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Google's "Superhero" Glass 2.0

Tuesday, May 21, 2019 by Robinhood Snacks | Disclosures

"I see through walls and set my alarm with these things"

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Hey Snackers,

"A" for creativity. Office IM'ing software Slack just pulled a switcheroo on its future stock's ticker symbol before going public — from "SK" to "WORK."

Markets started the week with a loss, dragged down by little computer chips (more below).

Unveil
1. Google whips out $999 "superpower" smartglasses

Smile... You're being filmed by the smartglasses on the early-adopting human staring at you. Google is graduating its Google Glass from experiment to official Google product as the $999 Glass Enterprise Edition 2. They're like smartwatches. But for your eyes. And they're packed with buzzwords:

  • Fancy optics: The lenses are by Smith, the brand behind your ski goggles.
  • Augmented & virtual reality: They're designed with new chips to handle both.
  • Easy apping: Using Google's Android operating system makes it easier for developers to pop out new glass apps (picture potential "blink to pay" features).

Universally hated... The original Google Glass arrived in 2013. It was swiftly panned for violating the privacy of everyone in eyesight. But this new version isn't for you. It's for business:

  • Google retargeted the specs to be worn by factory workers and surgeons. Support and data on the job = higher productivity and fewer mistakes.
  • The value prop, in one sentence: This gives workers "superpowers"
THE TAKEAWAY

Pivot — Don't kill it... Glass originated in Google's X-department, aka "The Moonshot Factory" where they "create radical new technologies to solve some of the world's hardest problems." And instead of shelving version 1.0 of Google Glass, the team found a new customer segment to target.

Banned
2. US chip companies just lost their #2 customer

Huawei drama: part deux... Last week we told you about the executive order blacklisting Chinese telecom company Huawei — we focused on companies that buy from Huawei (aka wireless phone icons like Verizon). On Monday, stocks of companies that sell to Huawei dropped because orders from Huawei are over.

Chip and dip... "Semiconductor" is the technical term for smartphone engines. NVIDIA, Advanced Micro Devices, Qualcomm, Intel, and other American tech leaders power Apple, Samsung, and Huawei smartphones.

  • Going global: As developing countries started adopting smartphones, chip sales surged. Nvidia and AMD shares increased by 10 times from 2016 to 2018.
  • The trade war: Orders from China's 1.5B swipe-hungry consumers are frozen thanks to this cold-ish trade war.
  • Insult to injury: China expected this, so it stockpiled at least 3-months-worth of chips. So China's lack of orders will be particularly noticeable since previous orders were packed with extras.
THE TAKEAWAY

Customer #2 is gone... Samsung's been the world-leading smartphone company (Apple is usually runner-up). But Huawei's cheaper-but-still-iPhone-ish phones now make up 19% of all smartphones sold. This executive order hurts China, but semiconductor stocks take it personally, too.

Breaking: Trump is planning a 90-day pause on the banning on worries it could hurt US jobs.

Decide
3. Sprint shares halted on merger mixed messages

Black tie or boho chic. DJ or Band. Vows or no vows... Sprint and T-Mobile aren't having typical pre-wedding pillow talk. They're still trying to convince the government to bless the nuptials. Then two surprise developments Monday messed with both stocks in the $26B merger:

  • First, the chairman of the Federal Communications Commission said he was on board for the deal, popping T-Mobile up 6% and Sprint up 27%.
  • Then Bloomberg reported that the Dep't of Justice still isn't feeling it, cutting both stocks' gains in half on the uncertainty (Sprint trading had to be halted).
  • Quick clarification: The Justice Dep't gets final say since its role is to protect consumers from a lack of competition.

T-Mobile knows this looks bad... The #3 and #4 biggest companies in an industry aren't typically allowed to merge. So here's what T-Mobile/Sprint promised the FCC if it's approved.

  1. No price hikes for 3 years (pinky swear).
  2. It'll build out 5G coverage for 97% of the US population, into areas telecom companies usually ignore.
  3. It can sell off Boost Mobile, its prepaid wireless service, so there's still a 4th competitor.
THE TAKEAWAY

With fewer competitors, consumers tend to lose... Competition among providers is key so that you don't get ripped off. That's why the Justice Dep't blocked AT&T's attempt to buy T-Mobile in 2011. And while T-Mobile promised to not take advantage of its increased power for three years... what about years 4? And 5? And forever?

What else we’re Snackin’
  • Self-Serve: Bud-owner AB InBev quietly launches its own in-house creative agency: "Draftline"
  • Veg: Little Caesars is testing out a plant-based "Impossible pizza" with Impossible Foods
  • Snuffed: NJOY wanted to raise enough money to hit a $5B valuation — But the e-cig maker could only reach $2B
  • Slashed: Ford is cutting 7K jobs as it transitions from Trucks + Cars to Trucks + "mobility"
  • Also Slashed: Tesla stock falls to its lowest level since 2016 after an analyst slams CEO Elon's "sci-fi projects"
Snacks Daily Podcast

Today's 15-minute Snacks Daily pod:

  • "Unicorn of the Day": Canva, the better-looking PowerPoint, just raised $70M — Now the graphic design company is backed by VC legend Mary Meeker
Tuesday

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