Samsung Electronics tips record first-quarter profit, beating expectations

SEOUL (Reuters) – Samsung Electronics Co Ltd (005930.KS) tipped a surprise record first-quarter profit on Friday as analysts said strong chip margins and the early launch of its flagship Galaxy S9 smartphone likely masked broader weakness in the mobile market.

The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong-Ji

The global semiconductor leader and Apple Inc (AAPL.O) smartphone rival forecast its January-March profit to leap 57.6 percent from a year earlier to 15.6 trillion won ($14.7 billion), beating an average forecast of 14.5 trillion won from a Thomson Reuters survey of 21 analysts.

Revenue for the quarter was tipped to rise 18.7 percent to 60 trillion won, Samsung said in a regulatory filing.

The South Korean company did not elaborate on its performance and will disclose detailed earnings in late April.

“Even if profits start falling in the second half, Samsung will have a strong balance sheet this year,” said Song Myung-sup, analyst at HI Investment & Securities.

Analysts expected the chip division to continue to drive profits, after contributing an estimated 10.7 trillion won to first-quarter earnings.

Lower costs and strong demand for DRAM chips used in servers have fattened the division’s margins, putting Samsung on track for record annual earnings amid expectations of tight supply for the remainder of the year.

The mobile business also appeared to have made a surprisingly solid contribution to first-quarter earnings, analysts said, despite a broader slowdown in global smartphone sales.

They put this down to Samsung’s early launch of its premium Galaxy S9 device as well as healthy sales of older models as consumers balk at the high price-tags on the latest premium models.

“DRAM prices were good, so the chips division could have earned more than the market expected. But there was probably some upside in the mobile business,” said Greg Roh, analyst at HMC Investment & Securities.

The S9, which began selling in most markets in mid-March, launched a full five weeks before its predecessor S8 in 2017.

Worldwide smartphone shipment volumes shrank for the first time in 2017, according to data from industry tracker IDC, as steep prices for high-end models and slowing innovation prompted consumers to delay purchasing upgrades.

Concerns about the smartphone market and a subsequent fall in demand for components like OLED screens – used in Apple’s iPhone X – are behind a roughly 4.4 percent fall in Samsung Electronics’ share price so far this year, from a record high in November.

Samsung shares fell 2.3 percent on Friday after the earnings guidance, compared to a 0.7 percent drop in the wider market. .KS11

DRAM prices and the performance of the flagship Galaxy S9 smartphone launched in March will be other key variables for Samsung going forward.

“The Galaxy S9 series will face headwinds that are affecting all premium smartphone makers,” research firm Strategy Analytics told Reuters last week.

($1 = 1,061.5100 won)

Reporting by Joyce Lee; Additional reporting by Ju-min Park; Editing by Stephen Coates

Facebook CEO Mark Zuckerberg Admits ‘Huge Mistake’ But Will Not Step Down

Facebook CEO Mark Zuckerberg admitted to making a “huge mistake” by failing to sufficiently consider how bad actors could abuse the social networking service, but he said that he has no plans to step down.

Zuckerberg said during a press briefing on Wednesday that he takes responsibility for a series of crises plaguing his service over the past year. These include the spread of fake news by Russian trolls and the alleged exploitation of Facebook user data by political consulting firm Cambridge Analytica to influence the 2016 U.S. presidential election.

“I think life is about learning from the mistakes and figuring out what you need to do to move forward,” Zuckerberg said. “The reality of a lot of this is, when you’re building something like Facebook that is unprecedented in the world, there are going to be things that you mess up.”

Despite the high-profile stumbles, Zuckerberg says he remains the best person to lead Facebook. When asked whether Facebook’s board has discussed whether he should step down, Zuckerberg said, “Not that I’m aware of.” He added that no Facebook employee has been fired in light of the Cambridge Analytica scandal, which the company said could impact up to 87 million Facebook users—an increase from earlier reports of 50 million.

“I started this place, I run it, I am responsible for what happens here,” Zuckerberg said. “I’m not looking to throw anyone under the bus for mistakes that we made here.”

But the fact that the question about his tenure even came up shows how embattled the one-time Silicon Valley darling is. For example, angry users are campaigning to get others to delete their Facebook accounts, which Zuckerberg said on Wednesday has had little impact.

“But look, it’s not good,” he conceded. “We don’t want anyone to be unhappy with our services.”

Meanwhile, the Federal Trade Commission has started investigating Facebook’s data handling policies while some lawmakers are calling for tougher privacy laws. Next week, Zuckerberg is scheduled to appear at a likely testy Congressional hearing that will cover Facebook’s privacy problems.

On Wednesday, Facebook added fuel to the fire by disclosing that “malicious actors” had abused a feature to likely scrape the public profile information of the company’s two billion users. Facebook said it has now disabled that feature.

For the past year, Zuckerberg said that Facebook has been undergoing an internal reckoning over its growing influence on world affairs. While the company has long focused on the benefits of its social network like connecting family members and helping small businesses grow, Facebook executives mistakenly overlooked its platform’s negative effects, he said.

“It’s clear now we didn’t focus enough on abuse,” Zuckerberg said. “We didn’t take a broad enough view in what our responsibility is.”

He added, “That was a huge mistake, that was my mistake.”

Zuckerberg reiterated a series of changes Facebook has made to deal with a number of its current controversies. They include partnering with news organizations to fact-check news articles before major elections and further limiting the amount of data third-party developers can obtain by building apps on Facebook.

He also said that Facebook plans to increase the number of staff working on security issues to 20,000 people by the end of the year, to do things like ferret out fake accounts created by Russian trolls. However, Zuckerberg conceded that addressing Facebook’s many problems won’t be a quick fix, and that Facebook is “probably a year into a massive three-year push” to implement changes.

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“I wish that I could snap my fingers and in three months or six months have solved all of these issues,” Zuckerberg said. “But, I just think the reality is given how complex Facebook is and how many systems there are, and how we need to rethink our relationship with people about our responsibility there across every single part of what we do, I do think this is a multi-year effort.”

He described it as a “big shift” for Facebook to take “more responsibility” for how bad actors use its service. “My hope is by the end of this year, we’ll have turned a corner on a lot of these issues and people see things are getting a lot better,” he said.

