• The scene is set for WWDC to be the launchpad for Apple’s ambitions in AI and given its history in this area, almost anything will represent a significant improvement.
• To be fair to Apple, its products already use AI but it’s the sort of AI that runs in the background which makes the user experience better, but no one is really aware that it is there.
• Good examples of this would be the excellent algorithm that optimises battery utilisation based on usage patterns and the AI that is used to improve its photography functionality.
• However, it is here where the confusion begins because, once again, everyone is getting mixed up when it comes to what actually is AI.
• In 2016 everyone thought that AI meant deep learning and in 2024 everyone thinks that AI means generative AI but the reality is very different.
• Artificial Intelligence is a broad church in that it encompasses everything from simple statistical analysis, software, deep learning and now generative AI.
• Apple has been using deep learning in its products for some time and in some specific areas, to great effect.
• However, where it has come up short is in AI-powered systems that interact directly with the user.
• These are agents like Siri, Alexa Google Assistant and now ChatGPT, Claude 3 and here Apple appears to be way behind.
• This is supported by the fact that Siri has been 3^rd rate for years and Apple has done very little to improve it since most people lost interest in digital personal assistants over 5 years ago.
• However, all that changed in 2022 when Open AI launched a chat system that could converse extremely well in natural language even if it does have a tendency to make things up.
• Since then, hype has gone to fever pitch and now all of the big ecosystems are under pressure to offer generative AI to their users or face having their users go elsewhere.
• Whether this is a real reflection of the true state of affairs has yet to be seen.
• This has put Apple in a difficult position as it clearly was unprepared for the rise of generative AI and its secrecy means that it never usually speaks about anything before it launches.
• I am not convinced that it has anything ready to go and so the keynote at WWDC may contain commentary aimed at placating those screaming for generative AI on iOS without actually launching a generative AI chatbot.
• I think that the most likely outcome will be a promise to upgrade to Siri such that it is powered by generative AI which is precisely what Amazon has done with Alexa.
• The only issue here is that Siri is currently implemented on the device whereas Alexa is completely in the cloud and given that generative AI at the edge is in its infancy, I suspect that Siri would have to return to the cloud.
• I suspect that Apple will also focus on generative AI in computational photography which is something that Google through Samsung has done quite successfully.
• This would mean adding functions like moving objects within a picture, making them bigger, filling in missing areas and so on.
• This would seem to be the most sensible approach and would involve talking about long-term Siri evolution and then adding some useful and cool features that users can actually get some utility from now.
• Generative AI is all the rage, but there is still a lot of uncertainty in terms of how a generative AI chatbot will make one’s digital life on a smartphone better.
• Consequently, I think Apple will talk a good game on generative AI at WWDC, but the features launched are likely to be focused on computational photography which has an immediate use case and which its competition is already featuring.
• I continue to think that Apple’s weakness in AI generally is not going to hurt demand for its products yet which gives it some time to get its offering in line.
• Should the AI bubble burst and interest flag, then this would be a net positive for Apple giving it more time to get its offering right and it would have to pay less for talent and equipment.
• Apple remains expensive for a company facing the multiple challenges of no growth, China and AI weaknesses and so I remain unexcited about taking a position.

• Google’s loss to Epic when Apple won for pretty much the same issue makes very little sense and is a demonstration of how much going to court can be a roll of the dice.
• A federal jury in San Francisco has determined that Google illegally prevented competition for its Google Play app store and payment mechanism.
• Although the legal situation between this case and the case against Apple is quite different, the dispute that is being adjudicated is pretty much the same.
• Google and Apple dominate the mobile ecosystem and via their app stores, they control the distribution of apps to billions of users and take a cut of all the revenue that developers earn.
• Epic has argued that this is unfair and that a lack of competition results in higher prices for developers and consumers.
• The irony here is that it is possible to get other app stores on Google Android while Apple does not allow it and somehow Google loses its case and Apple wins.
• The net result is that there is going to be some ongoing pressure on the traditional 30% / 70% split of revenues, and I think that it will gradually erode over time.
• However, the real lesson here is that going all the way in the legal process ends up in a roll of the dice with settlement almost always being the better option.

