WEBVTT - China and Tech and Big Tech Earnings 0:00:03.480 --> 0:00:06.760 From the heart of where innovation, money and power CALLI 0:00:07.600 --> 0:00:12.119 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:12.200 --> 0:00:28.000 Emily Jay. I'm Caroline Hyde in New York in for 0:00:28.080 --> 0:00:30.680 Emily Chang, and this is Bloomberg Technology coming up in 0:00:30.680 --> 0:00:33.760 the next hour. Jumping's power grabs over in Beijing, but 0:00:33.760 --> 0:00:36.239 it led to a historic route in tech stox globally, 0:00:36.400 --> 0:00:38.400 equities had their worst day in Hong Kong, for example, 0:00:38.440 --> 0:00:41.840 since two thousand and eight financial crisis. How will tech 0:00:41.960 --> 0:00:46.519 navigate this new era? Plus a huge earnings week? Alphabet, Amazon, Apple, 0:00:46.640 --> 0:00:49.360 matter to name, but a few will break down what 0:00:49.479 --> 0:00:53.840 to expect and after Washington's moved to reclassify gig workers, 0:00:53.880 --> 0:00:57.200 what happens to Uber to Go Pass. Of course, the 0:00:57.200 --> 0:00:59.760 Silicon Valley, we dive into the fifteen billion dollar delivery 0:01:00.040 --> 0:01:03.240 arcket that's on the brink. We'll get into all of 0:01:03.240 --> 0:01:05.120 those stories in a moment, but first let's get you 0:01:05.200 --> 0:01:08.080 up to speed with the relationship going forward between US 0:01:08.240 --> 0:01:10.039 China what it means to some of those companies that 0:01:10.080 --> 0:01:12.160 try to cross that rubicon. Let's talk about it all 0:01:12.200 --> 0:01:14.760 now on the impact of the changes in China and 0:01:14.800 --> 0:01:17.040 particularly let's look at the chip sector, and with one 0:01:17.080 --> 0:01:19.880 at Debbie Wu Broomberg's who's usually based in Taipei. We 0:01:19.920 --> 0:01:22.240 are so thankful that's just right now in the United 0:01:22.319 --> 0:01:24.920 States and your expertise here, Debbie, at this moment with 0:01:25.200 --> 0:01:28.320 companies such as TSMC trying to navigate this new world 0:01:28.440 --> 0:01:31.680 order of the relationship that is disintegrating between China and 0:01:31.720 --> 0:01:35.520 the United States, and and an international investor that worries 0:01:35.800 --> 0:01:38.920 what on earth this new consolidation of power means for 0:01:39.000 --> 0:01:41.240 companies trying to work their way around just talk us, 0:01:41.240 --> 0:01:43.880 for example, through your breaking news story you had over 0:01:43.880 --> 0:01:47.160 the weekend of what TSMC is trying to do. So 0:01:48.080 --> 0:01:51.120 we have seen that needs said that for US export 0:01:51.120 --> 0:01:54.840 control rules have impact not just on American firms but 0:01:54.920 --> 0:01:59.920 also well foreign companies that have business relationship with China's 0:02:00.040 --> 0:02:03.520 of what we reported over the weekend is that t 0:02:03.720 --> 0:02:07.200 s m C has stopped production for this Chinese AI chip. 0:02:07.280 --> 0:02:12.359 Stop bearing because based on public domain information that Bearings 0:02:12.400 --> 0:02:16.560 products actually outperform and medias A one hundred chips which 0:02:16.560 --> 0:02:19.560 is now banned for the Chinese market. So it's really 0:02:19.600 --> 0:02:23.080 interesting to see that the foreign companies now I also 0:02:23.160 --> 0:02:26.720 have to follow the US rules like they did back 0:02:26.919 --> 0:02:30.520 a couple of years ago when the US blacklisted Huawei. 0:02:30.840 --> 0:02:33.160 So a lot of companies are kind of their business 0:02:33.160 --> 0:02:37.040 ties with UH Huawei. And then what's happening now is 0:02:37.080 --> 0:02:41.920 also UH companies are sort of tightening China's access to 0:02:42.040 --> 0:02:45.320 layer technologies or their products. And we have seen all 0:02:45.360 --> 0:02:49.919 the Dutch equipment supplier SML also told it's US based 0:02:49.960 --> 0:02:55.119 staff to UH hold their services to Chinese customers due 0:02:55.160 --> 0:02:59.600 to a listen new US regulations restricting US persons from 0:03:00.000 --> 0:03:05.119 open without China's chip industry. Given the news that uphended 0:03:05.160 --> 0:03:08.519 