Why Apple May Dump Intel’s Chips For Its Own

When Apple announced a shift from IBM and Motorola’s PowerPC chips in 2005, competitors using Intel’s chips in their computers had a big edge in performance. Today, some of Apple laptops that are built with Intel chips are getting trounced.

And it’s Apple’s own mobile chips inside iPhones and iPads that are doing the trouncing. That’s why it makes sense for Apple shift again, away from Intel to chips of its own design.

On Monday, Bloomberg reported that Apple had decided to use its own chips in its computers starting as soon as 2020. The effort, code named Kalamata, is still in an early developmental stage, Bloomberg reported, but it has spooked Intel’s investors. Fortune reached out to Apple for comment and will update this story if a response is received. Intel declined to comment.

Shares of Intel plunged 6% to close at $48.92 on Monday. But even with the sharp drop, the stock’s price remains higher than it was just six weeks ago.

The would-be rationale for Apple’s new chip strategy is to allow its mobile products and computers to work together more seamlessly. But there’s also the increasingly embarrassing performance issue. Last year’s iPad Pro models using Apple’s homemade A10X processor (which is based on designs from ARM Holding) outperformed the company’s 13″ MacBook Pro laptops, which had Intel i7 chips, on some benchmark tests. Apple’s more recent A11 Bionic chip used in the iPhone X and iPhone 8 had even higher benchmark scores.

Intel’s many efforts to build chips for mobile devices have never caught on, despite billions of dollars of losses. And now it faces the prospect that its PC chips will also be surpassed by rivals spawned from the mobile arena.

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Apple has been growing its chip design capability since the Steve Jobs-era, when the company bought PA Semi for $278 million in 2008. Since then, Apple has built an all-star team of chip designers, currently led by Johny Srouji.

The homegrown chips allowed Apple to replace Qualcomm processor chips from iPhones years ago and more recently replace graphics processing chips in the devices from Imagination Technologies Group. Apple doesn’t appear to own the patents to make its own mobile modem chips, an area in which it has increasingly been shifting from Qualcomm (qcom) to chips made by Intel in an effort to cut costs.

But despite all of Apple’s chip switching, a complete transition from Intel would take time. In 2005, Apple’s biggest challenge in swapping chip designs was rewriting all of its software to operate better with Intel’s chips. This time around, in addition to having to tweak its software, Apple would also have to develop a line of chips for desktop and laptop computers. Its homegrown mobile chips are the equal of chips used in its slowest laptops, but the company has never publicly shown that any of its chips could run its most cutting edge laptops, let alone the 18-core Xeon Intel behemoth at the core of its iMac Pro.

Rumors of Apple dumping Intel have surfaced periodically, not coincidentally around times when the two companies negotiated new deals, industry analyst Patrick Moorhead, president of Moor Insights, noted on Twitter. “Doesn’t mean untrue but usually means it’s negotiation time,” he wrote.” I could imagine a few amped up iOS-based MacBooks, but not a wholesale 2020 change to all Macs.”

The loss of Apple’s (aapl) business alone should be manageable for Intel (intc). Macs accounted for less than $4 billion of Intel’s annual revenue, or less than 6% of the company’s $65 billion of expected sales this year, analyst Michael McConnell at Keybanc pointed out in a report on Monday.

This New Way of Relieving Your Stress is Literally All the Rage (And Only $35)

Have you ever been so angry that you wanted to smash something? You wouldn’t be alone. Hundreds of people want to do the same. Entrepreneur Donna Alexander capitalized on this trend in 2011 with her novel idea: the anger room (also known as the ‘rage room’).

Anger / Rage Rooms

For a mere $25, you can take a weapon and break as many things as you want. Participants can choose bats, golf clubs, and pipes to destroy dishes, lamps, printers, plates, and other items. Plus, it only usually takes a few minutes.

According to Alexander, most people only last about two or three minutes. She says she offers up to 25 minutes, but that nobody has gone for that long.

The business started out as five-minute sessions for $5 in her garage. The room’s popularity grew thanks to word-of-mouth, and Alexander kept relocating to larger spaces. It’s become a big hit in Dallas, Texas with people who need to vent their frustrations.

Most people have a lot of bottled up stress in their daily lives – terrible bosses, long commutes, faulty technology, student loans, marital problems – the list goes on. Alexander said the service was especially popular during holidays and elections. She made sure to stock the much-requested Donald Trump and Hillary Clinton mannequins (come on, that’s pretty funny…)

However, any civilized adult can’t just throw a temper tantrum in public lest you want to be remembered like Bob Knight. Someone might slam their fist on the desk or hit a wall, but these small acts hardly feel satisfying. Letting loose your inner rage can make a significant difference.

Science Support it, Too

It might seem unhealthy at first, but so is bottling up anger. One meta-analysis of 22 studies and over 6,000 subjects found that repressing emotions led to greater stress and anxiety. Patients who bottled their feelings saw increases in heart rate, blood pressure, and cortisol.

Similarly, couples who argue healthily are likelier to stay together. Spouses who suppress their feelings suffer from a higher mortality rate.

Some psychologists worry that an anger room might reinforce bad habits and that people should seek healthier alternatives such as meditation or exercise. It’s true that smashing objects isn’t as healthy as going for a run, but one can’t deny how useful it is to blow off steam. Just make sure that breaking things isn’t your go-to option every time you feel frustrated.

Pent-up rage isn’t something that can always be resolved rationally. Sometimes you need to let it all out. 

Alexander says she never sees people leave angrier than they came. She says that sometimes people need a safe space to release their emotions without fear of being judged.

So, get out there and go break something. Your brain will thank you for it. 

Here Are a Few Reasons Why Donald Trump Is Taking Aim at Amazon

President Donald Trump this weekend renewed his long-running attacks on Amazon and its owner, Jeff Bezos. Trump’s criticisms are wide-ranging, and at least some of them seem deeply flawed. So what’s really driving the President’s hostility towards the e-commerce giant?

Most fundamentally, Trump’s attacks on Amazon are in line with his populist politics. In a Thursday tweet, Trump said Amazon was “putting many thousands of retailers out of business!”