Apple vs Beeper – just buy an iPhone.

• Apple is up to its old tricks once again by disabling workarounds that allow iMessage to work on Android ahead of bringing its own version via the RCS standard in 2024.
• Apple has disabled the ability of a cross-platform messaging system called Beeper to access and exchange messages with users of iMessage claiming that the “privacy” and “security” of its users were at stake.
• This argument makes no sense at all as the existing system of dropping down to SMS is less secure than the workaround that Beeper was using and I think this is all about protecting iMessage as a reason to buy an iPhone.
• Apple has said as much on numerous occasions by commenting “Just buy an iPhone” when asked about the lack of interoperability between iOS and Android for iMessage.
• Apple has form in this area and in the past has killed apps and services of 3^rd parties ahead of launching its own versions of the same service again saying that its versions are safer and more private.
• Although iMessage should now be available on Android via RCS in 2024, it is very likely to be not as good and lacks some of the newest and most popular features of the iOS version.
• Apple monetises its ecosystem via hardware meaning that it has no incentive to offer full and seamless interoperability and this state of affairs is not going to change any time soon.

• Google is clearly still on the back foot, but the sense of panic and disarray has gone to be replaced with a sense of purpose and its hardware division has finally come up with a compelling product.
• Unsurprisingly, the whole show was all about generative AI and how Google is not the laggard that the market seems to think it is and how it will use it to make its products better.
  • First, models: Google announced its next foundation model which is imaginatively named PaLM 2 (pathways language model) upon which it is going to base most of its services.
  • PaLM 2 is a foundation model which means it serves as a starting point from which to train other models to do specific tasks like a medical knowledge base or be a chatbot like Bard.
  • While Google declined to give details on PaLM 2 it did say that it would be available in a range of sizes, the smallest of which it says will be able to run a mobile device.
  • Besides augmenting productivity, it is also being included in consumer services which are now open for anyone to experiment with.
  • Top of the list here is Bard which is already running on PaLM 2 and can link to other systems such as Adobe Firefly to also generate images.
  • This is an interesting development and fires the starting gun on the next ecosystem battle where chat providers fight with each other to be the best LLM on which to base one’s service or plugin.
  • Second, productivity: Here Google is doing precisely the same thing as Microsoft and including generative AI in its office-like apps that make it easier and faster to create content.
  • Bard will now be able to create spreadsheets, tables and slides but also search through all of the user’s data and easily find what is being searched for.
  • This functionality runs on the device or within the user’s private space on Google Cloud so that there is no data leakage or insecurity.
  • Microsoft has announced exactly the same thing and its dominance in productivity apps is likely to ensure that for as long as Google does not come up with something groundbreaking, its share will remain intact.
  • Third, the consumer ecosystem: Gmail, photos, maps etc will all be enhanced with generative AI to improve their usability.
  • From creating an effective complaint to moving objects around in photos and immersive route previews in maps, Google is trying to enhance its ecosystem services to keep both Android and iOS users engaged with its apps.
  • Fourth, Search: which is the current elephant in the room as the theme doing the rounds at the moment is that chatbots like ChatGPT make search obsolete.
  • The fact that pure generative AIs have to be frozen in time to prevent them from going crazy, makes them wholly unsuited for search which is why Google is going for a hybrid approach.
  • This approach will of course enable the current advertising model to continue, but it does make sense in its own right.
  • The generative AI gives a conversational answer to an enquiry, but this is also merged with the traditional search algorithm to give better results.
  • A good example given was an inquiry that starts with the user looking for a bike that is good for hills and a daily 3-mile commute.
  • Bard comes back with a paragraph about these sorts of bikes and the features or characteristics that such a bike would need to have but then follows it up with a list of potential products to consider.
  • Google has effectively merged generative AI and search and uses the conversational front end to provide a better user experience.
  • In my testing, I have found Bard to be better than Bing because Bing is relying on Bing Search to affect the search and then GPT-4 to formulate the answer while Bard uses the superior Google Search.
  • Hence, for the moment, there is no immediate threat to search, and Google has done a pretty good job of creating a product that both uses generative AI to give good answers but preserves its ability to monetise the data it collects.
  • Fifth, hardware: where Google typically launches a series of devices which amazing AI features that no one cares enough about to buy.
  • Furthermore, flaws in hardware routinely ensure that they receive mediocre reviews which further limits their sales.
  • However, Google has finally come up with a product that may appeal to many people.
  • The idea is simple (as all the best ideas are) which is the Pixel Tablet which comes with a magnetic wireless charging dock which massively enhances its functionality.
  • The dock provides a place to store the tablet (looks like Google Nest Hub) and ensures that it is always charged but when docked it automatically uses the speakers in the dock for sound.
  • It has Chromecast built-in and so it can be quickly used as a viewing, listening or video calling device and at the same time can serve as a hub from which to control all the smart devices in the home.
  • This is the first device that I think gives Google a shot at a hardware hit, but it remains to be seen whether it has made the usual errors in hardware that will limit its appeal.
  • I think that its $1800 folding Pixel is deeply uninteresting, offers very little that others do not and will not sell in any meaningful volume.
• The net result is that there was not a lot here that others are not already doing meaning that Google is playing catch up in terms of what it is making available for regular users to tinker with.
• That does not mean that Google is not a leader in AI behind the scenes, but it has been far more timid than its competitors in terms of getting its wares to market.
• This is because it has the most to lose in this space given its dominant position in search compared to Microsoft which has nothing to lose and can come in guns blazing (like Apple did in smartphones).
• This was a pretty good show after the disastrous Paris event where Google made itself look like a deer in the headlights and should go some way to allowing people to realise that Google still has a lot to offer in this space.
• That does not mean that I want to buy the stock but if it underperforms on the basis of losing its edge, it is one I would look at.

