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This is Bloomberg Technology coming up China's chip sectors. He's a thirteen million dollar rally. We discussed the bets on Beijing stimulus.
And Amazon's leaders pushed for a return to offices to protect the tech giants.
Culture and a US infrastructure hack American water works. The latest target is officials warn of threats from Iran and China.
But first we turn to our top story on.
The markets, which is this Chinese chip maker Semi Conductive Manufacturing International SMICK leading that thirteen billion dollars sector rally after global investors, but that Beijing will declare more policy or financial support for the industry that is central to its geopolitical ambitions.
It makes Emeni Grafeo Jones us for more.
Look.
Smick is blacknisted for US investors, but this is a broad rally in the chip sector over in China.
This is it's not just SMIC that's rallying but that stock is up over twenty eight percent just on the day, up about sixty five percent in the.
Last few days.
And these are shares that have been trading in Hong Kong because the stock market actually in the mainland China has been closed all week for the holiday. So there's a lot of anticipation that when the Chinese stock market opens, I guess tonight for us in the US, but tomorrow morning, Tuesday morning in China, that there's going to be a florry of bets. So we're seeing now traders kind of getting ahead of that. Smaller competitive competitors in the chips fake space are.
Also up as well.
Hua Hoang Semiconductor up something like seventeen percent right now.
Investors think that the Chinese government is going to have some kind of semiconductor industry specific stimulus. Right, But if you look at the Chinese equity market since kind of late September, things have been improving. Give us the bigger picture of this performance relative to I guess US tech or European tech so far in twenty four.
Well, I mean the bigger picture performance is that Chinese stocks overall have pretty much been in a bear market since about February of twenty twenty one. So although we've seen big gains since late September, when, like you said, Beijing did announce fiscal and monetary stimulus, we're still down for the year in a lot of these areas. And
that's right. It's really a big question here what exactly are we going to get from China when they do have that press conference later tonight tomorrow morning in China and when the stock market reopens. There was a note from analyst Brent Donnelley and the line of his email was China, China, China, China.
And then he has a point.
Yeah, he has a point, And his note he said, how big is a stimulus? Will they even tell us? Tonight's China reopening is likely to be spicy, So there's a lot of questions about is the government actually going to pledge specifically to add stimulus to the semiconductor sector. But the bet here in the market right now is that they will.
And also, look, this has been a long hated area.
More broadly, positioning has not been long China and indeed China techno broadly because people have.
Gotten burned by it in the last two years.
Anyone who's gotten in, like I said back in twenty twenty one, is actually still in negative territory. We are seeing sentiment start to I guess, come around as one would expect, the stock market goes up, ETF flows follow So in just the last week we saw about six billion dollars flowing into US listed China ETF. So even you know, across the globe, investors are trying to get in or at least play the momentum right now.
Ex Emily Graffair with the reporting on the market moves on China tech. Let's discuss a bit more with Janetarly, head of market analysis at RBC Brewin Dolphin and your reaction, Janet, was to upgrade your call on in the exuities context on Asia ex Japan. When you're weighing up the factors in the context of China tech, what were the things that you were looking at short, medium and long term.
Thanks for having me.
I think we have been skeptical on China, as many people are, but I think is really how undervalued China has been versus say the US or other development markets, and also the fact that position.
Has been very light.
I mean for US, we have been underweight for quite a sustained period of time, so I think that is shifting. And I think your Chinese market is a very momentum driven and very liquiditive driven, so we have seen both happening and I think we would like to participate in this rally.
This probably has more to go.
And in terms of Chinese tech, I mean obviously undervalued, very unloved versus the US counterpars part. Obviously they're they're different, but still we think that there is still much upside potential from here. But haven't said that we I mean we just upgraded modestly. I think there's still a lot of question mark for the longer term.
Emily's reporting just in that conversation was largely about some of the domestic chip names in China. What's your attitude towards the semiconductor sector in mainland China?
Yes, I think it is obviously a very state supporter sector has been for a while long term wise, so I think it makes sense for investors who favor this sector given basically I think the new tech, the semiconductor strategic areas of uh, you know those equities have you know,
it should do well given how important that is. But ultimately we have to understand that a lot of developed economies are likely to steal being skeptical, and you know, have restrictions of all sorts of those companies products.
