ICT industry readies for unprecedented probe

The US government gears up to investigate whether Amazon, Apple, Facebook and Google misused their massive market power.
Read time 7min 20sec

Infineon’s acquisition and the US’s potential investigations into some of the world’s largest companies dominated the international ICT market last week, while at home it was another quiet week.

Key local news

  • Satisfactory year-end figures from the Huge Group, with revenue up 7.8% and profit up 21.3%.
  • The announcement that Flutterwave, a US-based global payment solutions platform, is entering the South African market this month.
  • A new JSE cautionary by AYO Technology Solutions.
  • The appointments of Snowy Khoza as chairman of Etion, and Xolani Mkhwanazi as group chairman of EOH.

Key African news

  • The appointment of JP Smith as Hitachi Vantara’s regional director for East and West Africa.

Key international news

  • The acquisition by Accenture of BRIDGE Energy Group, a US-based consulting and systems integration firm that provides grid modernisation, analytics and security services to utilities in North America.
  • Apple bought Drive.ai, a start- up that will bring more engineers with experience in autonomous vehicle technology to the iPhone maker.
  • Cisco Systems purchased Sentryo, a French company that specialises in device visibility and security for industrial control system networks.
  • The acquisition by Elastic NV of Endgame, a security company focused on endpoint prevention, detection and response.
  • Flexera bought RISC Networks and its software-as-a-service analytics platform that helps companies hasten their migration to the cloud.
  • The $2.6 billion acquisition by Google of Looker, a big data analytics company.
  • Hengtong Optic-Electric, an optical telecommunication network products company, purchased Huawei Technologies subsidiary Huawei Tech Investment’s 51% stake in Huawei Marine Systems, an undersea telecom cable business.
  • The acquisition by Imperva of Distil Networks, a bot management vendor.
  • The EUR9 billion acquisition by Infineon Technologies AG of Cypress Semiconductor, a US-based maker of microchips used in cars and electronic devices.
  • The acquisition by Intel of QuickLogic, a developer of semiconductor and software algorithm solutions.

Apple bought Drive.ai, a start- up that will bring more engineers with experience in autonomous vehicle technology to the iPhone maker.

  • The acquisition by NCR of OKI Brasil’s IT services and select software assets for financial, retail and other industries.
  • Sophos bought Rook Security, a managed detection and response vendor.
  • The $230 million acquisition by Teledyne Technologies of 3M’s gas and flame detection business.
  • The acquisition by Twitter of UK-based Fabula AI, a deep learning start-up that has been developing technology to try to identify online disinformation by looking at patterns in how fake versus genuine news spreads online.
  • The acquisition by Wipro of International TechneGroup Incorporated, a global digital engineering and manufacturing solutions company.
  • The acquisition by Xerox of two new multi-brand dealers, Rabbit Office Automation and Heritage Business Systems.
  • The acquisition by Zebra Technologies of Profitect, a major provider of prescriptive analytics for the retail and consumer packaged goods industries.
  • The $11.2 million investment by PayPal Holdings in Tink, a Swedish company that enables banks and financial technology start-ups to access financial data more easily.
  • Google’s privacy woes are set to increase after campaigners filed complaints to data protection regulators in France, Germany and seven other EU countries over the way it deals with data in online advertising.
  • Two app developers have sued Apple over its App Store practices, making claims similar to those in a lawsuit brought by consumers that the US Supreme Court recently allowed to proceed.
  • TiVo won an International Trade Commission patent case against Comcast.
  • Alibaba and Russia’s RDIF sovereign wealth fund will each invest $100 million in a Russian e-commerce joint venture.
  • Apple will replace the iTunes service in its current form as it splits the software across three apps: Music, Podcasts and TV.
  • Cinia and MegaFon have signed a memorandum of understanding to form a joint venture that will ultimately lay a telecommunications cable across the Arctic Sea. The new route will offer an ultra-low-latency subsea route between Europe and northern Asia.
  • EQT, a Swedish private equity firm, has ditched plans to buy Vocus after the Australian telecommunications company opened its books for the potential $3.3 billion deal.
  • IBM has withdrawn its proposed mainframe computing venture with T-Systems.
  • KCOM, a network and cloud-based service provider, has pulled its recommendation of a bid by British pension fund-backed Humber Bidco in favour of a higher offer backed by investment firm Macquarie's European Infrastructure Fund.
  • The US government is gearing up to investigate whether Amazon, Apple, Facebook and Google misused their massive market power, setting up what could be an unprecedented, wide-ranging probe of some of the world’s largest companies. The Federal Trade Commission (FTC) and the Department of Justice, which enforce anti-trust laws in the United States, have divided oversight over the four companies, with Amazon and Facebook under the watch of the FTC, and Apple and Google under the justice department.
  • Excellent quarterly results from Yunji (back in the black) and Zoom Video Communications (back in the black).
  • Good quarterly numbers from Ciena, SAIC and Salesforce.com.
  • Mediocre quarterly results from GameStop.
  • Mixed quarterly figures from Comtech Telecommunications and CooTek, with revenue up but net income down; and from IDT (back in the black) with revenue down but net income up.
  • Quarterly losses from Ambarella, Aurora Mobile, Box, Cloudera, Coupa Software, DocuSign, Domo, Elastic NV, Guidewire Software, MongoDB, PagerDuty, Perspecta, Pivotal Software, SeaChange International, SecureWorks, Smartsheet and Volt Information Sciences.
  • A half-year loss from LightwaveRF.
  • The appointments of Martin Cole as interim CEO of Cloudera; John Mengucci as CEO of CACI International; Melisa Miller as CEO of Alliance Data; Sebastien Oebel as CEO of Kapten; Rishad Premji as executive chairman of Wipro; and, Scott Raskin as chairman of Neology.
  • The resignation of Ed Heffernan, CEO of Alliance Data.
  • The retirements of Ken Asbury, CEO of CACI International, and Tom Reilly, CEO of Cloudera.
  • The departure of Sharon White, CEO of Ofcom (UK).