• Google has identified 18 zero-day vulnerabilities related to Samsung Exynos modems the four most serious of which would allow a hacker to take over a device simply by knowing its phone number.
• A range of Samsung devices, Vivo devices, the Pixel 6 and 7 and any device that uses the Exynos T5123 chipset are all affected and it is up to the individual device manufacturers to issue and install the patches required.
• Progress on this front has been pretty bad as so far only Google has issued a patch and it is a patch that fixes only one of the four vulnerabilities.
• This was included in the March 2023 security update meaning that Google’s devices remain exposed to the other three to which the best Google can come up with is to advise users to turn off WiFi and Voice over LTE (VoLTE) calling.
• Google is working as quickly as it can to come up with fixes for the other three serious (and 14 less serious) flaws but this is another sign of just how problematic hardware remains for Google.
• Google is used to a world where the software runs on its servers and users visit the server to execute the service.
• This means that when it needs to be updated, one pushes a button and it’s done.
• This has been a bugbear for Google for years as it has really struggled with the idea that devices using embedded software need to be updated individually and require user consent.
• It has also had great difficulty in getting the hardware right and has suffered from a number of blunders that could have been very easily avoided.
• This one is not necessarily of Google’s making but it could have chosen to go with Qualcomm or MediaTek for the modem neither of which have suffered from this issue as far as I know.
• This incident continues to reinforce my view that Google has no business making hardware just in the same way that Samsung has no business in making software.
• For example, Samsung makes some of the best-looking, well-designed laptops in the market today, but new users have to spend time deleting a series of useless and unwanted Samsung apps from the device after purchase.
• Google’s software on Pixel devices is generally extremely good but almost every year it is the hardware that lets this device series down.
• Consequently, I have long argued that Samsung and Google should collaborate much more closely if they want to come up with a device that can challenge the iPhone.
• Both Google and Samsung seem to think that they can do it on their own but as Apple slowly gains more and more market share, there is no evidence that this strategy is working.
• Furthermore, Google sells low volumes of Pixel devices meaning that the losses that the hardware business racks up every year are not going to be insignificant even for a company of Google’s size.
• In this environment, there is going to be pressure to do something about that red ink although, to be frank, I suspect that the majority of the waste and bloat is within the core search business.
• That is where Google could make real savings and it may need to if it wants to make the case that a generative AI offering for search is going to be so expensive to implement that it will be unable to compete.
• I still don’t like Google’s valuation but if the market panics about Google losing its edge in search to generative AI, then the shares could become very interesting.

