A navigation map on the app of Chinese ride-hailing giant Didi is seen on a mobile phone in front of the app logo displayed in this illustration picture taken July 1, 2021.
Florence Lo | Reuters
GUANGZHOU, China — Rivals to Chinese ride-hailing giant Didi are trying to eat away at the company’s market share as it faces a crackdown from regulators.
The Cyberspace Administration of China (CAC) also ordered app stores in China to remove Didi from download, alleging the company had illegally collected users’ personal data. No new users are able to sign up.
Last week, authorities ordered a further 25 apps operated by Didi to be removed from app stores.
Didi’s regulatory problems have left the door open for competitors to chip away at the company’s roughly 90% market share.
Last week, food delivery company Meituan re-launched a standalone ride-hailing app that was previously taken off app stores in 2019.
Another rival called T3 plans to expand into 15 cities, according to an internal memo cited by local media. T3 is a venture by three major Chinese automakers, and is backed by technology giants Tencent and Alibaba. The company has been pushing ads on Tencent’s WeChat messaging service, which has over a billion users. Anyone who clicks the ads is offered discount coupons for using the service.
Meanwhile, Cao Cao, a ride-hailing service run by carmaker Geely, is offering hefty discounts for new users on its service.
Didi grew into the dominant player, with nearly 500 million annual active users, through aggressive expansion over the years after buying out Uber’s China business in 2016.
But the company has been caught up in Beijing’s crackdown of its technology companies, particularly as regulators tighten up rules on data security.
Apple reports earnings for its second fiscal quarter on Thursday after the markets close.
Investor expectations are low and Apple could surpass them even if sales growth is weak. In February, Apple said it expected sales similar to last year’s $94.84 billion during the same period and flat iPhone sales.
Here’s what analysts expect from Apple, according to LSEG consensus estimates:
Earnings per share: $1.50
Revenue: $90.01 billion
Here’s how Apple’s business units are expected to fare in the March quarter, per LSEG estimates:
iPhone revenue: $46.00billion
Mac revenue: $6.86 billion
iPad revenue: $5.91 billion
Wearables, home and accessories revenue: $8.08 billion
Services revenue: $23.27 billion
Analysts expect Apple to give a forecast for the current quarter of about $83.23 billion in sales, which would be 1.8% annual growth. Apple shares are down about 10% this year, underperforming its peers and the broader market. Some worry that the 2023 iPhone 15 may be seeing weak demand.
But the biggest theme that investors will be watching for is the overall trend in Apple’s third-largest market: China. In the December quarter, sales dropped 13% in Greater China, which includes Hong Kong and Taiwan. Analysts polled by FactSet expect $15.25 billion in China regional sales, which would be a 14% year-over-year decline.
Even worse is what the slump could indicate: Deteriorating conditions in a key market for Apple where it also manufactures the vast majority of its products. Chinese government agencies over the past year have reportedly asked staff to curtail use of “foreign” devices — iPhones — suggesting that Apple may not have the support of Chinese national leadership.
Apple also faces increased competition from local companies, including Huawei, which recently introduced a 5G smartphone despite U.S. export controls on advanced chips.
“AAPL has de-rated significantly amid a weak iPhone 15 cycle and fears that Apple’s China business is structurally impaired,” Bernstein analyst Toni Sacconaghi wrote in a note last week. He has an outperform rating on the stock.
But Sacconaghi doesn’t see Apple being permanently hampered by Chinese Communist Party sentiment, calling the current weak cycle “more cyclical than structural” and pointing out Apple’s historical volatility in the region.
“In strong iPhone cycles, Apple’s China revenues typically grow much faster than Apple overall, as Chinese consumers embrace the new phone,” Sacconaghi wrote. “The strong embrace is typically followed by several quarters of weaker (and often negative YoY growth), as we are seeing now.”
Third-party data points on China aren’t strong, either.
Data from Counterpoint Research shows Huawei surged 70% on an annual basis in March, while Apple declined 19%, falling into third place. However, analysis of the data suggests that the “preliminary signs of iPhone demand improvement … is broader than previously expected,” UBS’ David Vogt wrote this week.
Meanwhile, state statistics show iPhone sales falling 33% in February, the second consecutive month of declining shipments.
Wells Fargo analyst Aaron Rakers said in a March note that iPhone sales could be down 20% on an annual basis during the quarter.
Expectations for the quarter are muted, and how Apple says it sees the current quarter shaping up may be more important than the results for the March quarter.