So I would say I would participate in the rally.
I do think that it has further to go, but I would be a bit more cautious over a longer term, and we have to kind of understand where to take profits when when it is necessary.
To that point, Janet, do you think that people are protecting to the downside enough? Do we think a lot of people are going to get burned once again?
I mean, it is potentially possible.
We have seen that play out before in the previous bull market cycle and then a very sharp band market in China. We have seen that play out again again. But I think I think it could last for quite a bit. As I said, given how light the positioning, how underweight it is for global investors, So I would say it could have further to run in the next a couple of months at least.
I think.
I think the Chinese bodies, their heads are tied. They would just have to provide more stillables. But you're right, there is absolutely a chance for some investors to get burned, So that's.
Why we had to auditor it very closely.
What's been interesting is there's been institutional money flowing in David Tepper saying how much he's liking China and also retail. I want to get your check just more broadly on sentiment towards semiconductors globally technology globally. Where are we seeing the optimism still in institutional money or is it now sort of retail and we question there for the longevity, I.
Think well, I think for US, for example, we still like the global semiconductor sector. Obviously that's mostly US Clay, so I think there's a lot of structural supportive drivers behind that. We are very happy to get exposure to those high quality companies.
But I think for.
Institutions, I think it will be very dangerous if you don't participate in the semiconductor That AI related theme, I think what retail investors is. I think once the momentum is back, I think that would draw in more participation. Basically, as interest rates are being cut, the economy continues to expand, and hopefully let's bad news out there on the headlines, I think that that could help.
Although we still like the setter pretty much.
We have stayed invested and we continue to encourage investors to add in more money when valuations have turned attractive of say the past couple.
Of months, Janet, when you got to your desk this morning in London, how big a factor risk was trade risk or supply chain risk for technology investors around the world.
Obviously, it is part of the consideration given that you know, the cheap industry is very you know, the supply chain is very complicated, and if there's well widespread trade productionism then obviously that's not great.
But fundamentally the demand is still very strong.
And I think what we are a bit more reassured now is that if you look at the polls and the the probability of Trump winning the election by betting market, it has gone down. Obviously it is a very tight race, but it gives us a bit of comfort to be a bit more positive on the China equity story and
also the global semiconductory part. But I think ultimately fundamentally is about the demand the long term build up of AI infrastructure and how strategically important that sector is for many sovereigns.
Out there, Jennet, how important therefore, when you sat down was the four percent number on the tenure yield in that macro context for these AI bets, Well.
The thing is, yeah, we saw you go back to four percent.
I think some small to meet cap stocks could be struggling a little bit today, but we still see some of the key semiconductor stocks right. Obviously it's very company specific, but what we think is, you know, ah, I think, yeah, astrong economy, good job market hair Outomley is good for the world economy, for the US, for corporate earnings, et cetera. I wouldn't look too much into this one day move
for equities. If they're down or struggling a little bit, I will still be quite comfortable to be overweight in the US and in the usmiconductor space.
Chanit mely love having you on head of market analysis at LBC Brew and Dolphin.
Thank you.
Now coming up, US water infrastructure is under attack. More on the latest cyber attack on American water Works. This is blue Big Technology. American water Works says it's computer networks and systems were hacked.
Now the New Jersey based company.
Which supplies drinking water and wastewater services to fourteen million people, So that parts of its systems were disconnected or deactivated as they worked to contain the cyber attack. From more of Bloomberg's Jordan Robertson joins US, Now, we've had warnings from governments about this How much how broad is this attack from real perspective, Jordan.
Yeah, thanks for having me. So, this company that was breached is the biggest publicly traded water and wastewater company in the US. As you mentioned, it serves some fourteen million customers across half of the states in the US. It's potentially a very big deal, you know. Unfortunately, we don't have a lot of details or specifics about this
particular attack. We just know what the company is disclosed this morning in a regulatory filing, which is that a victim of a cyber attack, and that it's disconnected or deactivated some of its systems. We don't have a lot of specifics about the actual attack, but we do have a lot of context around attacks against water treatment and water facilities in general, which is that the US government has been advising for months, in particular that Chinese groups
have been infiltrating US water systems. Impossible kind of preparation for more disruptive attacks. Now, we don't know if this is one of those, or if this is some other type of breach, but given the context and given the size of this water company, it's potentially a very big deal.
