Morning Toast 12 Sept
Last week witnessed a decline in all three major indexes, but for those seeking promising signs, consider turning your attention to the cannabis sector. Despite experiencing significant losses throughout the year, cannabis stocks, such as Canopy Growth, have seen a remarkable upturn in the past week. This surge can be attributed to recent government initiatives aimed at enhancing financial transparency within the industry. Notably, Senate Banking Chair Sherrod Brown announced last Wednesday that an agreement regarding cannabis banking legislation was on the verge of being reached.
Twenty-five years ago, when Google was founded, it was merely a small player in the vast landscape of web search possibilities.
Fast forward to the present day, and Google commands a staggering 90% share of the search engine market. The question of whether it achieved this monopolistic status through illicit means lies at the heart of an imminent, high-stakes antitrust trial.
U.S. et al. v. Google stands as the most significant monopoly trial for the U.S. government since 1998 when Microsoft, under Bill Gates's leadership, faced legal action over its anti-competitive practices. The outcome of this trial could potentially reshape the power dynamics of Silicon Valley, an arena where tech firms are already grappling with the once-in-a-generation disruption brought about by AI. It promises to be a dramatic affair.
The government's argument centres on Google's agreements with hardware manufacturers, particularly its deal with Apple, which designates Google as the default search engine on iPhones and other devices. The Department of Justice contends that these multi-billion dollar arrangements, renewed annually, constitute an unlawful exploitation of Google's monopoly to stifle competition from rival search engines.
As anyone familiar with behavioural economics understands, opting out of the default choice requires substantial effort.
For instance, an executive at the privacy-focused search engine DuckDuckGo pointed out that an Android smartphone user would need to navigate through 15 steps to set DuckDuckGo as the default search engine. Nevertheless, Google asserts that its partnerships with other tech companies do not violate antitrust laws because, despite the extra clicks, users can still choose an alternative default search engine.
During the ten-week trial, prominent figures from the business world, including Google CEO Sundar Pichai and Apple executives, will provide firsthand insights into the tech industry.
Even if Google manages to prevail against the government's challenge, as Microsoft and IBM did in the past, it's unlikely that Pichai will be extending warm wishes to anyone after the verdict. The trial represents a costly distraction that could potentially dent Google's long-term growth prospects. After all, who has ever been highly productive with someone constantly looking over their shoulder?
Qualcomm's Prolonged Partnership with Apple
Experts have been actively discussing Qualcomm, the chipmaker, in light of its recent announcement to extend the supply of 5G modems to Apple's smartphones until 2026. This announcement surprised many, as Wall Street analysts and Qualcomm officials had previously anticipated Apple's intent to develop and implement its own 5G modem technology by 2024. With Apple gearing up to unveil its new iPhones featuring Qualcomm modems, on Tuesday, the market responded favourably, leading to a 3.9% surge in Qualcomm's stock price on Monday.
Significance of the Extended Agreement
The extended collaboration between Qualcomm and Apple holds significant implications for both companies. By continuing to provide 5G modems to Apple, Qualcomm solidifies its position as a pivotal player in the smartphone market. This agreement secures a consistent revenue stream for Qualcomm and reinforces its technological prowess in the realm of 5G technology.
Apple's Strategic Decision
For Apple, the choice to rely on Qualcomm's modems underscores the company's acknowledgement of Qualcomm's technological superiority in this domain. By utilizing Qualcomm's modems, Apple can offer its customers a seamless 5G experience without the need for substantial investments in developing its proprietary modem technology.
Positive Market Reception
The market's enthusiastic reaction to this news reflects investor confidence in Qualcomm's extended partnership with Apple. The 3.9% surge in Qualcomm's stock price signifies that investors perceive this collaboration as a significant triumph for Qualcomm, bolstering its standing in the market and enhancing its growth prospects.
The United Kingdom has reaffirmed its dedication to global climate action by pledging USD $2 billion (£1.62 billion) to the second Green Climate Fund (GCF-2) replenishment. Prime Minister Rishi Sunak announced this during the G20 Leaders' Summit held in New Delhi on September 9, 2023.
The UK has steadfastly supported the GCF, having contributed to the Fund since its initial resource mobilization phase. Notably, the UK's commitment for GCF-2 marks a significant 12.7% increase from its initial pledge for the first replenishment (GCF-1), during which it contributed £1.44 billion for the period of 2020-2023.
The Green Climate Fund expresses its warm appreciation for the UK's generous contribution and unwavering support, reflecting the country's dedication to global climate action. The UK joins a group of early pledgers for GCF-2, which includes Czechia, Austria, Germany, Monaco, Canada, Denmark, and South Korea. This commitment adds momentum as the GCF approaches its High-Level Pledging Conference scheduled for October 5, 2023, in Bonn, Germany.
Following the G20 Summit, Andrew Mitchell, Minister for Development, emphasized, "The Green Climate Fund plays a critical role in global efforts to combat climate change and mitigate its impacts. Our increased pledge of US$2 billion to the GCF underscores our unwavering commitment to addressing climate change."
Quote Of The Day
“Without environmental sustainability, economic stability and social cohesion cannot be achieved.”
– Phil Harding, Archaeologist
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