• The new Indian OS for smartphones doesn’t really know what it wants to be, but I think it will appeal to government entities and enterprises with very little interest coming from consumers who have long since sold their digital souls to Google.
• BharOS is a new OS based on Android that has been developed by a government-backed start-up (JandK Operations) that is being touted as India’s answer to Android when in reality it is nothing of the kind.
• Furthermore, the way that this OS will be managed indicates that its creators have not really decided whether this is a super secure OS or if it is an attempt to go after the consumer digital ecosystem in India.
• For example, the best way to make Android secure is to lock it down completely with no installations or updates beyond those made at the factory being permitted.
• However, BharOS will focus on rapid OTA updates and will ship with nothing set by default with users being allowed to decide what to use for each of the Digital Life services where they live their digital lives.
• These apps will be provided by organisation-specific Private App Store Services (PASS) which have been curated and vetted to ensure that they are both secure and private.
• PASS appears to be an enterprise or government service where the entity issues devices to its employees who then install the apps that they need for the work that they do.
• It does not sound like anything that will remotely appeal to users in India, although a recent ruling will mean that Google will allow forked versions of Android to be built in India (see here).
• Hence in theory it is possible that we will see the Google Play Store appear on BharOS, but in practice, I suspect it is unlikely.
• In order for the Google Play Store to run properly, it needs all sorts of extensions not present in the base Android OS that form part of Google Mobile Services.
• Furthermore, app developers expect these extensions to be present on Android devices meaning that apps not specifically designed for BharOS that are installed may not work properly.
• The demands of users are also not going to help the case for BharOS as Google has India in an iron grip when it comes to the digital ecosystem.
• Six or seven years ago, Indian users were demanding Android devices but with the increase in penetration and use of Google services on Android, this has changed.
• Now users demand Google services and if a device does not have them, it is very unlikely that users will buy it.
• This is very similar to what happened to Huawei when it was no longer able to install the Google Ecosystem on its devices.
• Despite fantastic hardware at a good price, its share still fell off a cliff.
• Hence, I think that the only real chance that BharOS has is to become a secure and completely controllable OS that is used by government or companies to ensure the security and integrity of their services and data networks.
• Entities will also be able to ensure what is and what is not installed on their devices which will further increase BharOS’s appeal in the government and enterprise segment.
• However, this means that volumes will be low as I suspect that this will go nowhere with the consumer.
• This is because it is already much too late as Google has already conquered this market and users will not move unless they can take Google with them.
• Shots at the Indian consumer digital ecosystem have already been taken a couple of times (see here) and realistically only Jio Platforms has any chance of success with the consumer.
• This strategy involves using Meta Platforms’ and Google’s capital to increase penetration using Google and Facebook services but to then offer other services that they do not offer alongside them to entice usage, differentiation and revenues for Jio Platforms.
• Hence, I think BharOS will disappear into the world of enterprise software and I don’t expect to hear very much about it from here on.
• I do not see any threat on the horizon to Google’s dominance in India and should its share price continue to be hit with ChatGPT speculation, I would look to pick some up.

