May and her Brexit plan

Although the Parliament has voted against a no-deal Brexit, the chance of exiting the European Union with no deal still exists as no-deal Brexit is the default option if the UK cannot negotiate an exit plan with the EU.  At the moment, there is an exit Brexit deal existing between the UK government and the European Union, which is the deal proposed by the UK Prime Minister May to the Parliament; however, the Parliament has rejected the deal several times already. So far, it seems that this deal is the best of which May is capable of providing because what we are seeing is that May is trying to get the deal passed by the Parliament instead of trying to negotiate an improved deal with the European Union.

At the moment, May is trying to gain the support from the Parliament by offering her Prime Minister position as she promises that if the deal can be passed by the Parliament, she will resign. This really is a bad move in terms of politics, as she offers something that gives other politicians some personal benefits in return of a policy that will determine the country's fate unless the policy is definitely the best for the country. So far it seems that May believes in her deal.

At the moment, I do not think that any opposition will support May because of her promise, not because they do not want to be the next Prime Minister, but because they are seeing the fall of May as an inevitable outcome. If May cannot get her deal passed, she will not have the face to remain at her positions as the Prime Minister as well as the Conservative Party leader. She's efforts to get her deal passed in the Parliament I do not think will work.

Can governments really manage the technological risk?

The 5G is coming and many countries are preparing themselves for it. One major concerns of many countries which need to rely on other countries' hardware to build 5G network is the security. The companies which have the technology for 5G network all want to win the contracts from governments; therefore, they will cooperate with governments to ease their security concerns, including unveiling codes to governments. Then here comes a question that if governments have the ability to manage the technological risk and detect firms' cheating behavior.

Governments are often believed to be powerful even in the field of innovation and invention. However, this may be only true during war time or in a highly centralized government, when the resources are highly concentrated in governments. However, when the economy is running in the market's invisible hands, the resources will be allocated based on the rule of profit maximization that resources will be used to generate profits, especially private profits. The technological risk is a source of negative externality that it does not create substantially high costs for any individual or firm. Under such circumstance, governments have to step in and reduce or eliminate the negative externality. However, unlike some other externalities, governments cannot solve the issue by simply placing taxes or providing subsidies, but instead governments have to identify the risk and then eliminate the risk. Because the technology market is very concentrated and even sometimes monopolistic, governments sometimes have to make some compromise and choose to work with companies which may have potential risk. Then the next step for governments is to identify the risk. In the Boeing scandal, we can see that companies often have better experts than governments because companies can pay experts better.

To compete with firms, governments can spend more on hiring the best experts or they can outsource the checking job to a third party firm which has the resources; however, either way will cost governments a lot more. We can see the increased costs for governments are the negative externalities.

Can Apple succeed?

What Apple is trying to do right now is not only to provide more contents for its customers, but also to build an ecosystem to contain its customers. Many people find after owning their first iPhone, they start to use Apple's laptops and tablets, then buy Apple's Apple Watch and AirPods; they are buying more and more products. Moreover, they do not only just buy more Apple's devices, but also buy more and more Apple services, such as Apple Music. Once people become addicted to Apple's ecosystem because of the convenience brought by the ecosystem, they are not easy to switch to other firms' devices or services.

However, it does not mean people will always stick to Apple's ecosystem. People are always making cost and benefit analysis, they will always choose the options which make their benefits greater than their costs. The convenience is a benefit, but people have to pay for the convenience provided by Apple. Once people find the benefit of the convenience no longer exceed the prices they pay, they will give up the convenience and switch to something that may not be so convenient but a lot cheaper. This is why Android smartphones are occupying a greater market share than Apple's iPhones are. High prices can definitely boost revenues if the sales do not drop significantly, which was shown in Apple's previous report (after the launch of iPhone X); however, high prices do not only reduce the sales of hardware, but also reduce the attractiveness of services. If Apple wants to use its services to generate greater revenues, it has to make the benefit of the convenience greater than the cost.

At the moment, Apple's products are still relatively more expensive than other competitive devices on the market; however, after the departure of the former Burberry boss from Apple, Apple may deviate from its current route of being a luxury brand and lower its prices again. The new iPad release may be a signal that Apple is now providing devices which have good quality and also reasonable prices (though the new iPads are not cheap, they are at least not a lot more expensive).

Apple differentiating itself from other tech tycoons

On Monday, Apple hosted an event in its famous Steve Jobs Theatre, the slogan given to the event was "It's Show Time". There was no any upgrade to its hardware (Apple released several new devices before the event), it seemed that Apple wanted audience to focus on its upcoming services. Apple released Apple News+, Apple Card, Apple TV+ and Apple Arcade in addition to its service updates. We can see the new upcoming services cover finance as well as entertainment. 

Apple does not only open its platforms for a wide range of developers and content creators, but also tries to create its own content. We should not be surprised about this, Apple has shown its ambition of being a content creator for a long period of time, and its Radio channel under its Apple Music was its first big move (at least according to my memory).