Can you give us the context?
As well as the US accusing the China linkt tackers of infiltrating networks that operate as well critical US services.
We've got reports in the Wall Street.
Journal on Friday about potentially an attack on well providers of Internet of Wireless, but also of US BORBA more broadly.
Yeah, what's happening now is a little bit different than what's happened in previous years with regard to Chinese hacking.
You know, for many, many.
Years, the US government has issued warnings about Chinese hacking for economic espionage, so industrial espionage purposes, and also just regular espionage, you know, spying on government agencies and military
contractors and things like that. But what the government has been warning a while about now is that there are using Chinese hackers, particularly a group called volt Typhoon, which is the name that cybersecurity professionals have given them of kind of pre positioning themselves inside critical networks to conduct potentially disruptive attacks at some predetermined point in the future. In the military, they call this kind of preparing the
battle space. That's a very different type of attack than we've seen in the past from some of these Chinese groups. So that's what the US government has been warning about. Again in this case, we don't know yet if this is related to these Chinese attacks at all, or if
it's something else, potentially like ransomware. But given that context, and given that the US government is really ringing the bell and really raising the alarm about these Chinese attacks, it bears paying pretty close attention to this incident to see if there's something deeper involved.
Jordan, you're deep on the cybersecurity beat, right, and there's going to be a section of our Bloomberg Technology audience around the world that go, they're attacking water infrastructure. So speak a little bit more about that water infrastructure and do we have any reporting on sort of the competence of US companies and US government to defend against it.
Yeah, to answer your first question, why attack water companies? You know we saw with the attack on Colonial pipeline several years ago that you know, you don't have to attack an actual pipeline to disrupt the to disrupt critical systems, you know, whether in the US or elsewhere, you only have to disrupt their IT systems. In the case of Colonial Pipeline, which you know, disrupted gasoline shipments across the
entire Eastern US, it was their IT system. There's a billing system that went down as a result of ransomware attacks. So there's a lot of damage and a lot of disruption that hackers can do by simply disrupting even just the IT systems of some of these critical infrastructure providers, whether that's electricity providers, whether it's water providers, you know, kind of whether it's gasoline shipment companies and pipeline operators.
So there's potentially a very great advantage that a foreign nation would have could have, you know, if they decided to disrupt in that way. And with regard to the competence of critical infrastructure providers, We've done a lot of reporting. The cyber team A Bloomberg's got a lot of reporting on this topic. And the answer to your question is it varies. You know, the largest companies, the largest electricity suppliers in particular, tend to be pretty good at cybersecurity.
They've gotten the message.
They've got big budgets.
But as you go down that ladder, and you go down the ladder of resources in particular, you know, it really just varies. There are some very large, critical infrastructure providers that are just not as great at protection as others.
Blombergs Jordan Robinson were grateful for that reporting, Thank you. Meanwhile, Ukrainian hackers say they carried out a cyber attack that took down online broadcasts of Russian state TV and radio channels. According to officials in Kiev, at least twenty Russian broadcasters were affected, though claims could not be verified by Bloomberg News. The disruptions to the broadcasts coincided with Russian present in Vladimir Putin's seventy second birthday Caroline.
Back in the US, ed State, local officials across the country are bracing for a range of possible disruptions, including cyber attacks as well as disinformation on ruly crowds, even ahead of the US elections next month. We're want to dig into that with Bloomberg's Jamie Tarabay joining us. You went to Arizona. You are focusing on really the computer systems in particular around voting in Arizona.
Why remind us.
Well, Arizona four years ago was the scene of one of the biggest flash points in the twenty twenty election. There is an aspect to what they did at the time that they really learned from going forward. And one of the first things that they did was look at physical security as well as cybersecurity. Of fence went up to protect the workers inside, and then they began this
system of trying to reach for utmost transparency. There's a twenty four hour livestream camera that actually doesn't even have to work outside of election season, and that is going three sixty five days a year, twenty four hours a day, seven days a week.