• AppLovin, a marketing and monetisation toolkit for app developers has offered to acquire Unity in a deal that looks defensive as it fears both the impact of greater vertical integration and the digital advertising slowdown on its ability to compete.
• AppLovin has both a set of marketing tools and a suite of 350 mobile games and competes directly with ironSource which Unity is in the process of acquiring.
• Unity has a platform for the development of apps that takes away the headache of porting to iOS, Android etc which it monetises through mobile advertising.
• Digital advertising is under pressure thanks to macro weakness which has pushed valuations down meaningfully making it more attractive to look at M&A.
• The industry has effectively admitted that consolidation is needed as Unity has already agreed to buy ironSource which will deepen its presence in digital advertising and allow it to monetise its Unity platform more widely and effectively.
• AppLovin clearly fears the impact that this combination will have on its ability to compete given how dominant Unity is in the space of mobile gaming.
• A large proportion of mobile games are created using Unity and should ironSource move in-house, this will create real problems for AppLovin as its clients who use Unity would have an incentive to switch.
• This is why I think AppLovin is willing to concede its sovereignty to Unity as it is proposing that 55% of Newco will be owned by Unity shareholders and that John Riccitiello from Unity ends up in charge.
• AppLovin is also making the termination of the ironSource acquisition which makes complete sense as merging all three together would create overlap which would then have to be eliminated.
• Given Unity’s sense of what it is worth, I suspect that it will reject this deal and press on with ironSource which will put AppLovin in a pretty tricky position.
• All of this noise has obscured the fact that both Unity and AppLovin have downgraded their revenue expectations for the full year highlighting that the blue-sky growth that investors are still paying for is not going to materialise to the degree expected.
• Hence, while I continue to believe that Unity has a unique position in the Metaverse (see here), it and all of its cohorts remain overvalued for the business case that they will address in the medium term.
• This is why the only way that these deals look any good is if they are paid for in shares as overvalued paper buying overvalued paper does not really matter very much in the long-term.
• I suspect this is why AppLovin’s proposal and Unity’s combination with ironSource are both all-stock transactions.
• Off the three, I think Unity is in the driving seat which combined with its positioning for the Metaverse (if it takes off) is why I want to own the shares long-term.
• I just think I will get an opportunity to own it much lower than here as valuations continue to be under pressure which is why I am quite content to wait.

• Another brave soul has decided to have a crack at the highly concentrated and brutally competitive smartphone market which, unless it has something pretty special up its sleeve, is going to end in another expensive disaster (like Essential).
• Last time around it was Andy Rubin’s start-up called Essential Products (see here) which raised $330m and burned it all on building a suite of interconnected products that were all supposed to work perfectly together.
• The problem was that none of them were essential meaning that no one bought them leading to an ignominious shut down in 2020.
• To be fair, and despite its name, Nothing has more going for it than Essential did.
• This is because its founder Carl Pei was a co-founder of the successful Chinese brand One-Plus and the company has already produced a set of wireless earbuds that have been well received, cheaply priced and sold around 500,000 units.
• The company also has credible backers with money coming from Alphabet’s ventures and Tony Fadell, one of Apple’s well-known former designers.
• This does not guarantee success and the company has a huge hill to climb when it comes to enticing users to buy its products.
• Android is an ocean of sameness and it is incredibly difficult to tell one device from another these days meaning that differentiation comes down to hardware specification and price.
• This is where Nothing is going to have difficulty because it is up against much bigger companies who can spend far more on R&D and then spread the cost of those investments over a much larger number of devices.
• Hence its ability to differentiate through cutting-edge technological innovation in smartphones is going to be very limited.
• One possibility is that Nothing differentiates itself by doing nothing at all which would be amusingly ironic.
• One of its main backers is Google meaning that it may have had the opportunity to implement Google’s version of Android with all of the latest bells and whistles.
• Given the likely price point, I don’t see this device competing directly with Pixel and so I don’t think that Google has much to lose by giving Nothing access to all of its latest software and AI innovations.
• All of the other Android handset makers insist on tweaking Android to fit their own requirements and strategies and very often end up making the device worse or filling it with bloatware that no one wants (eg Samsung Bixby).
• This is what I mean by doing nothing at all.
• Given the history of new entrants into this mature and crowded market, I am not optimistic that this venture is going to succeed because it has yet to demonstrate why anyone should buy its products.
• The choice of name also does not fill me with optimism as the company is already the but of endless jokes from the technology media who Nothing will need to recommend the device so that it sells in decent volumes.
• Nothing is the antithesis of Essential Products which had to live up to its name to succeed.
• Nothing must drastically fail this test to have a chance.