the market, that this consolidation of power in China, that's 0:03:08.600 --> 0:03:12.960 focus on well perhaps moving away from such growth tech names, 0:03:13.000 --> 0:03:14.919 the fact that we saw Ali Baba for so much, 0:03:14.960 --> 0:03:16.640 But what does that mean for the chip sector? Do 0:03:16.639 --> 0:03:21.480 you think, Debbie at the moment, So, following the US 0:03:21.480 --> 0:03:24.840 announcement of this new set of rules, chip stocks have 0:03:25.120 --> 0:03:29.639 plummeted and we have seen the Fildelphia Stock Exchange Semiconductor 0:03:29.720 --> 0:03:32.639 index fallen up more than four the percent this year, 0:03:32.720 --> 0:03:35.119 partly due to of the new curves and partly due 0:03:35.160 --> 0:03:38.880 to the growing head winds in the chip sector. So 0:03:38.960 --> 0:03:41.600 I mean it is going to be quite challenging for 0:03:41.680 --> 0:03:46.920 the chip companies to navigate this UH growing up, weakening 0:03:46.960 --> 0:03:52.560 demand amid high inflat high inflation environment and also potential 0:03:52.640 --> 0:03:56.200 recessions UH and also given the reflections for their business 0:03:56.280 --> 0:03:58.720 in China, I think it's going to be quite challenging. 0:03:58.800 --> 0:04:02.600 So we're here more about this ub with Texas Instruments 0:04:02.600 --> 0:04:06.080 and Intel giving their are earnings and also forecast later 0:04:06.200 --> 0:04:10.720 this week and therefore going forward. Are people starting to 0:04:10.760 --> 0:04:14.280 say to you these negative headwinds, whether it be a 0:04:14.320 --> 0:04:18.880 relationship and more difficult business being done with China, whether 0:04:18.920 --> 0:04:21.080 it's the curbs of the US put in, whether or 0:04:21.120 --> 0:04:24.200 not it's just a slowing fundamental story that's happening in 0:04:24.279 --> 0:04:26.960 terms of where we are in the chip cycle. People 0:04:26.960 --> 0:04:28.880 started to say that this is priced in some way 0:04:29.000 --> 0:04:33.280 or not yet I think it's a really sort of 0:04:33.279 --> 0:04:37.520 like a conversions so for these different sect these elements, 0:04:37.520 --> 0:04:39.880 so it's hard to say that, Okay, so the chip 0:04:40.320 --> 0:04:44.039 chips company, chips companies are taking a bigger here from 0:04:44.520 --> 0:04:47.800 certain things, but it's more like these are UH, different 0:04:48.080 --> 0:04:51.520 elements are putting up growing pressure on the earnings and 0:04:51.600 --> 0:04:55.440 themselves of chip companies around the world. Yeah, we keep 0:04:55.440 --> 0:04:57.160 a close eye on this week. Of course, the Texas 0:04:57.160 --> 0:05:01.120 instruments and Intel w we thank you for your expertise them. Meanwhile, 0:05:01.160 --> 0:05:03.600 turning to some of the changes and the look ahead 0:05:03.600 --> 0:05:06.400 to one key play, Apple's got its earnings, but it 0:05:06.400 --> 0:05:09.000 has some interesting news and who helped write that was 0:05:09.080 --> 0:05:12.880 one Mark? Mark talk to us about, well, the inflation 0:05:12.920 --> 0:05:16.479 that maybe Apple is serving us up at the moment. Yeah, 0:05:16.560 --> 0:05:19.400 So a few Apple services, actually their main ones, all 0:05:19.440 --> 0:05:22.279 got price hikes this morning. So Apple TV Plus that 0:05:22.279 --> 0:05:26.000 we talked about often, Apple Music, and Apple One subscription bundles, 0:05:26.000 --> 0:05:28.760 where TV Plus and Apple Music are obviously at the 0:05:28.839 --> 0:05:32.240 forefront of their streaming packages, right. So Apple Music is 0:05:32.279 --> 0:05:34.600 moving from ten dollars per month in the US to 0:05:34.760 --> 0:05:37.359 eleven dollars per months, so at ten percent price increase, 0:05:37.680 --> 0:05:40.400 Apple TV Plus moving from five dollars a month to 0:05:40.560 --> 0:05:43.159 seven dollars a month, and the Apple One bundles those 0:05:43.200 --> 0:05:46.200 are rising between two and three dollars depending on what 0:05:46.320 --> 0:05:49.240 packages you get, so in the mid teens, up to 0:05:49.320 --> 0:05:51.719 thirty three dollars for that highest end package we can 0:05:51.839 --> 0:05:54.960 get gaming and news