They are inviting people.
To come to tour to look at all of the computer systems to see that everything is serialized, everything is audited, everything is tracked. All the networks are air gap so they're not actually connected to the internet. Whatever ways people might think that there's a possibility that an election or that their vote could be hacked, the people in Arizona are doing their utmost to really push back and try to dispute a lot of those conspiracy theories.
Jamie four years ago, I was there posted on the election trail in Maricoba County, and I think it's worth just discussing the basics of what we're talking about. It's a building, it has windows and bricks and mortar, and they're making modifications to it because inside that building they'll count votes. Take it from there and run with the rest of the story.
To go into this building now and as you said, four years ago, we literally the conspiracy theorist Alex Jones made it into the building. A couple of days later, one of the people who was a protester in the January sixth attack on the Capitol was in the parking lot. Heavily armed people were in the parking lot. And now you cannot get in there without access without a security clearance.
The room that where all.
The ballots are tabulated is a place where you can only go in if you have security clearance. Every single every single machine is audited and tracked and checked. They have literally done everything they can to get ahead of any possible question about any irregularities or any redundancies. I mean, there's a machine that go that sifts through the ballots, and if one of those ballots ways just a little bit different.
To the rest.
They basically will you get rid of They'll cancel out the batch two hundred before and two hundred after.
They're really doing everything they can.
Here Bloomberg's Jamie Taraba terrific reporting. Thank you very much.
This is a first look inside the world's first humanoid robot assembly plant. It's a work in progress. Here Agility Robotics is going to manufacture digit in a teal and middle gray bot that walks like a bird. It's sneeze beIN backwards, and it is designed to work at first
anyway at warehouses, including at Amazon and Gxologistics. The factory is on Marshy, former agricultural land on the outskirts of Salem, Oregon's capital, not the robotics hotspot, but it is up the road from Corvallis, an Oregon State university where Jonathan Hurst Robotics, the professor, co founded Agility, and of course there is an Amazon warehouse nearby. Agilly's first design was
a monopod called Thumper. Later in more sophisticated bots have arms and a head unit for sensors, making them a little less creepy. At this facility, Agility simulates work its spots are already doing for clients, stacking tote bins at Amazon and placing bins on conveyor belts in the case of GXO. While I was watching one Digit tried to place a stack of bins on top of another, but was off by a small margin, so the new bins
SATIS kew pass and watch for a few seconds. As a software tried to figure out what to do, it gave up. Other times it was seamless. Digits, communications systems, and for sensors live in its head unit, and first Agility didn't put heads on the robots. The team started with the goal of building bots able to move in human spaces, not ones that looked like us Digit does and fingers. Agility's first Digit model started with black paddles capable of lifting totes, and they're adding other end of
arm devices. The company hopes this building will be able to churn out ten thousand robots a year. If we could doing there, we'll take a while. Engineers are still documenting assembly processors, figuring out what tools should go where before they can start mass hiring technicians to assemble the bots. The first robot assembled year one of Digit's new fourth version will be completed sometime this month.
Talking of Amazon, a rare analyst downgrade citing concerns over the company's margin trends into next year, saying growth in the cloud computing business is unlikely to help much, Whilst Fargo Securities cut the stock to equal way from overweight and cut a price target from two hundred and twenty five to one hundred and eighty three dollars, one of the lowest on Wall Street.
ED will have more on that later.
Yeah, Amazon, which recently decided to bring corporate employees back to the office full time, honoring Bloomberg Spencer. SIP sources are telling us that there's a reason for that, and the reason is culture. Explain that.
Yeah, so Jesse is saying CEO Andy Jasse is saying that new hires, and remember Amazon doubled in size to the pandemic, that newly hired Amazon employees just aren't getting the chance to learn and understand the culture the way they would if they were working in the office, you know, all week long. They're currently at three days a week. There's a lot of what they call coffee badging going on, you know, people badging in grabbing a coffee, heading home, doing the rest of the day from home.
So three days isn't quite enough to have that overlap.
Of people where the younger employees are getting an opportunity to learn thirty seconds.
