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Morning Brew June 29, 2020

Emerging Tech Brew

TOGETHER WITH

Ascent Protein

It’s launch day at the Brew. We’re not sending anyone into space, but we are launching Marketing Brew, a triweekly newsletter written by Phoebe Bain. 

Subscribe here to read about the brands boycotting Facebook...and all the other top stories in the marketing and advertising world. 

In today’s edition: 

 Amazon, Zoox, and Waymo
🤺 ARM China 
 Microsoft closes stores

Ryan Duffy

AV

Big Tech Calls a Robotaxi

Zoox test vehicle

Zoox

Once upon a time, CEOs expected we'd be regularly hailing autonomous rides by now. Instead, companies have faced serious tech hurdles, which have led to missed deadlines and (mostly) far more level-headed autonomous vehicle (AV) predictions.

But those road bumps don’t faze the world’s biggest tech companies, which are plowing forward with their self-driving strategies. 

Amazon gets serious

On Friday, the company agreed to acquire self-driving startup Zoox for more than $1.2 billion, the FT reported. This is Amazon’s largest investment in the AV space to date. Last year, the company participated in the $530 million Series B of Aurora, a startup developing a virtual driver for vehicles. 

  • Amazon is also piloting Scout, its autonomous delivery robot, in Washington and California. 

A bit more about Zoox: The six-year-old company is designing a bidirectional AV from scratch, which it would eventually use in a robotaxi ride-hailing service. It’s a neat but expensive concept, and Zoox’s runway was shrinking. Amazon’s deep pockets will take some pressure off. 

  • Amazon says Zoox CEO Aicha Evans and CTO/cofounder Jesse Levinson will continue to run the company.  

As for Amazon, the company said it’s drawn to Zoox’s robotaxi ride-hail vision. I suspect there’s also an autonomy play for logistics/fulfillment centers and last-mile delivery. 

Alphabet is building alliances left and right

Last week, Alphabet’s Waymo and Volvo announced they’re partnering to build an electric robotaxi fleet. Waymo will contribute the virtual driver, while Volvo will supply an “all-new mobility-focused electric vehicle platform for ride-hailing services.” 

Waymo is becoming the de facto self-driving vendor for automakers that don’t have an independent go-to-market AV strategy. Other Waymo partners include Fiat Chrysler, Jaguar Land Rover, and the Renault-Nissan-Mitsubishi alliance.

Bottom line: The AV field continues to consolidate via acquisitions and alliances. While everyone’s thinking about robotaxis, I'm convinced the first commercial AV fleets will carry packages, not people.

        

HARDWARE

This Boardroom Squabble Costs an ARM and a Leg

ARM-branded chip

Francis Scialabba

Company: We fired an executive. 
The executive: No, I’m actually still in control. 

That’s the short version of what’s happening at ARM, the SoftBank-owned British firm that designs chips for most mobile devices and the world’s top supercomputer. The company recently said it fired ARM China CEO Allen Wu for “serious irregularities” and “conflicts of interest,” the FT reports. But to quote The Wolf of Wall Street, Wu is “not [redacted] leaving.” 

Legal ARMor: Since Wu is ARM China’s legal rep and has the company’s seal, he’s technically still in charge, per Chinese law. “He knows he will eventually be removed. But this is his weapon to get a separation agreement,” a source told the FT. To formally remove Wu, SoftBank needs to fight a protracted legal battle and/or use the political connections of Hopu, a Chinese private equity firm that owns 51% of ARM China.

Zoom out: ARM China contributed a fifth of ARM’s total sales in 2018, and ARM IP is in 95% of all semiconductors made in China, according to SoftBank. SoftBank and China need ARM China, which could affect how this dispute is resolved.

        

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RETAIL

Microsoft Couldn’t Successfully Recreate the Genius Bar

Flagship Microsoft Store in London

Microsoft

A trend that will stick around post-pandemic: Tech sales shift online. 

On Friday, Microsoft said it will close 83 retail stores. Many of you just learned that Microsoft had any retail stores, so this news may be a lot to process. The company will repurpose its London, NYC, Sydney, and Redmond, WA, locations as "experience centers” that showcase Microsoft technology.

  • Since temporarily shuttering stores in late March, Microsoft says its retail team has moved sales, consultations, and workshops online.  

The software company should be just fine online

Microsoft says its digital storefronts reach 1.2 billion people every month. From cloud services to collaboration tools, Microsoft products are in high demand during the pandemic because they help employees work in a distributed and asynchronous fashion.

My take: Brick and mortar never felt like a good fit for tech companies, with the notable exception of Apple. Microsoft doesn’t need physical retail for branding or low-touch operations. 

        

BITS & BYTES

OneWeb launch

OneWeb

Stat: The U.K. will invest $620 million in bankrupt satellite operator OneWeb so the government can build its own version of GPS, the FT reports. I spoke with OneWeb CEO Adrián Steckel last fall about the startup’s ambitions. 

Quote: “Jeff Bezos is a copy haha”—Elon Musk’s Twitter reaction to Amazon buying Zoox.

Read: Wired profiles Karat, a company that offers $50,000 and up lines of credit to wealthy influencers who get smaller credit limits from conventional banks. 

WHAT ELSE IS BREWING

  • Alphabet is acquiring North, a Canadian startup that makes AR smart glasses, for $180 million, The Globe and Mail reports. 
  • Apple will not include wired earbuds or a power adapter in the iPhone 12 box, according to an analyst with a good track record of scooping the company. 
  • Sidewalk Labs, Alphabet’s smart city division, laid off half of its Toronto team, Bloomberg reports. 
  • Santa Cruz, CA, became the first U.S. city to ban predictive policing last week.
  • The European Commission says tech companies are getting better at proactively removing hate speech.

WHAT'S BREWING THIS WEEK

Monday: RemoteCon runs the whole week, Aspen Ideas Festival runs through Thursday; Micron Technology earnings

Tuesday: U.S. senators meet virtually to discuss the digital dollar; Mobile World Congress Shanghai would have started today (it’s canceled) 

Wednesday: EU reopens for travel (but not for most Americans); Sony Walkman first went on sale in Japan 41 years ago today

Thursday: Halfway through 2020 at noon 

Friday: *Away from keyboard*

TECH THINGAMABOBS

For Ikea content: The Swedish furniture maker wrote about its experiments putting new technology into everyday items. One nugget: “What if algorithms could help design your next favorite chair?”

For Google strategy: This blog argues Google “blew a 10-year lead,” failing to innovate on core products like mobile search and cloud-based office tools. 

For a timeline of Brew launch days: The family is growing... 

Emerging Tech Brew — 481 days ago
Retail Brew — 381 days ago
Business Casual — 278 days ago
The Essentials — 83 days ago
Marketing Brew (sign up here) — 0 days ago

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

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