There’s plenty of evidence for this view, as retailers nationwide close stores and declare bankruptcy in droves. Retail jobs have declined in rural areas, where Trump’s support is strongest. But there has been some pushback against the idea that retail as a whole is in trouble, or that Amazon can be blamed — the stores that are closing or shrinking often have unrelated problems.

And even if Amazon is putting more pressure on brick-and-mortar stores, it’s not at all clear that this is the disaster Trump frames it as. A generation ago, competition from Walmart was decimating smaller retailers and retail jobs — but also lowering prices with its focus on efficiency. Amazon, by the same token, beats traditional retailers by making the process of shopping more efficient. That the President would object to this seems to reflect a view of capitalism as a zero-sum game, rather than one in which efficiency and innovation ultimately benefit everyone. It’s the same worldview that has led him to push for more restrictive international trade rules, and to defend inefficient, outdated coal-derived energy.

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As part of his multi-pronged attack, Trump has also repeatedly claimed that Amazon is gaming the system by getting preferential rates from the U.S. Postal Service. That criticism appears to be based on a 2017 Citigroup analysis, but that finding applied to all packages, not just Amazon’s. Even then, the claim relies on some selective interpretations of USPS’s cost structure. Trump’s claim that Amazon pays “little or no taxes to state & local governments” is even less rooted in reality — Amazon collects sales tax in 45 states.

So there’s room for debate over some of Trump’s criticisms of Amazon. But Trump’s last big critique is more fundamentally worrying. On Saturday, the President reiterated claims that the Washington Post, which is owned by Amazon founder and CEO Jeff Bezos, is “used as a ‘lobbyist’” that pushes Amazon’s agenda. In fact, the Post has published significant negative coverage of Amazon, and there’s no evidence that Bezos interferes with the newspaper’s coverage.

That suggests Trump’s attack on the Post could be read as a more sophisticated repetition of his blunt attempts to discredit critical reporting as “fake news.” And in fact, Trump’s latest round of anti-Amazon venting came immediately after a Post report detailing multiple investigations into the Trump Organization’s finances.

There is one other possible motivation for Trump’s long-running hatred of Amazon — personal resentment of Jeff Bezos. Trump has consistently shown a deep attraction to straightforward signals of power and success. As a developer, it was famously reflected in his love of gaudy décor. As President, it has been reflected in his tall, super-wealthy, and militarized cabinet picks. For a man who sees the world in such simplified terms, it must be deeply galling to face an opponent who is as much as 40 times richer. It’s hard to imagine Trump doesn’t take some pleasure in watching that gap close every time he lambasts Bezos’s company.

The Top Books You Need to Read to Make Your Marketing Timeless

In terms of marketing, being overwhelmed by the amount of content online can become as common as driving past a McDonald’s. The sheer volume of online courses, e-books, YouTube tutorials and more can cause one to nearly go numb trying to keep up and retain all of the information.

Yet, many people forget there are some principles of marketing that almost certainly won’t change in our lifetimes or in the centuries ahead. Why? Well, because marketing is driven by psychology, and the human brain doesn’t evolve overnight.

Here are four timeless books that changed my life, business and marketing for the better, and, if read and absorbed, can do the same for you.

The 22 Immutable Laws of Marketing by Al Ries and Jack Trout

When talking about having a long-lasting impact with your marketing, it’s only right we kick off this list with The 22 Immutable Laws of Marketing. The amount of simple yet brilliant principles Ries and Trout lay out in this book are game-changing and have stood the test of time.

When it comes to marketing, this book started it all for me. I was working as an intern at a startup and aimlessly trying to decide on my career path. I tried project management, computer science, sales and more, but none felt like the right fit.

I had always been a storyteller, and after reading this book, it hit me that all of marketing can be boiled down to stories and principles of human behavior. That began my love affair with the industry, and we’ve been going strong ever since.

Jab, Jab, Jab, Right Hook by Gary Vaynerchuk

Jab, Jab, Jab, Right Hook should be required reading for any and all marketing professionals. The main reason being that many people approach online interactions and in-person interactions differently when they should be treated exactly the same way.

You wouldn’t ask a potential girlfriend or boyfriend to go on vacation with you after the first date (at least, I hope not). Yet, for whatever reason, across social media and beyond we see people asking for a prospect’s time or money without giving an adequate amount of value to earn those things.

This was the book that led to me writing my first viral, breakthrough article, which then led to me launching my business, landing my column, securing speaking gigs and more. The epiphany I had was simple: play the “long game” by adding value to my readers, month after month, year after year. Only after I build that trust up should I ask them for anything in exchange.

Hooked by Nir Eyal

Hooked by Nir Eyal is another book overflowing with priceless information on consumer psychology. Eyal takes an approach focused on modern-day companies like Twitter and Instagram. If you’re interested in learning how tech giants reel in and retain their users using psychology, Nir’s bestseller will be a book for you.

Most of the examples Eyal uses in Hooked are based on products, not outgoing marketing materials. I began to recognize that marketing was a facet of every piece of the business from the product to the elevator pitch, so I could add value to all parts of my client’s businesses.

Influence by Robert Cialdini

Robert Cialdini’s book has remained a favorite amongst entrepreneurs, sales and marketing professionals and more since it was published in 1984. After reading just a few pages, you’ll realize why. The enduring principles Cialdini delivers in Influence are aspects of the human psyche that are hard-wired into us, and aren’t going away any time soon.

This book was gifted to me by a former manager who I consider the closest thing to a mentor I’ve ever had, and it couldn’t have come at a better time. I was working a fast-growing startup in San Francisco while building my startup, Arctiphi, on the side. I wanted things to move faster so I could go full-time into my business, but sales was never my forte. I lacked the confidence, the body language, damn near everything I thought made a great salesperson great.

After reading the book, I realized the way I was thinking of sales was all wrong. The packaging didn’t matter nearly as much as the product. Marketing and sales were brother and sister, not distant cousins, and the same tactics I was using in my copywriting could be applied to in-person sales, public speaking and more.

It worked. Within a few months of reading Influence, monthly revenue increased sixfold and I was able to go full-time into Arctiphi.