I'm afraid, Spencer, but this is something Andy Jesse is very passionate about.
Well, that's what you're saying. You wrote a very long note to employees explaining it. And then the pushback on he mentioned the word culture multiple times, and then the pushback is, oh, well, you're just trying to lay more people off and this is a way to further thin the ranks. And the true answer is probably a little bit of both. They want to help the culture and they want to thin the herd a little bit.
It's always somewhere in the middle. Spenser Soper Blue.
Welcome back to Blue Meg Technology and Caroline Hyde in New York.
And Amed Lovelo in San Francisco. Going to take a quick look at markets. It's hard to summarize what's going on beyond strong jobs data on Friday for the months of September. Kind of pairing back the increments that we expect the Federal Reserve to cut rates. Then as that one hundred modestly lower, basically flat. The Philadelphia Sembiiconductor Index is flat. There is some name single names moving to the upside, some of the downside, Bitcoin pushing above sixty
three thousand US dollars per token. There's lots of analyst noise out there. Apple was downgraded by Jeffreys over iPhone sales pessimism. The analyst says high expectations for the iPhone sixteen in iPhone seventeen are premature. An analyst note Caro on an iPhone seventeen that doesn't even exist yet.
One that we're going to be digging in with another analyst in a moment. But let's just talk about what does and doesn't exist. Bloomberg's Apple whisperer, Mark Kerman is with us, and you've been writing over the weekend power On as always about the cadence with which Apple gives us products and ultimately about a timing mismatch perhaps with what actually is eventually on the market.
You know, I think it's interesting because my point over the weekend in my power On column, I think is very much connected to what analysts are now seeing.
Right.
I think some of these analysts.
Are a little late to the game.
Here, the issue is not necessarily the iPhone sixteen, Apple and AI or the iPhone seventeen in a vacuum. I think this is a company that is slowly pushing away from the momentum and the innovation it had so many years under Steve Jobs, in so many years under Tim Cook and Johnny I've after Jobs, but now it feels like we're at a point where maybe at least for the next couple of years, they're running out of these
these big ideas. They're behind in AI, they're behind in mixed reality right, They've been behind in the smart home. But they do have these core competencies that continue to keep the business humming. The iPhone, the iPad, the back, the Apple Watch. And I think that looking at the phone just as the issue is a little bit too narrow. This is a company that's been searching for a next big idea in a next big product category. And there's really two sides of the coin here.
One are they going to find.
That in two?
Does that thing exist? Is there really another iPhone? At this point, I'm thinking the iPhone is not really something that you're able to replicate right once in a generation. And I'm not talking about a ten to twenty year generation. I'm talking about a fifty year generation product, right, And so maybe expectations for.
Summer are too high unless it's a different form factor from a smartphone, which we'll get into later in the show. The umbrella point of your newsletter is that Apple has been releasing a new generation of product annually, and it's moved away from that. But there were advantages to doing it annually. The team knows what's coming, investors know what's coming, and there's like a holiday PR marketing campaign that can go on. Right. What is the advantage of not doing it annually? Yeah, go ahead.
Well, it's slowly inching away from that, right, And I think there's two reasons. One, there's so many products now in their pipeline. There's so much stuff. And the way that they're functionally organized as an engineering organization makes it so every team has to touch basically every new product before it's released. There's no iPad division or Apple Watch division.
Right.
This is a very cross functionally desig organization. That's the way Steve Job set it up. That's why they've been so successful.
Right.
That leads to product delays, that leads to software delays. Now they know that's what's happening, and so they have to roll these features out over several months. They can't just do it at one time, and so Apple Intelligence that's rolling out between September and June. Right, it's not all coming out in September. It didn't all come out last month. It's not all going to come out on October twenty eighth when I expect Apple Intelligence to be released.
You saw with the Apple.