“There’s a chance Apple could see a relief rally/squeeze higher on a ‘better than feared’ earnings report/guide,” Morgan Stanley analyst Erik Woodring, who has an overweight rating on the stock, wrote in an April note. “This creates a tricky setup, and one we don’t believe investors necessarily need to step in front of.”
Apple hasn’t provided guidance since 2020, but company executives give data points that analysts can use to project sales. “June quarter revenue and gross margin guidance will be critical this quarter,” Woodring wrote.
Apple also typically updates investors during second-quarter earnings about how much it plans to spend on share buybacks for the rest of the year.
“We expect Apple to update its capital return plans at March quarter earnings, and don’t expect any meaningful deviation from recent plans,” Woodring wrote. In May 2023, Apple said it had authorized an additional $90 billion in repurchases.
A general view of the city skyline at sunset from Dhow Harbour on February 5, 2015 in Abu Dhabi, United Arab Emirates.
Dan Kitwood | Getty Images
DUBAI — Abu Dhabi artificial intelligence firm Presight bought a 51% stake in AIQ, a joint technology venture between the Abu Dhabi National Oil Company (ADNOC) and G42, a major Abu Dhabi-based AI and cloud company.
The new ownership structure will see ADNOC holding 49% of the company and giving it a valuation of $1.4 billion, according to a joint company press release.
ADNOC will in turn get a 4% stake in Presight, as it aims to integrate AI into more of its operations and services. AIQ, for its part, will continue as a standalone company within Presight’s portfolio, the release said. AIQ uses AI and machine learning to improve processes in the oil and gas industry.
Speaking to CNBC’s Dan Murphy, AIQ CEO Chris Cooper discussed how his firm has benefitted from ADNOC and how it plans to broaden its applications in the energy industry and globally.
“We’ve had the benefit of the huge volumes of data that ADNOC provide. We’ve also had the insights of the people that come from ADNOC. That [is] combined with our data scientists and software engineers, and also then combined with the infrastructure that’s required to run those models that come from Group 42,” Cooper said.
What the acquisition does, he added, is “leverage the breadth and the reach that Presight has as a global data-driven analytics company to take those solutions that have been built here in the UAE and … take them to a global forum, and really drive, focus on sustainability, focus on safety, and improving operations of all of the energy industry companies that we can now work with.”
Under AIQ’s previous structure, it was owned 60% by ADNOC and 40% by G42. Sultan Ahmed Al Jaber, the minister of industry and advanced technology and ADNOC’s group CEO, will take over as AIQ’s chairman.
Abu Dhabi is pushing ahead with work and investment in AI. Earlier in April, Microsoft invested $1.5 billion in G42, helping spur its expansion plans and develop the UAE’s position as a technology hub.
Taylor Swift attends the 66th GRAMMY Awards at Crypto.com Arena on February 04, 2024 in Los Angeles, California.
Neilson Barnard | Getty Images
Universal Music Group, the record label for top music artists including Taylor Swift and Drake, struck a new licensing agreement with TikTok, putting an end to a spat between the two companies.
In a statement Thursday, UMG said the licensing deal would lead to the return of its artists’ music to TikTok.
Music by artists including Swift and Drake became unavailable on TikTok, which is owned by Chinese internet giant ByteDance. Swift had her music restored on the platform on April 12.
UMG accused TikTok of bullying and intimidation in its contract negotiations and alleged that TikTok proposed paying its artists and songwriters “at a rate that is a fraction of the rate that similarly situated major social platforms pay.”
At the heart of the spat was the contention that TikTok allowed its platform to undermine artists’ intellectual property with unauthorized AI-generated songs. UMG claimed the social media platform was “flooded with AI-generated recordings.”
UMG and TikTok’s new deal aims to improve remuneration for songwriters and artists, provide promotional opportunities for their recordings, and introduce “industry-leading protections” when it comes to generative AI.
The fresh agreement, “focuses on the value of music, the primacy of human artistry and the welfare of the creative community,” said Lucian Grainge, chairman and CEO of UMG.
“We look forward to collaborating with the team at TikTok to further the interests of our artists and songwriters and drive innovation in fan engagement while advancing social music monetization.”
Shou Zi Chew, TikTok’s CEO, said the platform is “committed to working together to drive value, discovery and promotion for all of UMG’s amazing artists and songwriters.”
TikTok and UMG said they would work to ensure AI development in the music industry protects artists and that they’re sufficiently paid for their material.
TikTok will also work with UMG to remove unauthorized AI-generated music from its platform, as well implement tools to improve artist and songwriter attribution.
Correction: The headline and text of this story have been amended to say that Taylor Swift’s music was restored on TikTok on April 12.