Apple has tried to launch its own services which have already existed in its App Store. Some people may still remember that iPhone used to have Google Map and YouTube by default; however, due to the complicated relationship between Google and Apple, Apple launched its own Map (this could also be its first step of content creation). What surprised me is Apple's ambition in finance. Although Apple Pay has existed for a significant period already, providing credit card service is something different.

Apple has set a bar for all its services, which is privacy and security. This has been cheered by many of Apple's customers and this is also the image that Apple has always been building. In terms of convenience, Apple may have to make some compromise. Google has a wide range of users, but because most of its products are free, it has to seek profits from third parties, which has been criticized by many about exploiting users' private information; Facebook has also been attacked for similar reasons. Apple wants to differentiate itself from these two companies; therefore, according to Apple's claims, the user information from all its services will not be sold to third parties and the personalized content provision is done on devices rather than cloud. The success of Apple will then depend on how much users value their own privacy. It is difficult to make a judgment because some people say that they care about their privacy but often give up their privacy for cheaper or free services.

The economy slowdown fear

The global stock market fell sharply due to the disappointing data from Germany's manufacturing sector. However, many economists and institutions viewed the Friday's selloff as a market overreaction. At the Credit Suisse Asian Investment Conference in Hong Kong, the former chairwoman of the Federal Reserve, Janet Yellen, said "I don't see a US recession as particularly likely". In addition, the financial institutions generally believe that weakness among German industry is "manageable".

The risk currently facing the world economy does exist and also always exists. We cannot make any particular prediction about "blackswan risk" (otherwise, it is not "blackswan risk"); the sources of risk are known to the market (maybe not all individuals know), and the market performance should reflect all the information available to the market under the perfect circumstance. However, as we know, the market can overreaction, then the market does not reflect the information perfectly and people can draw wrong conclusions from the overreacting market performance, accumulate the overreaction in the market.

The known risk is from the changing in the world trading, the economic shocks within the world economy and others. However, no one knows when the next recession will come and what the next recession will cause. Like now, maybe many well known experts are saying the market is overreacting to the negative news; however, once the entire market overreact to some extent, the fear will come true.

Is Esport to be as successful as traditional sports?

Esports has been drawing people’s attention and many tech tycoons have put lots of efforts into Esports. The famous game developer, Activision Blizzard, hired people from the traditional sports (including the famous NBA) to lead its new esports; it wants to borrow the success story to help its esports events to be similarly successful. Tencent also has invested billions of dollars into esports, is hosting the world largest PC game (League of Legends) competition and the world largest mobilegame (Honor of King) competition. Alibaba is hosting WESG every year after Samsung ended its WSG event. Recently Google unveiled its gaming platform, Stadia. When Google introduced its new platform, it seemed that the new platform would help game developing and live streaming. While many companies are investing in esports, can Esports be as successful as traditional sports?

Esports can have as many fans as traditional sports does, so there is definitely a market over there. However, there are some key differences between Esports and Sports. Traditional sports does not have copyright, that any party can host a sports event. However, traditional sports need facilities to host the events, like a stadium. On the other hand, esports normally needs the authorisation from game developers. This can be costly, that is why we often see game developers are also the hosters of their game events. In addition, more and more video games are released every year. After a video game becomes popular, more similar video games will be released. But esports events do not necessarily need a stadium to host, there is a plenty of online esports competitions. Moreover, to some extent, people can watch esports competitions better from their own computer screens rather than from a huge monitor when sitting in a stadium. Moreover, many live streaming platform has provided ways of communication between audience across the Internet.

To conclude, I personally expect esports can growing more popular, but there is not a single video game which can have a dominating power as Football has.

From Boeing to others

It is reported that Boeing decided not to provide extra training for 737 pilots other than a just over one-hour iPad training session. Such decision was made based on cost concerns, it could also have been welcomed by airlines, as airlines did not pay for the high costs of training their pilots. People are shocked by this report and asking why the FAA (Federal Aviation Administration) did not intervene. According to some people who are familiar with the issue, the FAA lacks funding to find professional experts to conduct proper examines of aircrafts; therefore, the FAA has to rely on the aircraft manufacturers, especially Boeing (the US biggest aircraft manufacturer), to conduct the tests including safety tests.

The FAA is a government branch and Boeing is a private company. Boeing can pay their experts and engineers much better than the FAA does, so the majority of the good experts and engineers will go to work for Boeing rather than the FAA. Under such circumstance, the regulators lose their regulation power and ability.

In the future and actually at the moment, the technology development will make the government much less capable of regulating the market, because the government does not have the experts to understand the issues raised by advanced technology. Therefore, more and more lacks of regulations are not caused by the technology development is moving too fast, but caused by the regulators lack the ability and power to understand the issues.