and whatnot. Apple saying this has 0:05:55.000 --> 0:05:58.159 to do with higher costs for licensing related to music, 0:05:58.480 --> 0:06:00.960 and then the TV plus front. An Apple TV Plus 0:06:01.040 --> 0:06:05.039 launched in the company correctly says that there were basically 0:06:05.720 --> 0:06:08.400 no shows are very few shows at the get go 0:06:08.839 --> 0:06:12.040 now TV plus has dozens of shows. Still no back catalog, 0:06:12.279 --> 0:06:14.240 but certainly you're getting more bang for your buck now 0:06:14.279 --> 0:06:16.880 than you did before, which means they're now raising those 0:06:16.880 --> 0:06:19.239 prices and we saw the impact. Don't say the stock 0:06:19.240 --> 0:06:22.280 of Spotify w many now preempting they might pass on 0:06:22.360 --> 0:06:24.719 some of their prices to the consumer as well. Talk 0:06:24.760 --> 0:06:27.159 to us about more what we expect from Apple's numbers 0:06:27.200 --> 0:06:30.240 as well out late this week. Of course, most valuable company, 0:06:30.279 --> 0:06:34.200 it's important to us. Yes, So analysts sticking to services 0:06:34.279 --> 0:06:36.520 believe that Apple is going to come in almost to 0:06:36.600 --> 0:06:40.200 twenty billion dollars right. Wouldn't be an all time record, right, 0:06:40.320 --> 0:06:43.039 but would be fairly significant for a fourth quarter. That's 0:06:43.040 --> 0:06:46.919 for services specifically. In terms of overall, we're talking about 0:06:46.960 --> 0:06:50.560 between the mid eighty billions to low ninety billions. Those 0:06:50.560 --> 0:06:53.480 are the estimates I've seen between about five and eight 0:06:53.480 --> 0:06:56.120 percent year of your growth. Now, that growth is not 0:06:56.160 --> 0:06:57.880 going to be as significant as the year of year 0:06:57.920 --> 0:07:00.480 growth you saw a year ago. In the fourth quarter 0:07:01.520 --> 0:07:05.359 that was about year over year growth. Obviously that was 0:07:05.400 --> 0:07:09.200 COVID induced more iPad and Mac purchases, but any growth 0:07:09.240 --> 0:07:12.080 given the current conditions of the economy is a pretty 0:07:12.080 --> 0:07:14.520 good thing for Apple at this point. One major thing 0:07:14.560 --> 0:07:16.880 you can probably attribute to that, however, is the iPhone 0:07:16.920 --> 0:07:19.360 four Team Pro and Pro Max line that you're showing 0:07:19.440 --> 0:07:22.640 right now on TV. Those phones have done especially well 0:07:22.720 --> 0:07:24.640 with some of the new features like the better camera, 0:07:25.040 --> 0:07:28.200 satellite features, the dynamic island in the screen. People have 0:07:28.200 --> 0:07:30.600 been buying those up. And Apple got an extra week 0:07:30.640 --> 0:07:33.320 of sales for that device because they released it one 0:07:33.360 --> 0:07:36.240 week earlier than they historically do for new iPhones. So 0:07:36.280 --> 0:07:37.760 that's where you're going to see the growth from this 0:07:37.840 --> 0:07:40.680 quarter of a seasonality issue. In these endings, we thank 0:07:40.760 --> 0:07:50.560 you Mortgum, and let's talk about some of the dry 0:07:50.600 --> 0:07:53.000 powder that Andrews and Harrow. It's has a lot of 0:07:53.160 --> 0:07:55.920 and it's putting it to work, betting on a key 0:07:55.960 --> 0:07:59.560 platform that's meant to perhaps allow founders in particular to 0:07:59.600 --> 0:08:04.360 access private markets more diversification. The coterie, which let's uses 0:08:04.400 --> 0:08:07.520 invest in funds and include companies like SpaceX or Stripe 0:08:07.760 --> 0:08:10.560 just landed forty million dollars in funding round led by 0:08:10.640 --> 0:08:12.880 A sixty and Z. Here to discuss it is the 0:08:12.920 --> 0:08:16.200 Coachy CEO and co founder Ethan Ago. All Right, we 0:08:16.720 --> 0:08:19.480 wanted a little bit first and foremost remind people of 0:08:19.600 --> 0:08:22.920 your story why the Coachery was born, and it was 0:08:22.960 --> 0:08:25.240 through frustrations that you found as a founder. Right. Yeah, 0:08:25.280 --> 0:08:27.440 So I was the founder of a company called Active 0:08:27.480 --> 0:08:30.360 before this. We were growing. We did about a hundred 