Monday Jan.06, 2020

Snapchat dominates AR. Period.

_Snapchat: Going for best "Cameo" in a leading role_

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Snack more. It's our simple resolution for the decade — here's how you can too:

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FYI, stock dipped in the 1st week of 2020 because conflict between the US and Iran could disrupt oil markets — and when you mess with oil, you mess with business.

Augment

Snapchat's New Year's Resolution: (A)ugment your (R)eality with fun shenanigans

Cat videos would be better... if your face replaced the feline's. That's the earth-shattering revelation behind "Cameos," Snapchat's new feature that superimposes your selfie in a short video. It's the type of viral animation that's core to Snapchat's DNA, so Snap acquired the startup behind Cameos, AI Factory, for a reported $166M last week.

Location: Uncreatively-named AI Factory is based in Ukraine, with an office in San Francisco to convince those who judge books by their covers.
Not his first exit: Its founder is Victor Shaburov — who already sold a previous startup to Snap in 2015 (he's the tech artist behind virtual rainbow vomiting).
Not dangerous (yet): Making a video of one person appear as another is the definition of "Deepfake" (it's a freaky futuristic technology that could potentially cause mahyem on what you think is true). But we tried Snap's Cameos — they're shallowfakes at best.

Cameo > Lenses > Bitmoji... In a leaked 2018 letter to Snappers, CEO Evan Spiegal said 27 times that Snapchat should be "the fastest way to communicate." To accomplish that, text on Snapchat is laughable. Pictures are ok. Videos are better. So Bitmoji (also acquired by Snap), Lenses, and Cameos separate Snap from Instagram, iMessage, and Twitter ('til Insta steals the idea).

Snap is the leader in Augmented Reality. Period... Tech leaders believe AR will replace smartphones, just like smartphones replaced many PCs. Facebook, Apple, and Google are all building headsets and glasses so they don't miss it. Before you strap a computer to your face, Snap's way ahead:

Those tech giants haven't offered mainstream products yet — and Facebook's chief scientist thinks it'll be 5-10 years before they do.
Snap has. Its filters, lenses, and Spectacles take your real world, then augment it with humanity-improving dancing hotdogs.

Highs

Who's up...

Can we please talk about Apple's record high?... The stock doubled to become 2019's best performer in the Dow. Now Apple's got a new 2020 focus: Make HomeKit happen. That's the orange house-shaped, pre-downloaded app in your "rando Apple apps" folder — it connects your iPhone with your home (smart lights, smart thermostat, etc). At this week's Consumer Electronics Show, Apple is sharing its plans for HomeKit to make money off iPhone nation.

FIFA 2019. Pokemon. Call of Duty... All lost to Fortnite. The 3-year-old game hauled in $1.8B last year to keep its crown as Earth's most lucrative video game (FYI, that's down 25% from 2018). Credit its popularity as a virtual hangout place, and add in some seasonal changes for keeping the game fresh. Fortnite's parent company, Epic Games, isn't publicly-traded — but its biggest investor is China's game-glomerate Tencent, whose shares trade publicly.

Lows

...And who's down

Ever wanted to charge Uber surge pricing?... That's kinda what California is doing. The AB5 "gig law" would treat drivers like actual employees, not independent contractors — that could raise the ride-hailer's costs by 30%. So Uber and Postmates sued California because they feel singled-out as an industry (their words: AB5 is "irrational and unconstitutional"). The law took effect on January 1st, so Uber's pulling an Uber and won't comply while it fights.

Pump anxiety... Airlines are feeling it. Fresh after the US killed Iran's top general, oil prices immediately jumped 4% to $68.60 (Middle East oil trade is a fragile thing). US airline stocks immediately fell, led down by American Airlines — that fuel makes up about 24% of their total costs. Good thing the growing US economy just landed airlines' their 10th-straight profitable year.