There are many marketing principles that’ll remain true for centuries to come. By equipping yourself with these timeless principles instead of “keeping up with the marketing Joneses” daily, you’ll position your brand to stay relevant no matter what the world throws at it.

Facebook’s Troubles Underscore Blockchains’ Opportunity

Status updates. Likes. Photo uploads. Friend requests. DMs. Tags. Clicks. Views.

Every action you perform on Facebook—and its sister services like Instagram and WhatsApp—surrenders data to the business’ well-oiled surveillance machinery. Maintaining a presence on the social network means granting the company the right to steward—and sell—your personal information to advertisers. It’s been said a zillion times, but it bears reiterating: If you’re not paying, you’re the product.

Why should Facebook rake in tens of billions of dollars a year on the backs of its 2 billion-plus user base? It’s the people’s data, after all. Shouldn’t they—I mean, we—benefit from it?

In the inaugural episode of Balancing The Ledger, Fortune’s new show covering all things fintech-, crypto-, and blockchain-related, Fortune digital editor Andrew Nusca discusses the potential for distributed, blockchain-based social networks to displace Facebook, alongside senior writers Robert Hackett and Jen Wieczner. After the recent Cambridge Analytica controversy, which involved a political consultancy misappropriating and misusing people’s data in an attempt to influence the 2016 presidential election, Facebook has come under intense fire. A fomenting #deletefacebook campaign has attracted the likes of billionaire Elon Musk and, poignantly, Brian Acton, an entrepreneur who made billions on his sale of WhatsApp to Facebook in 2014, among others.

“Right now there’s a groundswell of people who want something else,” Nusca said.

“If you could only keep control of your data with blockchain technology, then this is a way so you wouldn’t have to give it over to companies like Facebook,” said Wieczner, noting that centralized entities are exactly what blockchains were invented to get around. Using such tools might mean people would “not have to entrust [data] to these companies who have proven time and time again that they cannot be trusted with your data.”

To be sure, blockchain-based alternatives are a ways away from toppling Facebook, one of the world’s most valuable corporations. Some of the most popular distributed ledger platforms, like Bitcoin and Ethereum, still have numerous issues to figure out—not least among them how to scale. But these technologies are under active development, and could, perhaps, become standard in time to come.

For now, if you delete or deactivate Facebook, you’ll likely have to deal with being a little out of the loop among friends and family. “It’s kind of a difficult thing here to get a bunch of users on board with a new technology,” as Hackett noted. But if blockchain-based projects can latch onto network effects, similar to the ones that turbo-boosted Facebook’s growth, without coming apart at the seams, then they just might provide the basis for the next paradigm in social networking.

For more on the latest finance and tech news—plus interviews with special guests and industry experts—tune into ‘Balancing The Ledger’ every Friday at 11 a.m. ET. You can also follow The Ledger on Twitter and sign up for our upcoming newsletter here.

Even as Bitcoin Languishes, Telegram Raises $1.7 Billion Ahead of Largest ICO Ever

Even while the fervor for cryptocurrency poster child Bitcoin cools, investors are still piling onto what’s expected to be the largest initial coin offering (ICO) yet—that of messaging app Telegram.

The five-year-old company, which has attracted users by touting its encrypted-messaging service, raised $850 million from 94 accredited investors in a Securities and Exchange Commission filing late Thursday. That doubles a previous raise first disclosed in mid-February, adding up to a total of $1.7 billion raised by the firm incorporated in the British Virgin Islands.

And the fundraising might not stop there.

“The issuers may pursue one or more subsequent offerings,” the Thursday filing read.

The interest in Telegram, though, comes at a time when the price of Bitcoin is plummeting to new lows for 2018. Once as high as $20,000 in December, the cryptocurrency fell 6% to $6,600 on Friday.

Telegram did not respond to requests for comment from Fortune.

The firm is thought to be using the proceeds from the private funding rounds to build a blockchain network, the Telegram Open Network (TON). The network would allow Telegram’s 200 million users to pay for services on that blockchain, using the cryptocurrency Gram.

The fundraising comes at a time when the SEC has grown increasingly wary of ICOs. The Wall Street Journal reported in late February that the SEC had issued dozens of subpoenas to cryptocurrency-related firms.

The SEC declined to comment.

Jaguar's New F-Pace SUV Is Fast, Sporty, and Expensive

Like any good Hollywood blockbuster, Jaguar’s F-Pace was made with sequels in mind. So it’s no surprise that now, two years after the company started delivering its first SUV to customers, Jaguar has rolled out the F-Pace SVR, an extra-fancy, extra-powerful version of a vehicle that was pretty fancy and powerful to begin with.

“When we were creating the core F-Pace vehicle, we always had in the back of our minds what changes we would want to make to deliver an SVR version,” says Wayne Burgess, who leads the team that designs all of Jaguar’s production vehicles.

The big change with this car—unveiled this week at the New York International Auto Show—is under the hood, where Jag swapped in a supercharged, 5-liter V8 with 550 horsepower. That’s enough to hit a top speed of 176 mph and go from 0 to 60 mph in 4.1 seconds. It’s a significant upgrade from the original, which produces 247 horsepower from a four-cylinder engine, or 340 hp from a V6. But ask the man who designed the thing, and he’ll point you to all sorts of other changes.

“New front bumper, new bonnet vents, new front fenders, new rockers, new wheels, new brakes, new rear bumper, new exhaust system, and a new rear spoiler,” Burgess says.

Changes like vents in the hood and bigger, 22-inch tires make for a sportier looking car, but Burgess says most are there for a practical reason: When you give a car the ability to get near 200 mph, you want to make sure it stays stable. More rubber on the road helps with that. The tire change also accounts for the wider wheel arch claddings, sticking out a bit from the side of the car to properly cover the wheels, as the regulators require.

The vents come from a lesson the company learned while designing the SVR version of Jaguar’s F-Type coupe. “The amount of air being rammed into the engine bay at 150 plus was creating under-bonnet pressure,” Burgess says. Closer to 200 mph, it was enough to lift the front end of the car—bad news for stability and aerodynamics. “You’ve got to manage the airflow out of the engine bay.”