Watch Ultra two, right, they retain that model for two years in a row, simply add some new bands and a black color option. This year, dive that Apple Watch SE wasn't updated. The iPhone SE is updated every two to three years. You're seeing the iPad pro now updated every year and a half to two years. So they're slowly inching away from that annual cycle, which is something
they just simply couldn't keep up anymore. The good news is you're getting more polished products, you're getting bigger upgrades generation over generation potentially, and you're getting fewer bugs and more unpredictability from Apples. So I think overall it's a mixed bag, but I lean towards these bigger generational updates, being a good thing. The one product that I don't think is going to be necessarily impacted by this is the iPhone. They are so locked into that twelve month
cycle on iPhone hardware. You really can't back your way out of it. It's too important to the company and the stock price. It's marketing in the holiday season, so it's really the peripherals around their main breadwinner.
Bloomberg's Mark Gunman and I would say it is a must read power on from the weekend. Thank you very much. Let's get more and let's talk deeply on Apple. MISSOO analyst Jordan Klein is with us, and there's a lot of noise this morning from the cell side, Jordan about what is iPhone sixteen? Over hype the Jeffreson I even mentioned seventeen, which is fictional at this point. It doesn't
exist at least as far as we know. When you sit down at your desk and you get the phone calls from clients, how do you react to all of that?
Well, I mean this is a rite of passage for Apple and the investment community. Every Tember October when they launch a new phone. Everyone loves to go out and do their checks for how long does it take, you know, to get a phone once you place the order, and that's you know, the lead time analysis to trying to judge demand.
I think it's kind of nonsense.
I mean, yeah, people like to do those, the press and media pick it up, but at the end of the day, you won't really know how well this cycle is till you know, next spring, and then by then everyone's looking at the next version, right, so it's always kind of on to the next thing. And I think from the standpoint of where I'm focused is no one really expects the sixteen to be some game changing iPhone cycle. It's not going to outperform. I don't think expectations of anything.
It's expected to underperform. That's why the stock's been lagging. But most importantly is kind of the seventeen, you know, the next phone next fall. That would be the second iteration of you know, their AI software, which hopefully is then going to drive more of a replacement cycle and get people excited.
Generally, Could you summarize what investor attitudes are toward Apple holistically?
Right now?
They're not good. I think every day you get another cell side report that is negative or cautious in terms of our checks, suggests demand is weaker than it was a year ago.
The phone isn't selling well.
They're going to start cutting unit production by December, and that permeates across the investment community, and most people are like, yeah, it's a major stock.
I have to pay attention.
I have to have some waiting in my portfolio relative to my benchmark. But most people just take a view that unless I think this product's going to surprise, I can underweight the stock and not worry about missing any alpha.
And that's what they're doing.
They're going into other names, particularly the mag seven that you know, the setup looks better. So all I'm saying is that the sentiment couldn't be that much worse than it is.
Now, could be that much worse, but it's actually only about four percent off of its record high in terms of that share price still worth more than three trillion dollars. Is this just going to be sideways trading there? For Jordan, we sort of priced in some of that anxiety.
Yeah, that's a great point, and that's kind of what I was noting today that you know, who would have guessed Apple's shares are up seventeen percent this year. It's a little below the market, but it's better than a lot of other names, particularly in software. It's better than Google,
It's actually better than Microsoft. So I think again that shows you positioning and sentiment is already down, and every time we get a new update or we get closer to the earnings report later in October, I think the surprise to the downside factor gets more and more priced in or expected. So again, yeah, it could be an underperformer and a laggard, but I don't think it's going to all of a sudden derate and trade down Materially. I think there's a lot of people who might buy the stock of it.
Ever got closer to two hundred dollars Mizooo.
Jordan Kline getting a lot calls thanks for answering Areth today. Meanwhile, hon Hi Tech Day twenty twenty four is kicking off tomorrow and the company plans to showcase how the group has introduced AI applications into their platforms.
It makes Anamal Drudez has.
More iPhones that kindle, Nintendo switch even ring doorbells. FOXCN is making these and more. Assembling the devices, mostly in China has allowed the company to build an enormous business, generating nearly two hundred billion dollars in revenue last year, but the market for many types of electronics and particularly smartphones, is maturing. Fox Con wants to move up the value chain to products that generate better profits. AI servers is
one area where it's making progress. Sales have risen as FOXCN works with the likes of Nvidia, Microsoft, and Amazon on artificial intelligence infrastructure. Semiconductors is another field, with the focus right now mostly on older, less sophisticated chips. At present, these mostly go toward in house needs, including EVS. This is an additional space where the Taiwanese company wants to compete with a value proposition similar to what a one
stoled Apple. Fox con can build part or all of your car in less time and at lower cost.