0:08:30.360 --> 0:08:32.880 million of revenue, and I turned off my salary and 0:08:32.920 --> 0:08:34.920 I went to apply for a mortgage and the guy 0:08:34.960 --> 0:08:36.840 says to me, we can't give you a mortgage. You 0:08:36.880 --> 0:08:39.439 don't have a salary. And you know, I realized it's 0:08:39.480 --> 0:08:41.880 kind of silly, because most of the people that I 0:08:41.920 --> 0:08:44.079 know make a lot more money from their assets or 0:08:44.120 --> 0:08:46.040 their equity than they do from their salary, probably a 0:08:46.040 --> 0:08:48.000 lot of the people that watch your show. And so 0:08:48.040 --> 0:08:50.959 there's clearly a disconnect that's emerged between the way that 0:08:51.640 --> 0:08:54.760 the legacy financial guys think about risk and think about 0:08:54.840 --> 0:08:57.680 asked allocation and the way that me and everyone that 0:08:57.720 --> 0:08:59.920 I know thinks about it. Because most of us make 0:09:00.080 --> 0:09:03.000 most of our money from carry or equity than we 0:09:03.040 --> 0:09:05.800 do from salary, and so we realize there's an opportunity 0:09:05.840 --> 0:09:09.160 to build financial products targeted towards people who make more 0:09:09.200 --> 0:09:11.920 money from assets than they do from their salary. So 0:09:11.960 --> 0:09:13.920 you're looking at an individual in a different way, at 0:09:13.920 --> 0:09:15.720 their own credit risk. But then you're looking at that 0:09:15.760 --> 0:09:18.960 individual and being like, I know you need diversification in 0:09:18.960 --> 0:09:21.040 your life as well. Well. If you think about a founder, 0:09:21.120 --> 0:09:25.040 most of their wealth is concentrated in one specific, highly 0:09:25.120 --> 0:09:27.960 liquid asset, and anybody will tell you that's not a 0:09:28.000 --> 0:09:30.439 great way to manage your risk. So what we do 0:09:30.520 --> 0:09:32.920 is we provide access to invest in some of the 0:09:32.920 --> 0:09:35.800 best fund managers in the world, like Injuries and Horowitz, 0:09:36.120 --> 0:09:39.600 like Initialized, and it allows a founder to diversify their 0:09:39.679 --> 0:09:43.600 risk away from just their own company. We also provide liquidity. 0:09:43.640 --> 0:09:46.280 We also provide a state planning. We're looking at all 0:09:46.280 --> 0:09:49.160 the different areas that founders need help in and where 0:09:49.160 --> 0:09:52.120 we feel like the banks have dropped the ball, and 0:09:52.160 --> 0:09:55.800 we're building products designed to help founders alleviate some of 0:09:55.840 --> 0:09:58.480 that mental pain that they have to experience when they 0:09:58.480 --> 0:10:01.560 try to deal with the legacy institution. Dare I say, 0:10:01.720 --> 0:10:04.560 at this moment where you're a one is a founder? 0:10:05.520 --> 0:10:09.240 Do they want to be doubling down in still private 0:10:09.280 --> 0:10:13.000 companies given valuations are indeed under pressure. Yeah, so, um, 0:10:13.160 --> 0:10:16.240 it's key that their portfolio, Well, my opinion is that 0:10:16.360 --> 0:10:18.560 their portfolio is not just going to be privates, right, 0:10:18.559 --> 0:10:20.559 They're going to have a four oh one K, they're 0:10:20.600 --> 0:10:23.239 going to have public, They're going to have probably some crypto. 0:10:23.320 --> 0:10:25.600 Our pitch is not that we're trying to provide advice 0:10:25.640 --> 0:10:28.439 as to how you construct your portfolio. Our pitches that 0:10:28.480 --> 0:10:30.720 if you want access to some of the best privates 0:10:30.760 --> 0:10:33.079 or some of the best managers, this is the place 0:10:33.120 --> 0:10:36.160 to get it, and you can really invest in Injuriesent 0:10:36.200 --> 0:10:38.640 Horowitz or some of these other funds managers that we 0:10:38.720 --> 0:10:41.600 have prior to the Coterie coming around, And so we're 0:10:41.600 --> 0:10:44.320 there as an access play as opposed to an advice player. 