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Jun 14, 2017 | 3 min read


This Week in GAFAnomics, June 14th

“This week in GAFAnomics” features top articles from FABERNOVEL’s internal Slack discussions. Read here your weekly dose of curated news about the Network Economy.

Joachim Renaudin

Senior Project Analyst

GAFAnomics [ga-fɑː-nom-iks], noun: A modern, networked, economic system spurred by the eponymic GAFA (Google, Amazon, Facebook, Apple) but also encompassing Unicorns, Chinese tech giants and all other companies changing our lives through computer technology

#The week of June 14th

So what happened this week in GAFAnomics ?!

Amazon offers cheap Prime membership for low income customers

Credits: Amazon

Amazon is launching a special Prime membership promotion for low income customers. The giant retailer said that customers who benefit from government assistance could get Prime for only 5,99$ a month.

Amazon’s move is not a pure act of charity. It is luring at low income customers who have historically been WalMart customers, and rarely shop online. According to a study published last year from Piper Jaffray, Prime customers tend to spend twice as much on Amazon than non-prime members. Amazon is hoping that Prime benefits (free delivery, promotions on diapers, Amazon video…) will attract low-end customers, and convince them to spend more on the platform. Amazon managed to lock-in the American rich and middle class, now it’s willing to take on everyone and become the only place where you shop online.


Apple launches its smart speaker

Last monday at WWDC, Apple announced a brand new device: a smart speaker powered by Apple’s smart assistant, Siri.

Built to compete with the successful Amazon Echo and Google Home, the HomePod will have a much better sound display than its competitors. IT focuses on delivering an outstanding music experience rather than skills like turning on your oven or making your shopping list. Reports say that Apple plans to leverage its Apple music 27M user base to sell HomePods. Or is it the contrary ? At FABERNOVEL, we think that Apple’s objective has always been to sell high margin devices, while Google and Amazon’s respective objectives are to gather data and create direct touchpoint with customer to sell products or services. It probably explains why you can buy one Echo and one Google Home for the price of your HomePod.


Is China creating a new tech giant ?

Credits: Toutiao

Its last financing round valued it over $10Bn (as much as Twitter), it’s on everyone’s lips in China, but rare are those who have heard of Toutiao in Europe or the US. Toutiao is a news aggregator app that uses machine learning to deliver you the best content tailored to your interests. Created in 2012 by a former Microsoft employee, Toutiao now boasts 700M users including 68M who are active everyday. It wants to become the reference platform where users consume content, challenging Twitter, Facebook, Buzzfeed or the New York Time. Yet, Toutiao has another approach. The first two rely on social interactions to tailor you the best content, while Buzzfeed and the New York times rely on the quality of the content they produce. Toutiao’s content recommendations are powered by AI and Machine Learning,

Two main insights from this news:

1) China’s transition from low-end manufacturing economy to a flourishing high tech market is complete

2) AI changes the rules of the games: new entrants with powerful technology will upend markets faster than ever


Apple’s stock is plummeting. Doc is it only a scratch?

Source: graphiq.com

Apple is facing a selloff since last week, and its stock went down 7% in just two days. Unusual figures for a firm that saw its stock price double over the past 5 years.

Revenue prospects are good, Apple launched a new device, the HomePod, services revenues are growing and Apple is likely to launch a self driving technology in the upcoming years. So why are investors bearish on the Cupertino firm?

Our take is that 62% of Apple’s revenue come from the Iphone, which is becoming a commodity. Apple maintained its stock price by paying more dividends to its shareholders than any company in the world. But Apple’s core business is to sell hardware, and no upcoming product seems to have the potential of the iPhone, the heart of the Apple ecosystem. Faith in the brand can’t stay forever. Gurus either.

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