Other features that seemed helpful in Jaguar’s computer simulations for the F-Pace SVR didn’t quite work as expected: As Jaguar played with prototypes of the SVR, engineers discovered the air ducts near the front wheels and at the rear of the car were actually disrupting airflow, so those got filled up (the ones in the back now house extra brake lights). But hey, they still look cool.

Inside, the biggest change from the original F-Pace fits into the driver’s right hand (or left, on Jag’s side of the pond). Burgess’ team dumped the standard rotary shifter, the half-inch tall disc that you twist to move between drive, park, reverse, and so on. The SVR gets a “trigger” shifter, which drivers move backward and forward, so they can easily shift gears when they don’t feel like letting the automatic transmission do its thing. (Paddle shifters cater to those who prefer keeping both hands on the wheel.)

And, like so many sequels that are bigger, brasher, and louder than the original, the F-Pace SVR costs more money than the first F-Pace, which started at $42,065. If you’re looking to enjoy this picture, get ready to drop $79,990 at the box office.

More New Cars

Facebook's Election Safeguards Are Still a Work in Progress

Nearly three years after a Russian propaganda group infiltrated Facebook and other tech platforms in hopes of seeding chaos in the 2016 US election, Facebook has more fully detailed its plan to protect elections around the world.

In a call with reporters Thursday, Facebook executives elaborated on their use of human moderators, third-party fact checkers, and automation to catch fake accounts, foreign interference, fake news, and to increase transparency in political ads. The company has made some concrete strides, and has promised to double its safety and security team to 20,000 people this year. And yet, as midterm races heat up in states across America, and elections overseas come and go, many of these well-meaning tools remain a work in progress.

“None of us can turn back the clock, but we are all responsible for making sure the same kind of attack on our democracy does not happen again,” Guy Rosen, Facebook’s vice president of product management said on the call. “And we are taking our role in that effort very, very seriously.”

Facebook provided some new details about previously announced strategies to counter election meddling. The company announced, for instance, that its long promised advertisement transparency tool, which will allow people to see the ads that any given Facebook page has purchased, will be available globally this summer. In addition to that public portal, Facebook will require anyone seeking to place political ads in the United States to first provide a copy of their government-issued ID and a mailing address. Facebook will then mail the would-be advertiser a special access code at that address, and require the advertiser to disclose what candidate or organization they’re advertising on behalf of. Once the ads are live, they’ll include a “paid for by” label, similar to the disclosures on televised political ads.

While this process may prevent people from purchasing phony ads that are explicitly about an election, however, it doesn’t apply to issue-based ads. That leaves open a huge loophole for bad actors, including the Russian propagandists whose ads often focused on stoking tensions around issues like police brutality or immigration, rather than promoting candidates. This process is also currently exclusive to the United States.

“We recognize this is a place to start and will work with outside experts to make it better,” Rob Leathern, Facebook’s product management director said on the call. “We also look forward to bringing unprecedented advertising transparency to other countries and other political races.”

The executives also detailed their approach to spotting fake accounts and false news before their influence spreads. One strategy involves partnering with third-party organizations that can vet suspicious news stories. Facebook has already announced a partnership with the Associated Press in the United States. When stories are flagged as potentially false, either by Facebook users or the company’s own technology, they’re sent to the fact-checkers. When the story is deemed to be false, Facebook lowers its likelihood of appearing in people’s News Feeds; Facebook product manager Tessa Lyons says a “false” rating reduces a story’s News Feed distribution by 80 percent.

Critically, this process applies to photos and videos, not just text. The company has also begun notifying people who have shared the stories that the contents are suspect. Those who continue to see the story in their feeds will also see related articles that fact check the piece. Facebook currently has these fact-checking partnerships in six countries, with plans to expand.

This is a long way from Facebook executives’ past claims that they should not be the “arbiters of truth,” a common refrain among tech giants. But as international regulators bear down on Facebook to acknowledge its past mistakes and prevent them in the future, the company is reluctantly taking more responsibility for monitoring the information on its platform—if only to ward off government intervention.

There’s some evidence it’s working. Facebook is now on the lookout for foreign meddling in elections around the world, in part by automatically looking at the country of origin creating a given Facebook page, and analyzing whether that page is spreading “inauthentic civic content.” Those pages get manually reviewed by Facebook’s security team. The strategy has already proven effective; Facebook discovered during last year’s special election in Alabama that Macedonian hoaxers were setting up pages to disseminate fake news, a practice that country became known for during the 2016 election.

“We’ve since used this in many places around the world, such as in the Italian election, and we’ll deploy it moving forward for elections around the globe, including the US midterms,” said Samidh Chakrabarti, a Facebook product manager.

These approaches are promising, but far from comprehensive. They also don’t address the simultaneous scandal engulfing Facebook right now: The company has historically done little to prevent its users’ data from falling into the wrong hands. That valuable information can be used to target people in ways that Facebook has no control over.

Perhaps the most worrisome part of Facebook’s plan to defend democracy, though, is that it has yet to be battle tested. If it fails, we may not know until it’s too late.

Facebook 2018

eCommerce Has Changed The Way We Shop. Here's 3 Reasons Why Your Online Business Isn't Growing

With the world at our fingertips, many of us may take for granted how easy it is to buy and receive on demand. Online shopping has left an indelible footprint on society that goes far beyond the ability to buy an item at midnight while in our pajamas. Here are three of the biggest effects eCommerce has had on consumer lives and how businesses operate. If you’re selling product online (and not taking this into account) – growth may be harder for you.

You’re Not Social Or Digital First

There have been significant changes in how companies reach customers. The brand-consumer interaction is no longer solely through mass media. Digital marketing campaigns have the ability to target people where they spend the most time – online. We can no longer read email, check social media, play online games, use apps or even catch up on the news without being exposed to ads that are tailored to our specific interests and buying habits.  

Shopping itself also has become a different social interaction. Rather than a single conversation in a store, people share their opinions with multitudes of friends and followers via social media and online review sites. This immediate access to other customers’ experience can be beneficial if your brand is receiving particularly good service or your advocates enjoy your brand’s products.