0:10:44.559 --> 0:10:50.000 How deep does this sort of democratization go because you're 0:10:50.280 --> 0:10:55.040 focusing on a very specific sphere of investing. Yeah, today 0:10:55.080 --> 0:10:57.439 we target people with one to fifty million of oursets 0:10:57.480 --> 0:11:00.520 And what about Therefore, when you're looking at well alk 0:11:00.640 --> 0:11:02.720 is getting into the space of wanting to make venture 0:11:03.080 --> 0:11:05.800 investing more accessible to those who only have five dollars 0:11:05.800 --> 0:11:07.720 who wants in a credited investor are you looking at 0:11:07.720 --> 0:11:10.400 democratization to that level or are you still very specific? 0:11:10.480 --> 0:11:13.600 You know, we're focused on a specific band, but more importantly, 0:11:13.600 --> 0:11:17.480 we're focused on a specific type of person. So um, honestly, 0:11:17.480 --> 0:11:19.760 the band is less important. It's more about how you 0:11:19.800 --> 0:11:22.080 make your money and what your ambitions are for the future. 0:11:22.400 --> 0:11:24.679 I think if you can get access through I think 0:11:24.720 --> 0:11:26.679 our arts partnership was with Titan, I think you can 0:11:26.720 --> 0:11:29.040 get access to them, that's excellent. But we're looking more 0:11:29.080 --> 0:11:31.600 at someone who has a comprehensive set of needs. They 0:11:31.600 --> 0:11:34.640 want diversification, they need liquidity because of all their assets 0:11:34.679 --> 0:11:36.559 are tied up in an in liquid asset. They need 0:11:36.600 --> 0:11:39.040 tax planning because they're sitting on an asset that has 0:11:39.040 --> 0:11:42.000 potentially a thousand x appreciation and they haven't done any 0:11:42.040 --> 0:11:44.440 of their state planning. Those are the kinds of needs 0:11:44.480 --> 0:11:46.680 that we solve as opposed to someone who's looking to, 0:11:47.120 --> 0:11:49.280 you know, dip their toe into venture for the first time. 0:11:49.600 --> 0:11:54.000 A huge check to be written for a total addressable market, 0:11:54.080 --> 0:11:57.080 that is what is it? Yeah, so talk to how 0:11:57.120 --> 0:11:59.080 how big is that? Because I'm thinking, well, this is 0:11:59.280 --> 0:12:03.880 a pretty un nique, relatively privileged part of society we 0:12:03.960 --> 0:12:07.280 have in the in America, there's twenty five million millionaires, 0:12:07.320 --> 0:12:10.079 about three million of them are under the age of 0:12:10.120 --> 0:12:13.400 forty five, and we go after people to forty five 0:12:13.440 --> 0:12:16.120 one to fifty million of assets, and so the end 0:12:16.280 --> 0:12:18.080 of people we're talking about as a couple million people 0:12:18.120 --> 0:12:20.400 in the United States. But the most important thing is 0:12:20.440 --> 0:12:23.800 that the lifetime value of these people is extraordinarily high. Right, 0:12:23.840 --> 0:12:26.080 So we're not building Bank of America. We're never gonna 0:12:26.080 --> 0:12:28.080 have a hundred and fifty million customers. That's not the 0:12:28.080 --> 0:12:30.760 game we're playing. We're going after a very specific demo 0:12:31.000 --> 0:12:33.599 and offering them very specific solutions that are going to 0:12:33.679 --> 0:12:35.679 make their lives easier. And if we're right, and if 0:12:35.720 --> 0:12:37.240 we do a good job, they're going to stick with 0:12:37.320 --> 0:12:40.520 us for decades. We're trying to build decades long relationships 0:12:40.520 --> 0:12:44.040 with our customers which will generate hopefully lots of lifetime 0:12:44.080 --> 0:12:46.440 value for them and for us. Because so at what 0:12:46.480 --> 0:12:49.520 point do you not how do you stop people checking 0:12:49.520 --> 0:12:52.400 out and having the family office or starting to move 0:12:52.400 --> 0:12:55.040 on to a different level of private wealth manager that 0:12:55.200 --> 0:12:57.000 I think it really depends on what they need. So 0:12:57.040 --> 0:12:59.600 if they like a family office, which provides a lot 0:12:59.600 --> 0:13:02.760 of things, we don't by all means, go use the 0:13:02.800 --> 0:13:06.480 family office. We're looking for people who are struggling with 0:13:06.520 --> 0:13:09.240 the solutions that are currently available to them relative to 0:13:09.240 --> 0:13:12.000 what they want. And so if you're looking for access, 0:13:12.040 --> 0:13:14.280 if you're someone who likes to do your own investing 0:13:14.360 --> 0:13:17.200 or likes to think about solutions yourself, as opposed to 0:13:17.200 --> 0:13:19.000 someone who likes to give it to a family office 0:13:19.040 --> 0:13:20.880 and say, you know, I want someone else to manage it, 0:13:21.000 --> 0:13:23.079 there's nothing wrong with that. That's just not the space 0:13:23.120 --> 0:13:25.760 that we're in. So if you choose to graduate there, 0:13:25.760 --> 0:13:28.040 by all means go ahead. This of course is a 0:13:28.040 --> 0:13:31.840 long term bet and new out building a business for decades, 0:13:31.960 --> 0:13:35.079 not a year. But how has the fundraising process been 0:13:35.280 --> 0:13:39.000 or how has your current outlook had to just cool 0:13:39.040 --> 0:13:41.840 down a little bit as the market cools down. Yeah. Look, 0:13:42.240 --> 0:13:43.840 first of all, this is my second time around, and 0:13:43.880 --> 0:13:46.400 it's a lot easier to start a company and raise 0:13:46.440 --> 0:13:48.720 money the second time around. I also have two phenomenal 0:13:48.760 --> 0:13:50.719 co founders, both of whom this is their second and 0:13:50.760 --> 0:13:53.480 third time around. So I think, what what do we say? 0:13:53.559 --> 0:13:57.120 Is um, the market is still open, there's still dry 0:13:57.120 --> 0:13:59.560 padder to be allocated, the best funds are still investing. 0:13:59.800 --> 0:14:01.840 You just have to make sure that your story and 0:14:01.840 --> 0:14:04.840 your substance is tight. And what we found is, you know, 0:14:04.920 --> 0:14:06.680 some of the stories that were perhaps a little bit 0:14:06.760 --> 0:14:08.800 lighter that we're getting funded twelve months ago, maybe are 0:14:08.840 --> 0:14:11.240 not getting funded today. But the ones that still have 0:14:11.280 --> 0:14:13.280 a lot of gravy tasks behind them are going to 0:14:13.360 --> 0:14:16.079 get funded. And in a way they're actually more attractive 0:14:16.160 --> 0:14:19.760 because that powder needs to get invested somewhere, and you know, 0:14:19.840 --> 0:14:21.640 they can't be sitting on the sideline, so they need 0:14:21.640 --> 0:14:23.760 to allocate that powder into really good companies. And I 0:14:23.800 --> 0:14:25.520 think you've seen, you know, today and even in the 0:14:25.560 --> 0:14:27.480 last couple of weeks, the market's picking up and a 0:14:27.480 --> 0:14:30.960 lot of companies are raising reasonably large rounds Ethan, great 0:14:30.960 --> 0:14:32.840 house and time with you, Thanks for your time, Thanks 0:14:32.880 --> 0:14:35.080 for coming on of course the COACHERI, CEO and co 0:14:35.160 --> 0:14:38.680 founder Ethan. I meanwhile coming up, what is the bar 0:14:39.000 --> 0:14:41.400 for tech runnings this week? How low has it gone? 0:14:41.440 --> 0:14:43.920 Well to the point? Rod Erickson and BBC is up next. 0:14:44.400 --> 0:14:58.240 This is back. This week is going to be busy, Apple, Alphabet, Amazon, Meta, Twitter, 0:14:58.680 --> 0:15:02.240 huge week for tech things springing obviously Capital markets Internet 0:15:02.280 --> 0:15:06.080 equity analyst Brad ericson Brad, Wow, I mean the bell 0:15:06.160 --> 0:15:09.080 Weather almost could have been Snap. How much you're reading 0:15:09.280 --> 0:15:12.000 the concerns about the advertising spend from Snap as a 0:15:12.040 --> 0:15:14.120 read across to some of the key players like a 0:15:14.160 --> 0:15:17.480 meta for example, Yeah, nice to be here, thanks for 0:15:17.480 --> 0:15:20.720 having me. So yeah, that's that's always the tough part. 0:15:20.800 --> 0:15:24.120 Snap leads us off right in earning season, and I 0:15:24.160 --> 0:15:26.160 think the last few quarters it's safe to say they 0:15:26.160 --> 0:15:30.000 are not a bell Weather, um, so we're and frankly, 0:15:30.000 --> 0:15:32.200 when you think about the stocks and how they traded 0:15:32.240 --> 0:15:35.480 on Friday, right, so I think Snap closed down for 0:15:35.560 --> 0:15:38.680 the day clearly if you look at sucks like alphabet 0:15:38.760 --> 0:15:41.320 like Meta and the direction that those traded, I think 0:15:41.400 --> 0:15:44.640 I think investors are are not inferring Snap as that 0:15:44.760 --> 0:15:47.400 sort of canary in the coal mine at this point. 