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| Hello Insiders!! Today's Business newsletter covers: - 🛒 Walmart bets big on Africa with online expansion
- 🚗 Deep Dive: China's car exports to hit record high
- 📱 iPhone 15 Pro: Titanium case, same price
- 🔋 Chevron invests in Utah hydrogen plant
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading for Quick Hits and the Knowledge Hub. Thank you!! Shriram
p/Shriram | |
| 1 | | Walmart invested $2.4B in South Africa's Massmart a decade ago to reach the continent's expanding consumer market, but economic turmoil as commodities collapsed, COVID-19, and the consequences of the Ukraine war hampered Massmart's success. With the aid of a depreciating South African rand and a strategic acquisition of the remaining 47% of Massmart for around $358M in 2022, Walmart effectively obtained complete ownership. More: - Following Walmart's withdrawals from overseas markets, including Japan, the U.K., and Argentina, in favor of higher-growth businesses, the company has invested in Africa.
- Walmart's foreign business generated $101B in net revenues, or 17% of its total sales, in fiscal 2023.
- 40% of Walmart International's net sales originated in Mexico and Central America.
- Walmart has invested money, placed its executives in significant positions, and is concentrating on growing online sales, which presently make up 3.7% of all sales, to improve Massmart's performance.
- Africa has difficulties, including high mobile data costs, a lack of last-mile delivery infrastructure, and a competitive retail industry.
Q: With ongoing challenges in the African market, such as infrastructure and competitive retail players, what potential risks and rewards do you foresee for Walmart in the region? Join the conversation here. |     | |
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What the numbers say: In 2023, China is poised to overtake Japan as the world's leading car exporter. China surpassed South Korea's vehicle exports in 2021 and outperformed Germany in 2022. This shift comes amid a slowing growth trend in China's domestic car market, which reached its peak in sales volume in 2017, according to Moody's data projections. Relevance: Due to issues including manufacturing overcapacity, inaccurate forecasts, and shifting consumer tastes, China is now the world's largest exporter of automobiles, which indicates a shift in the automotive industry globally. This has prompted manufacturers such as Tesla, Ford, Nissan, and Hyundai to modify their Chinese factories for exports, with a significant concentration on the electric vehicle (EV) sector, to achieve a 30% global EV market share by 2030, according to AlixPartners. Where to see impact: With their affordable prices, China's auto exports, particularly those of electric cars (EVs), are poised to upend global markets, particularly in Europe. However, exporters need help with geopolitics, weak brand awareness, and protectionist attitudes, which may alter the tactics of well-established automakers in the face of heightened competition. | | | |
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| 3 | | With models priced from $799 for the iPhone 15 to $999 for the Pro series, Apple revealed the iPhone 15 Pro with a titanium casing, improved gameplay, and a quicker chip without increasing prices. Machine learning made several new features of the iPhone 15 possible, which is a challenge for Apple as Huawei's flagship phones compete with its products, particularly in the congested China market. More: - Apple unveiled three new watches, including the Series 9 Watch, which has improved blood flow detection and a "double tap" feature.
- Apple also highlighted its goal to become carbon neutral by 2030 and unveiled new capabilities for the Apple Watch Ultra 2 for outdoor activities.
- The iPhone 15 versions feature a brighter display, a 48-megapixel camera, and batteries made entirely from recycled cobalt.
- "Spatial videos" can be recorded using the iPhone 15 Pro, also compatible with Apple's Vision Pro headset.
- In collaboration with the American Automobile Association (AAA), the iPhone 15's satellite connectivity can be used to request roadside assistance.
- Apple is releasing USB-C charging cables for the iPhone 15 and AirPods Pro to meet European regulatory standards.
Zoom Out: - According to Counterpoint Research, Android makers saw more significant shipment drops than Apple's iPhone in the sluggish smartphone market, with analysts citing substantial carrier subsidies keeping expensive iPhones affordable despite a 6% decline.
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| 4 | | The Advanced Clean Energy Storage project in Utah, which is slated to become the largest green hydrogen production and storage plant in the world and would store hydrogen produced from renewable sources in salt caverns for power generation when wind and solar energy are insufficient, now has a 78% interest owned by Chevron. The project is anticipated to stabilize the grid during intermittent renewable energy generation and deliver more than 300 gigawatt-hours of clean energy to the U.S. West. More: - The Department of Energy granted ACES a $504M loan, and the project's completion is targeted for the middle of 2025.
- Chevron intends to invest $10B in low-carbon projects over eight years to lower emissions and increase renewable energy generation.
- Chevron will collaborate with Mitsubishi Power Americas Inc. to construct a specialized turbine that will utilize hydrogen that has been stored in it to generate power that may reach California.
- The ability to manufacture hydrogen from renewable energy sources without burning off greenhouse gases makes it a helpful decarbonization technique.
- The initiative offers scalability and the possibility for hydrogen use in transportation, power generation, and Chevron's refineries to replace fossil fuel-based hydrogen.
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| 5 | | The Department of Justice (DOJ) has launched the largest antitrust trial in the U.S. in 25 years, charging that Google used its monopoly over internet search to restrict competition and innovation. If Google is found to have broken the law, the trial, anticipated to last 10 weeks and provide a judgment in early 2024, may result in another trial to decide the appropriate course of action. More: - Google is charged with exploiting its market dominance to ensure its search engine is the default option for many locations and gadgets, including paying billions of dollars a year to be the default search engine on iPhones and web browsers like Apple's Safari and Mozilla's Firefox.
- According to the DOJ, Google's activities have eliminated genuine competition in the internet search industry.
- Google says that various websites, including Amazon, Yelp, and Microsoft's Bing, compete with it.
- The trial may lead to concessions that lessen Google's influence, such as terminating contracts that make it the standard search engine on desktops and mobile devices.
- The case is similar to the antitrust complaint against Microsoft in 1998 when authorities charged the company with stifling competition by bundling its Internet Explorer with Windows.
Zoom Out: - With 182,000 employees and a market value of $1.7T, Alphabet highly depends on its $224B in annual ad revenue from digital services, including a high-query search engine.
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| 6 | | While their previous chip agreement from 2019 is due to expire this year, Qualcomm and Apple have now agreed to a new multi-billion dollar pact that will keep their collaboration going until 2026 and deliver 5G processors for Apple. With Qualcomm's stock jumping 4% and Apple's stock rising 0.5% in response to the news, this action implies Apple's continued reliance on Qualcomm's technology for 5G capabilities. More: - With unknown parameters "similar" to the prior agreement, Qualcomm will supply chips for Apple's phones every year up to 2026 under the terms of the new deal.
- According to UBS analysts, Qualcomm sold Apple chips valued at about $7.26B in 2022.
- Although it spent $1B to purchase Intel's modem unit in 2019, Apple is developing its modem technology and has yet to provide a timeframe for its deployment.
- According to Qualcomm's financial projections, just 20% of Apple's iPhones will employ its CPUs by 2026; however, previous estimates of a similar nature have typically been cautious, with Qualcomm modems being used in most 2022 iPhone 14 models.
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- Less than four years after taking over the oil company and announcing an ambitious strategy to switch to renewable energy, BP CEO Bernard Looney abruptly resigned on Tuesday, citing longstanding professional relationships.
- RTX shares hit a two-year low, dropping nearly 8%, as the company announced a $3B pretax charge due to a Pratt & Whitney engine flaw requiring accelerated inspections and removals through 2027.
- MGM Resorts shut down some computer systems after a cybersecurity issue disrupted hotel and casino operations.
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Term of the Day Return on investment: Return on investment measures the amount of realized value produced minus the cost to achieve that result. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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