Research results and predictions

  • Worldwide:
  • According to Gartner, by 2021, 90% of current enterprise blockchain platform implementations will require replacement within 18 months to remain competitive, secure and avoid obsolescence.
  • According to IDC, the worldwide market for personal computing devices, inclusive of traditional PCs and tablets, is expected to decline 3% in 2019 with shipments reaching 392.5 million units. It anticipates the decline to continue through 2023, with unit shipments reaching 367.7 million with a CAGR of -1.6%.
  • IDC, in its first forecast of artificial intelligence (AI) edge processors, estimates worldwide shipments of AI-optimised processors for edge systems will reach 340.1 million units in 2019, an increase of 170% over 2018. By 2023, it expects the market will reach unit shipments of 1.5 billion and achieve a five-year CAGR of 64.9%.
  • IDC says worldwide spending on augmented reality and virtual reality is forecast to reach $160 billion in 2023, up significantly from the $16.8 billion forecast for 2019.
  • According to IDC, vendor revenue in the worldwide server market increased 4.4% year-on-year to $19.8 billion during 1Q19. Worldwide server shipments declined 5.1% year-on-year to just under 2.6 million units.
  • Vendor revenue in the worldwide enterprise storage systems market decreased 0.6% year-on-year to $13.4 billion during 1Q19. Total capacity shipments were up 14.1% year-over-year to 114.2 exabytes during the quarter, says IDC.
  • According to the World Semiconductor Trade Statistics, the worldwide semiconductor market is forecast to drop 12.1% to $412.1 billion in 2019, after climbing to a record high of $468.8 billion in 2018.

Stock markets changes

  • JSE All share index: Up 4.4%
  • FTSE100: Up 2.4%
  • DAX: Up 2.7%
  • NYSE (Dow): Up 4.7%
  • S&P 500: Up 4.4%
  • Nasdaq: Up 3.9%
  • Nikkei225: Up 1.4%
  • Hang Seng: Up 0.2%
  • Shanghai: Down 2.4%

Look out for:

  • International:
  • Further developments re the US/China trade ban situation.
  • South Africa:
  • Further news re the AYO and EOH investigations.

Final word

African Business magazine recently published its 2019 “Africa’s Top 250 Companies” list, which is created by total market capitalisation rankings.

As in previous years, there are no IT companies in the list from outside SA. Included in the rankings from a technology perspective are:

  • (1) Naspers (no change)
  • (7) Vodacom Group (was 6)
  • (10) Maroc Telecom (was 11)
  • (12) MTN Group (was 8)
  • (14) Safaricom (was 17)
  • (36) MultiChoice (new entrant)
  • (37) Econet Wireless Zimbabwe (was 95)
  • (46) Sonatel (was 44)
  • (60) Telkom SA (was 77)
  • (90) Vodafone Egypt (was 91)
  • (92) Telecom Egypt (was 114)
  • (93) Orange Egypt (no change)
  • (106) Global Telecom Holding (was 94)
  • (119) Reunert (was 118)
  • (135) Vodacom Tanzania (was 158)
  • (172) Altron (was 232)
  • (182) Datatec (was 236)
  • (187) Onatel BF (was 206)
  • (217) MiX Telematics (new entrant)
  • (235) Ayo technology Solutions (was 113)
  • (239) Telecom Networks Malawi (new entrant)
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