• Apple produced an ordinary performance but saw announcements that challenge both the vehicle makers and the fintech industry.
• However, there was nothing on the Metaverse clearly indicating that Apple is far from ready with anything confirming its position with Google and Microsoft at the back of the pack in RFM’s Metaverse research.
• Apple ploughed through its three main operating systems and one chipset with updates and features that had a few interesting tweaks but largely brought it up to date with productivity rival Microsoft and ecosystem rival Google.
  • First iOS 16: where the biggest upgrade was a rethink of the lock screen bringing customisability and widgets for easier access to data and events.
  • Elsewhere, there was a series of tweaks and upgrades that make the iPhone easier to use and more competitive when compared to what Google is able to offer with its first-class AI.
  • Maps, media sharing and notifications all received incremental upgrades but the areas of real interest were in wallet, payments and CarPlay which I have covered below.
  • Second, MacOS: Here, the headline was the new M2 chip which uses TSMC’s 2^nd generation 5nm process and has 25% more transistors than the M1 but only a slightly larger footprint.
  • This gives an 18% increase in CPU performance over the M1 at the same level of power consumption.
  • Similar improvements over the M1 were touted in graphics performance, making this a decent upgrade to the older chipset.
  • This will be available in an all-new MacBook Air which is thinner, lighter and more expensive than ever as well as the new MacBook Pro 13 inch.
  • macOS has been upgraded to a new version called Ventura where the focus is clearly on competing on productivity and ensuring that the Apple ecosystem of products works more seamlessly together.
  • This is key to driving loyalty to the ecosystem and I expect to see Apple continue to mash this button as hard as it can.
  • Third, WatchOS 9: comes with better data analysis from multiple sensors to offer coaching on running style and performance as well as upgrades to sleep tracking which brings it into line with other sleep trackers on the market.
  • Fourth: Home and Car: were by far the most interesting announcements.
  • HomeKit has been open-sourced to a standard called Matter in an admission that Apple’s closed proprietary approach does not always work.
  • The idea is to get many more products to work with Apple devices in the smart home and offer a better challenge to the dominant smart home ecosystem offered by Amazon.
  • Apple has also decided to extend CarPlay into the instrument cluster which adds the ability for users to access vehicle functions and data without ever leaving CarPlay.
  • Despite saying that car makers are excited about this new upgrade, I think that any vehicle maker in its right mind will feel precisely the opposite.
  • This is because this move further pushes vehicle makers out of their own devices and accelerates their transition to commoditised smartphones on wheels.
  • I see this as a declaration of war on the OEMs and elevates Apple to be just as threatening as Google to any digital aspirations that vehicle makers have.
  • I will cover the CarPlay announcements in more detail on Thursday 9^th September.
  • Fifth: payments: Apple also declared war on short-term fintech loan providers like Affirm and Klarna with the launch of Apple Pay Later.
  • This function will allow users to pay for purchases with 4 equal, interest-free payments over 6 weeks and will incur no fees.
  • This is really bad news for these players who likely now face tough competition from a huge and well-financed player.
  • Sixth, The Metaverse: of which there was not a single mention in either hardware or software despite feverish speculation in the tech and financial media.
  • This adds weight to my view that Apple is not even close to having anything ready for market and I am not expecting hardware before 2025.
  • The Metaverse remains a huge threat for Apple if it takes off in a big way, but it is so far away that there is no pressure for Apple to address this now.
  • Hence, I do not see its silence on this topic as an issue.
• This keynote launched more hardware than I was expecting but overall represents another steady upgrade to the best-in-class user experience that Apple uses to keep its users loyal.
• Many of the announcements bring it into line with that offered by others, but it manages to do it in a way that provides a better user experience overall.
• iOS and macOS continue to creep closer and closer together and I expect that pretty soon they will be one and the same although with slightly different tweaks like iOS and iPad OS.
• Apple has done enough here to keep its edge and I still do not see any viable challenge to its dominance of the high-end where it lives.

• 5G is missing in action at its own show but in many ways, this is a good thing.
• It means that there is no real controversy, problem or anything desperately exciting about 5G.
• It has dissolved into the background as it is being rolled out in volume and there will be around 1bn devices in circulation by the end of 2022.
• This is exactly what one wants as it is only when the technology stops getting in the way and it melts into the background does it really begin to be useful.
• The use cases for it where one has to have a 5G connection as opposed to 4G are still few and far between which means that it is in the economics where the difference needs to be found.
• At 2Ghz and up to 6Ghz frequencies, 5G offers better economics than 4G in terms of the cost per bit which is why some operators are offering incentives to get their subscribers onto 5G.
• This is particularly the case in the USA where unlimited data packages need to be aggressively cost optimised given fixed revenues and variable costs.
• Hence, 5G being absent at this show is a sign of it reaching the mainstream as everyone is focused on gossiping about other, more interesting topics.