Online retail has also created a new shopping event – the unboxing. People watch videos of someone – often a complete stranger – open a package and express their joy or disappointment. These vloggers and web personalities are influencers, and depending on their popularity and reach, can become valued marketing partners for a brand who wishes to reach a specific audience.  

You’re Not Leveraging New Digital Economy Opportunities

With the power of the Internet, smaller businesses now have the ability to reach consumers on a national and even global scale. At the same time – they also have the ability to reach highly-niches audiences.  This ability to leverage digital to reach a large group of a particular niche audience is one of the powers of online business.

With e-retailers becoming more prominent, ancillary businesses that specialize in key functions, such as fulfillment, logistics, and warehousing, have grown to create their own sub-industry. The rise of fulfillment centers has contributed to the 355,000 jobs created in the eCommerce sector since 2007. This now the time to find where you fit in in this eCommerce game. If you aren’t adapting to the host of new industries and sub-industries created – you may be missing out on ways to grow new revenue streams and create your unique legacy in the field.

You’re Not Leveraging Data To  Personalize The Customer Experience

With convenience playing a defining role in how shoppers make a decision, companies can now connect with consumers via purchase and browsing history, interests and even location. Using this data, brands can target product suggestions and promotional deals, for a greater customer experience and increased sales.

A personal customer experience extends to allowing consumers to shop and interact however they prefer via an omnichannel experience. With the combination of online, physical and mobile channels, today’s shoppers are free to mix and match outlets based on their needs, such as buy online and pick up or return in store.

These are but three ways eCommerce has changed the way people shop and how businesses operate. As online buying continues to grow, your business should be constantly thinking of ways to stay aware of the trends and ahead of the curve.   

For more information on how to grow your eCommerce business, download our EMERGE EBOOK here.

Netflix Adds Former Obama National Security Advisor and U.N. Ambassador Susan Rice to Board

Netflix’s board now includes Susan Rice, the former United Nations ambassador and National Security Advisor under President Barack Obama.

The appointment, announced on Wednesday, Netflix, gives the video streaming giant a high-profile former government official at a time of increased regulatory scrutiny of some of the nation’s biggest technology companies. Facebook (fb) and Google (goog), for example, face increasing concerns about their influence and handling of consumer data.

While Netflix (nflx) has not been one of the tech giants politicians have singled out in recent months over privacy or antitrust issues, it is generally considered to be among an elite group that includes Facebook, Amazon (amzn), and Google. Shares in the companies have recently reached all-time highs, although they have retreated in recent days.

Rice’s tenure as a U.N. ambassador could also come in handy as Netflix continues to push heavily into international markets.

“We are delighted to welcome Ambassador Rice to the Netflix board,” Netflix CEO Reed Hastings said in a statement. “For decades, she has tackled difficult, complex global issues with intelligence, integrity and insight and we look forward to benefiting from her experience and wisdom.”

Other members of Netflix’s board include Microsoft president and chief legal officer Brad Smith, executive chairman of Zillow Group Richard Barton, and former co-chair of Disney Media Anne Sweeney.

Last year, President Donald Trump insinuated without citing evidence that Rice may have illegally attempted to learn the identities of Trump associates for political purposes, The New York Times reported. In an interview with MSNBC, Rice called the president’s accusations “absolutely false.”

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Netflix’s shares fell about 3.7% in midday trading on Wednesday to $290 as part of a broader sell off of tech stocks.

Waymo Expands Its Robo-Fleet with Electric Jaguar SUVs

The self-driving car industry is in the final miles of a grueling marathon to bring autonomous technology to market. Uber needs autonomous tech to offer ride-hailing services sans human drivers. GM bought Cruise and put autonomous Chevy Bolts on the roads of San Francisco in an effort to remain relevant when people stop buying private cars. If Tesla can cross the line first, it could disrupt the other guys and even offer its own ride-sharing service.

And ahead of them all is Waymo. After nearly a decade of R&D, the company that started life as Google’s self-driving car project has shifted its focus from tech to operations—from development to deployment. The Alphabet subsidiary says it will launch its first commercial, driverless service later this year, in Arizona. It already has the permit. All of which makes it the irritatingly fresh-looking guy, in a dayglow tank-top, taking big bouncing strides at the front of the running pack.

Today, Waymo announced it’s partnering with Jaguar Land Rover to build autonomous versions of the electric I-Pace SUV. “It’s going to be the world’s first premium, electric, fully self-driving car,” says John Krafcik, CEO of Waymo. That sounds like a claim Elon Musk would love to be able to make about Tesla.

Waymo plans to buy 20,000 of the vehicles over the next couple years, do extensive testing and validation, and then fully integration them into its passenger-carrying fleet by 2020. The company says the new cars will be able to offer a million trips per day. It’s a huge expansion for Waymo, which has around 600 vehicles on the roads now, and an existing partnership with Chrysler for “thousands” more minivans.

Waymo is launching its debut service in Arizona, thanks to relaxed legislation and good weather. But Uber’s recent crash in Tempe—one of its cars killed a pedestrian pushing a bike across the street—raises questions about the ethics and wisdom of testing on public roads. Earlier today, Governor Doug Ducey indefinitely barred Uber’s robo-cars from testing in the state.

“We have confidence in our system,” says Krafcik. “We continue to work very closely with regulators, but there should be no question about the care we take, and the redundancy we have.” He cites the five million autonomous miles his firm has driven in 25 cities, plus five billion miles in simulations, when defending the decision to let his vehicles loose on public streets.

This is the sixth vehicle that Waymo has outfitted with sensors, from the Prius, to the most recent Chrysler Pacifica, and it’s getting pretty slick with the styling. The autonomous I-Pace prototype the company unveiled on stage ahead of the New York Auto Show doesn’t ruin the hunky lines of Jaguar’s SUV too much. Waymo and Jaguar have condensed the lidar laser scanners, radar, and cameras, needed to perceive the world around the car, into a streamlined roof box with a black bulge on the top, which looks like the spinning light on a 1970s cop car. The only other giveaways are lumpy sensors over the front wheels, and some less-than-subtle badging.