0:15:47.560 --> 0:15:50.400 So okay, so let's dig it on Meta. For example, 0:15:50.920 --> 0:15:56.480 are you anticipating decent advertising commitment deefcent marketing spend still 0:15:56.560 --> 0:15:59.400 going through their platforms? Are you worrying about what the 0:15:59.440 --> 0:16:03.880 Apple out where them has done to them? Again? Um? Yeah, 0:16:03.920 --> 0:16:05.720 So a couple puts in takes and we just put 0:16:05.760 --> 0:16:07.600 out a report on this where we had talked to 0:16:08.560 --> 0:16:12.440 almost twenty five small and medium sized business ad agencies. 0:16:12.480 --> 0:16:14.880 In the last few weeks, what we sort of heard 0:16:15.000 --> 0:16:17.640 was that, you know, number one, in terms of overall spend, 0:16:17.920 --> 0:16:20.280 things actually got a little bit better through the quarter. 0:16:20.400 --> 0:16:23.080 I think between things like lower fuel prices and maybe 0:16:23.160 --> 0:16:27.120 some consumer package goods becoming more available um from an 0:16:27.120 --> 0:16:30.520 inventory perspective, and then lower shipping and freight costs. I 0:16:30.600 --> 0:16:32.760 think actually that may have actually freed up a little 0:16:32.800 --> 0:16:35.920 bit of budget on the advertiser front. So overall we 0:16:35.920 --> 0:16:39.280 actually heard things directionally got a little bit better on 0:16:39.320 --> 0:16:43.880 the algorithm front. Uh. Also on the positive side for Meta, 0:16:44.000 --> 0:16:46.880 we heard sort of what we'd called green shoots of 0:16:47.200 --> 0:16:51.440 positive development around the targeting algorithm and campaign performance. We 0:16:51.440 --> 0:16:53.640 were very careful to say though that we do think 0:16:53.640 --> 0:16:57.360 it's very early. We don't see this necessarily impacting revenue. 0:16:57.720 --> 0:16:59.960 Uh certainly not in Q three, and it it probably 0:17:00.200 --> 0:17:03.080 is minimal and que for but it was encouraging when 0:17:03.080 --> 0:17:05.879 you think about Meta trying to restore some that signal 0:17:05.960 --> 0:17:08.520 they last from Apple, we do think that sets up 0:17:08.520 --> 0:17:11.119 as a potential till and in twenty three. Okay, that 0:17:11.240 --> 0:17:14.320 nicely drives us onto the Apple conversation because interesting that 0:17:14.320 --> 0:17:18.640 they're raising prices in services, were expecting a strong set 0:17:18.680 --> 0:17:21.040 of data coming from the services part of the business. 0:17:21.119 --> 0:17:25.080 Where are you looking for Apple's growth trajectory? So I 0:17:25.119 --> 0:17:27.960 hate to be a big disappointment, but actually don't cover Apple, 0:17:28.040 --> 0:17:32.600 so I can't speak to the apologies. What do you 0:17:32.600 --> 0:17:35.720 make the therefore of the rad across? Therefore, what about 0:17:35.720 --> 0:17:37.680 some of the other social media because Apple is having 0:17:37.760 --> 0:17:39.720 such a knock on effect, not just on Snap, not 0:17:39.840 --> 0:17:42.760 just on Meta, but other players within the field. Let's 0:17:42.800 --> 0:17:44.960 talk a little bit more about the strength of social 0:17:44.960 --> 0:17:47.680 media in general. And I do believe that you cover Twitter. 0:17:47.760 --> 0:17:50.439 Are we expecting anything particularly from their earnings there in 0:17:50.520 --> 0:17:52.800 terms of advertising commitment or is this just a more 0:17:52.880 --> 0:17:56.240 look ahead to what happens if the business is born. Yeah, 0:17:56.280 --> 0:17:58.879 so I think broadly for the social media companies, and 0:17:59.119 --> 0:18:02.000 we've heard this consider instantly in our advertising channel work 0:18:02.000 --> 0:18:04.920 over last year. The Apple signal, I hate to sound 0:18:04.920 --> 0:18:07.560 so absolute, but the Apple signal is never coming back. 0:18:07.680 --> 0:18:11.240 This is never going to change now. The way when 0:18:11.240 --> 0:18:13.959 we talk about the potential to restore signal, we're not 0:18:14.040 --> 0:18:16.199 saying doing it in the old fashioned way the way 0:18:16.240 --> 0:18:19.000 they used to do it. They're trying new first and 