What else we’re Snackin’

Sold: How 2019 was the year of the wireless headphone
Work: Resumé trend of 2020: Add your "high scores"
Venture: 10 (little) tweaks that'll make big-time changes to your pitch deck (keep size 12 font in your college essays)
List: 9 apps to help you be more organized in 2020
Crypto: The IRS' new 2019 tax form is out and they want to know about your crypto moves

This Week

Monday: Congress returns from holiday break
Tuesday: The Consumer Electronics Show (CES) kicks off in Las Vegas
Wednesday: Earnings from Bed Bath & Beyond, Walgreens, RPM
Thursday: Earnings from WD-40, KB Home
Friday: The official government Jobs Report for December

Disclosure: Authors of this Snacks own shares of Apple

ID: 1049181

Latest Stories

Rani Molla

40m

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

Apple reportedly cuts Vision Pro production due to low demand

Seriously, relax

Economy keeps on humming along

Meta exhaustingly tries to merge the metaverse and AI

Gonna have to rename the company... again

Rani Molla3h

Chris Black

Black’s Gold

Can you justify a $335 trashcan? Yes.

Here’s how.

Biden signs a bill that could ban TikTok — but the #ForYou fight is far from over

Jamie Wilde

Read

Gucci’s parent braces for sliding sales, as luxury demand unravels over high prices

Nia Warfield

Read

Matt Phillips

19h

Chipotle continues to go on a tear, hitting a sales record

Hey it might not be the kind of AI stock investors are all hot and bothered over, but don’t sleep on the burrito business.

Chipotle posted much better-than-expected results on Wednesday, with sales rising 14% to a record $2.70B in the first quarter, which is like a billion additions of guac.

Profits jumped 23% to $359M.

Chipotle has quietly cruised higher over the last year. It’s up 63%, compared to the 24.5% gain for the S&P 500 over the 12 months through Wednesday’s close. Not bad for a rice-and-beans based business model.

Rani Molla

20h

Facebook had great earnings, the market hates it

Facebook reported impressive earnings. Record first-quarter revenue thanks to AI! Profit up 117% compared to a year earlier! But at the same time, its capital expenditures are going up and it’s expecting second quarter revenue potentially lower than analyst estimates. So in other words, the future doesn’t look as bright as the present.

All in all the stock is down more than 10%. (Basically the opposite of what happened with Tesla yesterday).

Net net

22h

Earnings can’t stop, won’t stop

Rani Molla

4/24/24

Why Tesla investors are holding on to hope for a cheap car

Despite terrible earnings numbers last night — declining vehicle sales, disappointing revenue and profit, enormous spending — Tesla stock is up more than 10% as of midday. That’s a welcome move for the car company, that’s been among the worst performers this year in the S&P 500.

Why the about face?

While Reuters reported earlier this month that Tesla is no longer making its long-awaited $25,000 mass-market car — news sent the stock, already suffering from headwinds across the EV industry, down even further— Tesla reported during its earnings that it’s going to make cheaper cars than it currently has.

Before the second half of next year, Tesla said it will release “more affordable models” that “will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

So rather than release the $25,000 Model 2, Tesla is incorporating some of that technology into its existing models. UBS called it the Franken-3Y2.

Spotify’s finally turning its user growth into serious cash flow

Tom Jones, David Crowther4/24/24

The FTC is banning non-compete clauses

Why that might make job switching even more lucrative

Millie Giles, David Crowther4/24/24

Matt Phillips

4/24/24

Hasbro pretty much entirely depends on Magic: The Gathering to make a profit

William Coulman, David Crowther

4/24/24

Thousands of bank branches have closed across America

America has lost thousands of bank branches. The latest closure? JPMorgan’s iconic 45 Wall St. address.

4/24/24

TikTok versus the United States

Casey Newton

Senate Takes Up Foreign Aid Package Passed By House

William Coulman & David Crowther

4/24/24

Not so Gucci

French luxury fashion conglomerate Kering has seen its shares fall ~10% in the last 24 hours after reporting that sales at its flagship brand Gucci had dropped 21% in its latest quarter.

Kering’s other brands, which include Yves Saint Laurent, Bottega Veneta, and Balenciaga, fared slightly better — but the only real bright spot was the company’s eyewear division, where sales rose 24% (9% on a comparable basis).

With Gucci responsible for roughly two-thirds of the company’s profit, the ongoing struggles of the brand are weighing heavily on the bottom line: the company expects recurring operating profit to drop 40-45% in the first six months of the year.

Gucci execs will be hoping that new designer Sabato de Sarno can turn the iconic brand’s fortunes around, particularly in China where demand has dropped precipitously. His designs only started hitting stores in February.