Jaguar, for its part, gets a large chunk of guaranteed sales and a chance to look like it’s at the forefront of this emerging technology. The company is involved with separate self-driving trials with the UK Autodrive Project, a three year test of connected and autonomous cars.

The British company launched the I-Pace earlier this year. It’s fully electric, with a 95kWh battery, and a range of 240 miles. It can sprint to 60 mph in just 4.5 seconds, and makes a compelling alternative to Tesla’s Model X. (Just don’t expect the robot to floor the accelerator.) The range is enough for any average commuter, but for a self-driving vehicle aiming to offer up to 50 rides a day, it may be a limiting factor. The hardware required to enable robo-driving is also power intensive—all the extra sensors and the chips in the supercomputers on board suck down electrons.

On the other hand, Jaguar advertises an 80 percent top-up in 40 minutes. “One thing that attracted us to the I-Pace is the quick recharge time,” says Kafcik. “We can get through the peak duty cycle of a rush hour, and then do a quick top-off charge to get us through the rest of the day.”

Learning how to manage a fleet of electric vehicles, or who to partner with, is another valuable insight Waymo will gain, and it’s one that other players will need to learn if countries like the UK, India, Norway, and China, go through with plans to ban the sales of internal combustion engines. As well as just needing outlets, self-driving cars will have to be capable of hooking up to power with no human help. That could be achieved with wireless charger (just park over a particular spot, like throwing your phone on a charging pad), or more creepy looking concepts like Tesla’s robotic snake cable charger.

As for the passengers, a ride in a Jag might be fun at first. But dramatic as it currently sounds, a ride in a vehicle with no human in control quickly becomes mundane. People in the back get over the novelty of an empty drivers’ seat quickly and resume normal passenger behavior, like looking at their phones, or napping, even as they cruise down the highway to the future.

Driving on My Own

  • Self-driving cars are coming. Here’s WIRED’s complete guide to the tech

  • Most of the big players are using humans to train and supervise their autonomous cars. But there’s a grim irony in that; humans are terrible drivers

  • Instead of blindly welcoming self-driving cars to their streets, city leaders could prevent tragedies like the Uber fatality from happening again.

This iTunes Store Error Message Suddenly Started Plaguing Apple iOS Users Worldwide

Apple has reported outages for the iTunes Store, the App Store and other systems after customers reported receiving error messages.

Several Apple customers and iOS users tweeted at Apple Support on Tuesday to find out why they were repeatedly receiving messages saying “The iTunes Store is unable to process purchases at this time” — especially when no one was attempting to buy any applications. Users reported getting the pop-up message while trying to open apps on their iPhones.

Apple’s System Status page reports outages for Apple TV, the iBooks Store, the iTunes Store, iTune U, the App Store and the Volume Purchase Program. Each outage report says the ongoing issues started affecting some users at 3:04 p.m. Those affected will be unable to access the platforms and make purchases until the problems are resolved. Apple did not immediately respond to a request for comment.

Apple Support said on Twitter that it will update the System Status page with any new information.

Update: Apple’s System Status page reports that the issues were resolved at 4:49 p.m.

Tesla: The Moment Of Truth Is Approaching


Tesla’s Moment Of Truth Is Approaching

Tesla (TSLA) is an extraordinarily innovative company that has achieved amazing results in several sectors in a relatively short time frame. Let’s face it, if it weren’t for Tesla, EVs would still be limited to the likes of the Leaf and the Prius. The company also has achieved some remarkable feats in power generation and energy storage. Tesla is a company that looks to the future and shows us that things could be done smarter, more efficiently, and better than the current status quo can offer. But despite Tesla’s drive to continuously move forward and push the envelope on what’s possible, the company remains plagued by numerous problems.

It is easy to write these off as mere transient issues that will easily be offset and eclipsed by the company’s amazing products and stunning growth. However, Tesla is a publicly traded company with a fiduciary duty to its shareholders. Therefore, any significant issues facing the company that could cause the share price to decline significantly should be carefully examined, especially for anyone thinking of investing in the stock.

I have been bullish on Tesla for a long time, have been long its stock for most of the time throughout the last five years, and I continue to think that Tesla will be worth significantly more five years from now. But in the short term, there are some clear concerns that could cause some volatility to transpire in Tesla’s shares.

The stock is trading right around crucial technical support at roughly $300. The most recent decline comes on the back of a scathing Goldman Sachs’ downgrade. Moreover, the stock is technically in bear market territory as Tesla is off by well over 20% from recent highs. There’s an increasing number of fundamental elements weighing on Tesla’s share price, and the all-important Model 3 production appears to be hitting numerous speed bumps. In addition to all these developments, the company will announce delivery numbers for Q1 in the first week of April.


So, will $300 hold, will the stock rebound and move higher from here, or are Tesla shares headed for a breakdown instead? And what about longer term? Is there any hope for the company at all, and why in the world is Tesla worth $50 billion?

Model 3 Rampup

The Model 3 Rampup is likely one of the most important production efforts ever. It is certainly the most crucial manufacturing process in Tesla’s history as a company. A true EV, affordable, capable, and stylish, the likes of which have never been seen before. However, the rollout process has been anything but smooth, plagued by various problems and numerous delays.

Going by the company’s own original estimates, Tesla should be cranking out Model 3s at around 10,000 units per week by now. Even the drastically revised estimates call for about 2,500 units by now. What’s Tesla producing right now? While the true number remains a mystery, going by Bloomberg’s Model 3 tracker, the company is averaging around 750 Model 3 vehicles per week right now. This is drastically lower than even some of the most bearish estimates and suggests the company is on track to produce just 8,000 Model 3s this quarter.


Tesla was originally shooting for 500,000 Model 3s this year, but even with a constructive rampup from here, the company will likely only produce about 100,000. This is a huge difference, revenue-wise, performance-wise, confidence-wise, etc. But perhaps, most important is the increased pressure subpar production efforts of the Model 3 are inflicting on Tesla’s already fragile bottom line.

Tesla has managed to record just one profitable quarter in its near 10-year history as a publicly traded company. Moreover, the latest quarterly results have been showing massive losses, especially since the Model 3s troubled production process began. How much in losses? Well, nearly $1.3 billion in the last two quarters alone. What will the losses look like in Q1? Same ballpark, minus $500 million or worse. Why are the losses so great? Because the Model 3 production process is intended to be highly automated, efficient, and profitable, with an intermediate-term gross margin rate of 25%.