We believes that this contractive and design manufacturing service go same away as smartphones laptops, so we will have forty to forty five percent machumer features.
Goldman Sachs says e the outsourcing could be worth more than one hundred and forty billion dollars by the end of the decade, but with fox Con still to sign on a major customer, its grandest auto ambitions are yet to be realized.
That was Bloomberg's Annabel drowlers on on hiblically traded arm of the company we all know as Fox Common. Now coming up, ar glasses maker x Reel expands its retail footprint around the world. We're going to speak to its CEO Chizu. That's coming up next. This is Bloomberg Technology. The lack of a rebuttal in Ubersoft's response to recent takeover speculation by Tencent suggests the door is open to a potential buyout. How a Bloomberg Intelligence research points to
potential regulatory hurdles given the current geobilistical backdrop. Let's get out to Bloomberg's Benoir Bertilo, who's in Paris and actually ben war I think this morning we have heard from Ubisoft who have issued a statement about the reporting. Just summarize what they said.
Yeah, so they basically said that the ubisoftis used to review its strategic options.
That's options plural.
And they didn't say more on the report and now talks for take a private report with ten cents, but they just said that they are indeed basically working on options. They also said the management was working on its current strategy.
And remind us of what the strategy might be when share price has halved, and that's obviously why perhaps it assesses options.
Yeah, they said they would focus on the open world games. That's a point that's been difficult for them recently because they released the Star Wars game that was an open world game that didn't work very well, and the next one, the big one assa since scret Shadow has been pushed back to February. So it doesn't say much on their
strategic options right now. Just we understand that the talks are underway and today actually the company didn't really lose the gain that he'd saw on the markets on Friday, which says a lot. But now everyone is sort of waiting for the next step.
We keep an eye currently. Was just finishing the day a little bit lower three point eight percent. Benuir Bertilo, We thank you so much.
Now.
Shares of Nikon surging the most in two months, after it was disclosed that Esselo Luxotica has taken a five point one percent steak now.
According to a.
Filing, the iewear maker began accumulating Nikon shares in early August. The move marks a backing of lens technology as the rise of smart wearable emergers now. Earlier this year, Nicon said it plans to invest more than six hundred million dollars by twenty thirty to bolster it's lenses and.
Other offerings.
Stay in the realm of smart wearables AR glasses make at x Reel has announced it will expand its in store retail presence offering sales across Europe, Asia and the United States. Here with more is chi zoo x Real CEO and co founder. And what we're talking about is the air to pro and beam, which is basically the puck that goes with it to connect whatever compute device you want into the augmented reality glasses. Let's start with
the news, which is you're backing physical retail. Do you want people to go into a store, pick up the glasses and buy them? Why? Why that strategy?
Okay, so previously you know our product is available on Amazon or some other online channels. Right, this is such a new kind of cool gadget. We want the people actually can go to their nearby store and try it for themselves.
I see that pin on your lapel. Yeah, I know where that's from. Meta connect, That's right. So you know, I've tried the Orion Meta A glasses. The technology difference between what Meta announced last week and what you're doing is that basically you can cast another device into your glasses, it doesn't have its own operating system. Yep. How much of a limitation is that for you? You know, where do you want to take x reel to compete with oryan, which isn't going to be sold in its current form?
Right?
That's right? Yep.
So first of all, you know, you have to give a lot of credit to Meta and even Snapchat, you know, from those big tech companies get into this space. This is very important. That kind of validates the future of the entire AR market. On the other hand, you know, what we are trying to do is can we actually deliver some kind of product that people can use.
Today, not the future, not several years ahead.
So that's why the kind of product strategy we're taking is, you know, instead of giving a fully spatial computing display that is more complicated running their own operating system, can we ist provide maybe a spatial display kind of a philosophy who can easily use our glasses like air to pro like also just look like a sunglasses this way right, so they can easily plug into your cell phone, your tablets,
or your even laptop handhold gaming devices. So does instantly turned into in my opinion, a much bigger high resolution virtual display, and feedback has been phenomenal. I mean I saw people actually going from those traditional two D flat screens to those kind of virtual displays.