0:18:19.119 --> 0:18:22.440 third party alternatives, and so I think whether it's pinterest 0:18:23.080 --> 0:18:25.639 or um or any of the other social media certainly 0:18:25.680 --> 0:18:28.119 YouTube we lump into there as well, and obviously you 0:18:28.160 --> 0:18:30.920 have to talk about TikTok these days. I think all 0:18:30.960 --> 0:18:34.120 of those companies are looking for any sort of way, 0:18:34.200 --> 0:18:36.880 be at a first party solution, third party to try 0:18:36.960 --> 0:18:39.520 and restore that signal, and we do expect it to 0:18:39.560 --> 0:18:42.639 get marginally better over time. I think the issue is 0:18:42.680 --> 0:18:45.800 it's just going really slow here and we're still we're 0:18:45.800 --> 0:18:49.679 now through that period lapping when Apple started, still not 0:18:49.880 --> 0:18:52.880 going that much improvement. What about I mean, you have 0:18:52.960 --> 0:18:56.600 Amazon at an outperform I believe, Brad. What about the 0:18:56.680 --> 0:19:00.119 advertising impact is that becoming any sort of residents at 0:19:00.200 --> 0:19:03.960 Verrir strength? Oh? Absolutely. I think you know, when you 0:19:04.000 --> 0:19:05.879 think about just going back to the Apple thing, that 0:19:06.000 --> 0:19:10.240 the segment of the economy that that really affected was 0:19:10.400 --> 0:19:14.399 small and medium sized businesses and e commerce vendors, and 0:19:14.440 --> 0:19:17.880 so when you figure those guys frequently also sell on Amazon, 0:19:17.960 --> 0:19:20.679 that's been a huge source of strength. And we've actually 0:19:20.680 --> 0:19:23.240 talked to some of those aggregators and there's a lot 0:19:23.280 --> 0:19:26.560 of profit margin that those companies do make they're actually 0:19:26.680 --> 0:19:30.520 nicely profitable businesses, surprisingly profitable, and so they do have 0:19:30.760 --> 0:19:33.680 margin to be able to spend on advertising on Amazon. 0:19:34.040 --> 0:19:37.080 And we think Amazon is actually sort of working the 0:19:37.480 --> 0:19:41.440 site to be able to to uh not require but 0:19:41.440 --> 0:19:43.280 but in some ways sort of force a lot of 0:19:43.320 --> 0:19:47.199 those third party vendors to advertise more in to become 0:19:47.240 --> 0:19:50.760 discoverable on the site. So yeah, huge driver, very positive 0:19:50.760 --> 0:19:55.399 for Amazon. Since those Apple changes hit, Amazon outperform, Meta outperform, 0:19:55.640 --> 0:19:58.919 Alphabet outperform. We look ahead to how those earnings shape up. 0:19:58.960 --> 0:20:13.880 Internet Equity analyst SABC Capital Markets Brad Erickson. Chinese presidence 0:20:13.880 --> 0:20:17.359 Seizing Ping has unnailed the country's new leadership lineup, and 0:20:17.520 --> 0:20:22.480 it twice a decade reshuffle. Powerful seven member polygara Standing 0:20:22.480 --> 0:20:26.440 committee is led by Sea. The others include Shanghai chief 0:20:26.560 --> 0:20:32.359 leads former anti grafzar Jola Ze, former party Secretary at 0:20:32.440 --> 0:20:37.560 Chief walf Mee, Beijing Party secretary tight See, See's chief 0:20:37.600 --> 0:20:42.480 of staff Dingo, and Guangdong leader Li Se. This final 0:20:42.560 --> 0:20:46.560 lineup has been beyond many analysts most extreme predictions, as 0:20:46.600 --> 0:20:49.440 it marks a clear break from the collective leadership model 0:20:49.520 --> 0:20:53.280 that's underpinned China's rise It's also a historic moment because 0:20:53.320 --> 0:20:57.399 it breaks so many norms, from term limits to early retirement, 0:20:57.720 --> 0:21:01.000 to age norms, to female representation Asian as well as 0:21:01.000 --> 0:21:05.080 the resume prerequisites. For example, Shanhaiji leaves Young, who is 0:21:05.160 --> 0:21:08.679 likely to become China's next premier, does not have national 0:21:08.760 --> 0:21:12.480 governance experience, and for the first time in a quarter century, 0:21:12.680 --> 0:21:15.399 China won't have a woman sitting on its current twenty 0:21:15.440 --> 0:21:18.399 four member poly bureau, marking a major step back in 0:21:18.480 --> 0:21:21.840 gender representation. What these powerful men have in common is 0:21:21.840 --> 0:21:25.760