| Here’s your daily business briefing. - 📱 T-Mobile buys U.S. Cellular for $4.4B
- 📈 Deep Dive: Apple's China iPhone shipments surge 52%
- 🎬 U.S. Memorial Day box office hits '95 low
Thanks for reading! Shriram
p/Shriram | |
| 1 | | T-Mobile has announced the acquisition of nearly all of U.S. Cellular's wireless operations, including customers, stores, and 30% of its spectrum assets, in a $4.4B deal. U.S. Cellular's shares ($USM) jumped over 10% after the announcement, almost ten months after the company revealed it was exploring strategic options. More: - T-Mobile ($TMUS) intends to finance the acquisition through cash and up to $2B in assumed debt, which will be offered to certain U.S. Cellular debtholders.
- The acquisition aims to enhance coverage for T-Mobile's customers.
- T-Mobile expects no impact on its 2024 financial outlook or shareholder returns while projecting about $1B in cost synergies from operational and capital expenses.
- The deal, slated to close by mid-2025 pending regulatory clearance, needs no shareholder intervention, as Telephone and Data Systems, holding an 83% stake in U.S. Cellular, has consented.
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What the numbers say: iPhone shipments in China surged 52% in April 2024, making up most of the 3.5 million units shipped by foreign brands. After declining in the first two months of the year, sales stabilized in March and rebounded in April. Relevance: The rebound is due to significant price cuts from Apple ($AAPL) and its resellers since early 2024, ahead of the June 18th shopping festival. Despite losing market share to Huawei, the iPhone has regained its position as the top mobile device among Chinese consumers, according to a Bloomberg Intelligence poll. More data: The surge in iPhone sales is driven by a premiumization trend in China, with over half of consumers willing to spend more than 4,000 yuan ($550) on their next phone, up from 33% currently using premium handsets. The April increase in iPhone shipments highlights strong demand from high-end users seeking better devices for longer usage cycles. | | | |
| 3 | | The U.S. box office is projected to have its worst Memorial Day weekend since 1995, with estimated ticket sales of $128.3M, down from $205M in 2022. "Furiosa: A Mad Max Saga" led the weekend with $32M in sales, as the summer box office remains slow due to last year's Hollywood strike delays. More: - The summer season, constituting nearly 40% of yearly domestic revenue, is critical in determining annual totals.
- The blockbuster films Barbie and Oppenheimer, released last summer, collectively generated nearly $1B in domestic box office revenue.
- Analysts predict a 20-25% drop in summer 2024 box office revenue compared to the previous year, with "Deadpool & Wolverine" and "Inside Out 2" expected to boost earnings.
- "Deadpool & Wolverine" broke first-day ticket presale records and is projected to debut with earnings ranging from $170M to $210M.
- Box Office Pro forecasts 2024 box office earnings to reach $8.2B, approximately 10% lower than the $9B earned in 2023, remaining below pre-pandemic levels.
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| 4 | | Nongshim, South Korea's leading instant noodle maker, is expanding globally due to the rising popularity of Korean culture, particularly in the U.S. The instant noodle market, valued at $50B, saw South Korea's exports reach $1B last year, with Nongshim's popular Shin Ramyun achieving record sales of $883M in 2023, with nearly 60% originating from abroad. More: - Nongshim aims to triple its annual U.S. sales to $1.5B by 2030 by targeting mainstream consumers attracted to Korean culture, including K-pop and movies like Parasite.
- Nongshim commands a 25.4% market share in the U.S., with sales increasing by 10% to $538M last year.
- Despite their higher prices, Nongshim's strategy of offering premium products like Shin Ramyun Black has proven successful in the U.S. market.
- To meet growing demand, Nongshim is expanding production lines at its Los Angeles facility and exploring constructing a third plant in the U.S.
- Sales stagnation in China has prompted Nongshim to shift its focus to the European market, where first-quarter sales surged by over 30% to $80M.
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| 5 | | Hotel day passes offer budget-conscious travelers access to amenities without booking a room, with ResortPass leading the market by partnering with over 1,300 luxury hotels. U.S. luxury hotel room rates averaged $400 per night from Jan. 1 to April 6, with rates expected to rise by 85% in July compared to pre-pandemic levels. More: - A Booking.com survey found that over 60% of respondents consider their cost of living when planning travel, with many willing to pay for accommodation upgrades.
- Day passes cater to the post-Covid "revenge travel" trend, offering luxury experiences at a fraction of the cost.
- Virgin Hotels New York City offers day passes starting at $130, granting access to amenities like rooftop pools with views of the Empire State Building and city skyline.
- ResortPass has served over 3 million users, offering day-pass access in 250 cities starting at $25.
- The average ResortPass customer spends around $165 on all-day access, often splurging on additional amenities more than overnight guests.
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| 6 | | The soda firm Olipop Inc. expects sales of about $500M this year, which will double its $200M revenue in 2023. Since its founding in 2018, the business has grown quickly; in 2019, its revenue was less than $1M. More: - Olipop, a young food and beverage company, has achieved profitability, a rarity in the industry, and remains open to raising more funds given the competitive market.
- Olipop's sodas, with reduced sugar and fortified with prebiotics and fiber for gut health, cater to the rising demand for healthier alternatives.
- After gaining traction in Northern California independent stores, the company saw significant success upon entering Erewhon, a popular health food market in Los Angeles.
- Olipop has expanded distribution to over 30,000 locations, including major chains like Whole Foods and Sprouts, catering to a diverse customer base from Sweetgreen to Wawa.
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| 7 | | Quick Hits: *This is a sponsored listing. | | | |
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 | 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 Shriram Jeevakumar | |
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