What's interesting, people are buying these in numbers.
Four hundred thirty thousand I think was the number we shared on the screen. You've got forty seven percent of market share. Where are they buying them? Where is the consumer for you? Is it more China based, Asia based or is it in the US too?
Oh?
Actually this is a global footprint. So yes, as you mentioned, we're nearly half of the entire global market share, and people are using that for media consumption, so they can stream like movies and also they can play games. Connecting this to steam deck or switch is a good way to go. And actually people are even there is too laptop for productivity and some other activities.
Okay, so what then of manufacturing? Where are these being made At the moment. You are headquartered over in China, but you are a global company with a global footprint, but where exactly are these being supplied from?
So right now this is a manufacturer actually in the same kind of a plant, adds the hypor vision prole They're manufacturing in China, and you know, we want to leverage that kind of manufacturer capability and the efficiency being in China especially, you know, for this kind of a new industry at a very elesage.
Chizu y CEO of x Rael, really great to have you here with us in San Francisco. A mixed out look for Netflix on Wall Street. The streaming giant was downgraded to underweight from equal weight of Barkley's, but upgraded to overweight from neutral at Piper Sandler. Barkleays is questioning the company's valuation as Piper sand gets bullish on momentum from its advertising strategy. Netflix reports earnings next Thursday.
Carol tak into the theaters because boy, it was a rough start for the Joker sequel. The Warner brother film opened at forty million dollars in sales, much lower than the projected sixty million dollars and the film cost, of course, Warner Brothers one hundred and ninety million to make. Let's discussed bluemokes Hannah Miller with what went wrong?
Why did no one rush to go and see it?
Yeah, so they really gave director Todd Phillips free reign with this movie, and it seems like it went a bit over the top. There's been a lot of negative word of mouth reviews and critics are not liking it. So we think that cut into people seeing it in theaters this past weekend.
The bar was high because the First Joker almost hit one hundred million in its opening weekend and did eventually gross a billion. So there's that. If anyone watching bluemog Technology saw it and loved it, you know where to find us. We welcome your feedback. Is it the whole movie theater versus streaming debate, the battle for eyeballs in a busy weekend?
You know, I think we have seen some successes in recent months, you know, June two, Beetlejuice, Beetle Juice, you know, those were both Warner Brothers movies that did really well. You know, there obviously is this fight to get eyeballs away from streaming and people back into theaters.
And this was a huge miss.
You know, people were expecting this to live up to the expectations that Joker set in twenty nineteen.
People also have short attention spans. I think the film's more than two hours long, isn't it?
It is?
And I think people were taken aback that this is a musical that Lady Gaga is going to be singing, and there are songs and it's not as gritty as maybe the first one was.
You were saying that to everyone's surprised that it was a musical at all. But there is some fist competition. People are going and seeing other stuff what has got people electrified?
Yeah, I mean people are into the Wild Robot film. I think people are kind of looking for more positive stuff that they can enjoy go to with their families.
Yeah, so it'll be interesting.
To see, you know, as we get closer to the holiday season, how movies fare in theaters.
And this comes obviously as Hollywood itself reels from strike action. A lot of that to do with what we talk about day and day out artificial intelligence, and they're like, where did this movie get made and how and was it a synonymous to that issue.
Yeah, So with this film, there was a lot of anticipation, you know, around it. It was filmed in New York, Los Angeles and even New Jersey. There was a lot of excitement. People loved Joaquin Phoenix as the Joker in the first one, and I think it just kind of got out of proportion. You know, it's very dramatic. There's a lot of courtroom drama scenes versus you know, the crime that we saw in Gotham in the first one. So I don't think it's appealing to people the same way.
Anamella, resident critic for US and everything about the movies. Now, that does it for this edition of New By Technology.
And yeah recap on the podcast. You know exactly where to find it. Big thanks and shout out to the team in New York City and the crew out here in San francisc Go. This is Bluembo Technology
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