Unfortunately, so far, the production process has proven to be anything but highly efficient and profitable. And the longer Tesla continues to struggle with various “bottlenecks,” automation issues, and other problems associated with the Model 3 assembly, it will continue to burn through cash at an alarming pace. What’s Tesla’s gross margin on the Model 3 right now? Once again, the exact number remains a mystery, but judging by the company’s recent performance and estimates, gross margin on the Model 3 is close to zero, low single digits, or possibly even negative in a worst-case scenario.

When will Model 3 production improve to where the company is producing a profit, or is at least close to producing a profit on the vehicle? This too remains a mystery, but it must happen relatively soon if Tesla is to remain a viable business enterprise. My optimistic view is that the company will have most of the Model 3 issues figured out by the end of this year and will have a Model 3 gross margin close to 20% by early 2019.

Model S/X Sales

Another issue to consider is the apparent slowdown in Model S/X sales this quarter. Tesla said that it aims to deliver roughly 100,000 Model S/X vehicles this year, about the same as last year. The company also claimed that while demand remained strong for these vehicles, production capacity was constrained due to increased resources being diverted to the Model 3 vehicle.


According to, Tesla sold about 8,400 Model S and Model X vehicles in the U.S. in the first two months of this year. This is lower than last year’s figure of 8,800 Model S/X vehicles for the same time frame. Since about 60% of Tesla Model S/X sales come from the U.S., we can assume the company sold around 15,000 Model S/X vehicles in total in the first two months. By adding around 50% to account for March sales, this would give us approximately 22,500 Model S/X units for Q1. This is lower than last year’s 25,000 units and will make it very difficult for Tesla to achieve its target of 100,000 Model S/X vehicles this year.

Goldman Downgrade

This brings us to the recent Goldman Sachs downgrade. Tesla analysts at Goldman led by David Tamberrino recently reiterated their sell rating on Tesla with a $205 price target. The analysts expect Model 3 issues to drag out and call for just 7,000 Model 3 vehicles in Q1. Moreover, analysts predict lower Model S/X sales, a yoy decline of around 12%. Average consensus estimates are much rosier and call for nearly 14,000 Model 3s in Q1 and extremely robust sales of over 25,000 Model S/X sales in Q1.

The stock has gotten hammered since the note. Tesla is down eight out of nine trading days, with the price slumping by roughly 15% in this period alone. Furthermore, some investors could begin to lose a certain degree of confidence in the company, which could result in a further decline for Tesla’s share price. How much of a decline? Let’s look at the chart to get a better idea of where we are at and where we could be headed in Tesla’s stock.

Technical View

TSLA is currently sitting at major support of $290-300. This is a crucial level, as the stock has bounced off this level several times, and has not breached this support since penetrating it to the upside about a year ago. The RSI, CCI, and full stochastic suggest that conditions are approaching oversold levels. However, if the stock falls through this crucial support, a significant leg lower is likely to materialize.

It’s Not All Bad, There’s Some Good News as Well

Autopilot Upgrade

Tesla owners seem to be very pleased with the recent autopilot improvements. The common reaction appears to be that it feels much more natural and is very much akin to a human-like driving experience. Tesla remains at the cutting edge of AI. Therefore, it is not surprising that its self-driving program is yielding increasingly favorable results. Tesla also is one of the top destinations for IT specialists. Therefore, it is likely that the company will continue to be one of the predominant leaders in this space.

Model 3 Sales

There’s so much riding on the Model 3, and the production process could be a double-edged sword, so to say. Meaning that despite the discouraging Bloomberg estimates, they are still estimates. In addition, Tesla shut down Model 3 production for four days recently to make upgrades to the production process. Therefore, despite the overall “low number” of Model 3s produced this quarter, the actual production of the vehicle could be approaching Tesla’s revised target rate of 2,500 vehicles per week.


Does Tesla Deserve a $50 billion Valuation?

Whether Tesla’s stock is grossly overvalued or not remains a hot topic for debate. It depends on if you believe Tesla will ultimately make significant profits on its vehicles. It is often said that it is absurd that Tesla is valued at more than Ford (F). At first glance, this argument makes sense as Tesla sold about 100,000 vehicles in 2017 while Ford sold 6.6 million. Moreover, Tesla delivered just $11.7 billion in sales while Ford clocked in about $145 billion. Finally, Tesla lost nearly $2 billion while Ford reported a net income of about $7.6 billion.

Let’s look at the situation from a slightly different perspective, though. Ford’s average selling price for a car was just $22,000 in 2017. The company had a gross margin of 10%, and a profit margin of about 5%, indicating the company nets about $1,100 per vehicle.

We know that in the intermediate term, Tesla is shooting for a gross margin of 25% on the Model 3. With an average selling price of about $47,500 per vehicle, Tesla would have a gross profit of about $11,875 per vehicle to Ford’s $2,200. Moreover, if we assume Tesla can earn a net income of about 12.5%, (half of its gross margin per vehicle) Tesla would earn about $6,000 per a Model 3, or more than 5 times what Ford makes per a vehicle. This means Tesla could earn nearly as much as Ford by just selling 1 million Model 3s per year. This is not considering Model S/X sales, energy generation/storage, Tesla Semi, or any other future products.

By looking at the situation from this perspective, and by assuming that Tesla will be able to achieve its margin goals, it becomes very clear that Tesla has the potential to become enormously profitable within the next few years. Whether this actually happens remains to be seen, but this should give people an idea why the market is currently valuing Tesla at $50 billion. It is on the assumption that the company will become profitable and will be able to achieve target margin goals at some point in the next few years. Based on the underlying statistics, ultimately (within the next 3-5 years), Tesla could be valued at much more than $50 billion.

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Disclaimer: This article expresses solely my opinions, is produced for informational purposes only, and is not a recommendation to buy or sell any securities. Investing comes with risk to loss of principal. Please always conduct your own research and consider your investment decisions very carefully.

Disclosure: I am/we are long TSLA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.