South Korea sets a painful precedent. South Korea’s legislation to force Apple and Google to open their app stores to third-party payment options sets a dangerous precedent for the rest of the world where the 30% obligatory revenue share model is coming under increasing pressure. On 31st August 2021, the National Assembly passed the Telecommunications Business Act which categorically states...
The real hammer has yet to fall. There is more bad news for Tencent as regulatory tightening is further restricting its gaming business but the real hammer that decimated Ant Group has yet to fall on Tencent’s huge financial services business. Under-18 Chinese children will now only be allowed to play video games between the hours of 8 pm and...
At $70bn+, expect valuation gymnastics. How an electric car company that has not yet shipped a single vehicle is worth more than Ford or GM or BMW or many other companies who sell millions of vehicles every year will need some contortion of investing fundamentals to explain. Rivian is an electric car company that was founded in 2009 and targets...
More peak cycle signals. Following on from its strong Q2 2021 results, Samsung has announced that it will be investing an eye-watering KRW240tn or $215bn over the next three years (see here) which combined with Intel is a further sign that this cycle is big and that the peak is not that far away. This investment includes the hiring of...
Xiaomi is cleaning up. Xiaomi reported cracking Q2 2021 results underpinned by the ongoing collapse of Huawei, but it still does not make anything like enough money to make the valuation interesting. Q2 2021 revenue / net income was RMB87.8bn / RMB8.3bn comfortably above consensus at RMB81.7bn / RMB5.1bn. The vast majority of this strength came from smartphones where Xiaomi...
The CCP does what the USA cannot. Didi is a great example of the long-term negative effects of overregulating an industry can have and hands an advantage to China’s arch-rival, the USA. Didi is suspending its plans to expand into the UK and Europe for at least one year but this could be much longer or even permanent depending on...
Musk’s effervescence may now have consequences. It appears that crashing into emergency vehicles is one mistake too far for the NHTSA which is now investigating (to be followed by Congress) the cause of these crashes and I suspect that it will conclude that Autopilot falls far short of the hype and take corrective action. Tesla’s Autopilot is controversial because it...
NVIDIA has some explaining to do. The UK competition authority clearly has more concerns than expected with regard to NVIDIA’s purchase of Arm, meaning that NVIDIA is going to have to make more concrete commitments in order to get the deal through. The UK Competition and Markets Authority (CMA) issued its report (see here) on the transaction, concluding that the...
Tencent remains the most exposed to the sanctions of the state. Tencent reported regulation-blighted results and warned that there is more to come highlighting the fact that of all the Chinese technology companies, Tencent is most at risk from regulation despite its good behaviour. Q2 2021 revenues / EPS were RMB138.3bn / RMB4.39 compared to consensus at RMB138.9bn / RMB3.28....
Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.
Arm China – No Armed robbery
Very little to see here. The notion that Arm China has pilfered Arm’s IP and is selling it to Chinese customers makes no sense because even if it were true, those customers would be unable to sell a device outside of China without being hit with a large stack of lawsuits. It is not difficult to draw this conclusion when...