing seeks information on Amazon executives’ instructions regarding communication via Signal and message retention. The agency claims that executives’ use of disappearing messages interfered with its ability to investigate potential antitrust violations. This incident parallels accusations against Google for failing to retain internal communications amid multiple investigations. ————— Elon Musk’s AI startup X.AI Corp. is close to securing a funding round of $6 billion, valuing the company at $18 billion, Bloomberg reports. Sequoia Capital and other investors are expected to participate in the deal. X.AI aims to compete with major AI players like OpenAI, despite Musk’s past involvement with the latter. ————— Meituan is planning to introduce its international food-delivery platform, KeeTa, in Riyadh, Saudi Arabia, marking its first expansion outside of greater China, Bloomberg reports citing people familiar with the matter. The move reflects a broader trend of Chinese companies seeking growth abroad amid increasing competition and slowing consumption domestically. Meituan’s entry into Riyadh will bring it into competition with local players such as Jahez, Talabat, HungerStation, and Careem. This expansion aligns with Saudi Arabia’s ambitions to become a leading tourism and commercial destination, as it aims to attract significant investment. —————- ——- ——-