Jolla – More hurricanes.

• Just when it looked like the hardy sailors at Jolla appeared to have found a safe harbour, the international disgust at the invasion of Ukraine has thrown the future of this company into doubt yet again.
• Jolla was born from Nokia’s attempts to create smartphones using Linux but has now found a home in the rapidly digitising automotive sector.
• The problem is that Rostelecom owns a significant stake in Jolla from the days when it did business in Russia and with the current situation, this turns Jolla into toxic waste.
• It means that its prospects of winning new customers and even the presence of its current partner, Daimler, are now in grave doubt.
• Jolla has been winding down its Russian operations during 2021 and has been seeking ways to reduce Rostelecom’s position but this strategic goal has become a critical issue requiring immediate attention.
• Consequently, Jolla needs Rostelecom to sell its stake in Jolla to a non-Russian entity as soon as possible.
• Fortunately, with Daimler as a partner and the accelerating trend of the digitisation of the vehicle, finding someone to take on the Rostelecom position is not the impossible task that it sounds.
• This is much easier than the position that British Petroleum finds itself in as it has to sell its Russian assets which will be much harder to do in this market.
• Jolla is a Finnish company that has an instinct for survival (see here) that puts an Emperor Penguin to shame which no one is going to object to having a shareholding in.
• Hence, I think Jolla will survive this latest calamity and will go on to have a good shot at the automobile where it is enabling Android apps to run on Linux or other vehicle software with no input or interference from Google (exactly what many OEMs want).

• The industry’s move to compete with iOS by improving its cross-device user experience is an old idea that has not really helped to date and is unlikely to do in the future.
• One of the undercurrents of CES 2022 was a move from a number of players to focus on making their devices work more seamlessly together.
• This is something that Apple does extremely well and is a significant reason why iPhone users go on to purchase other Apple products.
• Samsung has been trying and failing for many years to emulate this success largely because cross-device functionality is a software problem where Samsung has very little heritage.
• However, help is at hand as Google has been working on a series of features that are aimed at bringing the Google Ecosystem into line with Apple’s.
• The promise is that its devices will be seamless to set up, pair, unlock each other and switch audio back and forth.
• This will primarily be supported between Android devices, but the aim is to extend this to Windows PCs in an attempt to emulate the excellent cross-device functionality that Apple delivers across all of its devices.
• The problem is that the Google Ecosystem is not vertically integrated, and its hardware partners are constantly making tweaks to Android in order to try and eke out some differentiation over each other.
• The net result of this is that these cross-device functionalities never quite work as they are intended, and one only has to look at the release schedule put up by Google for evidence of that.
• Support from individual car makers is given as specific releases as is support from certain PC makers and Intel.
• This implies that each hardware maker has to decide to implement these features and then make software changes in order to support them.
• They are all likely to do it slightly differently meaning that the increased functionality and seamlessness that the Android ecosystem is searching for is unlikely to materialise.
• Furthermore, Samsung still uses multiple operating systems (Tizen for TVs) meaning that the same level of seamless interoperability will be even harder to achieve.
• Hence, I don’t think that the Android ecosystem is going to make much headway on competing with Apple as it remains too fragmented to compete effectively against a fully vertically integrated system.
• The net result is that this move by the Android ecosystem is unlikely to make a dent in Apple which continues to dominate the high-end of the market.
• I think that it will not be until there is a major shift in usage habits away from smartphones towards another device category that Apple faces any real risk, but this move is quite some time away.
• I remain pretty ambivalent to Apple where the current outlook looks pretty fully priced into the shares.
• The real action this year is likely to be among those which have struggled but still have a fundamental story and a relatively cheap valuation.
• Within big tech, Alibaba fits this billing the best while Nokia also looks interesting although it is much smaller in terms of market cap.
• I continue to hold both of these stocks.