The news at a glance
Autos: Apple hits the brakes on car project
“Apple has drastically scaled back its automotive ambitions,” said Mark Gurman and Alex Webb in Bloomberg.com. Hundreds of employees working on a potential Apple-designed car have been laid off or reassigned in recent months, according to people familiar with the project. Sources say Apple’s car team, which launched in 2014 with grand ambitions to build the iPhone of automobiles, had become “blighted by internal strife” as the company struggled to master the industry’s complex supply chains. The tech giant is now likely to pivot to developing software for self-driving cars, allowing it to partner with existing carmakers instead of becoming an automaker in its own right.
Focusing on software “actually makes a lot more sense than the iPhone maker constructing a sedan,” said Damon Beres in Mashable.com. Building the tech that makes self-driving cars run will be worth much more to Apple in the long run than the difficult, often unprofitable business of building actual vehicles. Self-driving cars, packed with cameras and sensors, will collect massive amounts of lucrative data about their drivers, including where they live, where their kids go to school, and where they like to stop for coffee. “Apple has no vested interest in you getting from point A to point B more efficiently. It cares more about what happens along the way.”
The bottom line
▪The nation’s 65 million Social Security recipients will receive a paltry 0.3 percent cost-of-living adjustment to their benefits in 2017. That means the average retired beneficiary’s monthly check will increase by about $5, to $1,360, next year. USA Today
▪The five largest U.S.-based tech companies by stock-market value—Apple, Alphabet, Microsoft, Facebook, and Oracle—are worth a combined $1.8 trillion. That’s 80 percent more than the five most valuable tech companies in 2000: Cisco, Intel, IBM, Oracle, and Microsoft. Today’s tech giants employ 22 percent fewer workers than their predecessors, with a combined 434,500 employees last year, compared with 556,520 at the top five firms in 2000. The Wall Street Journal
▪The Department of Agriculture has pledged to buy $20 million in cheddar cheese from U.S. dairy farmers to help ease a massive cheese glut that has caused incomes for dairy producers to fall 35 percent over the past two years. It’s the second such purchase in the past three months. Vox.com
▪Nearly 75 percent of the world’s highly skilled immigrants increasingly live in just four countries: the U.S., U.K., Canada, and Australia, according to the World Bank. Around 70 percent of engineers in Silicon Valley were foreign-born in 2010. WSJ.com
▪Last year, 64 former members of Congress sat on corporate boards—31 Democrats and 33 Republicans—earning an average $357,182 each, roughly twice what they earned as lawmakers. Since 1992, 44 percent of former senators and 11 percent of former representatives have become corporate directors. Bloomberg.com
Construction: Caterpillar chief calls it quits
Caterpillar CEO Doug Oberhelman will retire earlier than expected, “leaving his replacement to finish the job of navigating a commodities slump,” said Danielle Bochove in Bloomberg.com. The world’s largest maker of construction and mining equipment said this week that Oberhelman will step down at the end of the year after 41 years with the Peoria, Ill.–based company. Oberhelman led Caterpillar to record sales in 2012, but cratering global demand for construction and mining equipment derailed his ambitious goal of boosting sales by 50 percent.
Media: Netflix reports subscriber surge
Netflix is back to winning the expectations game, said Shalini Ramachandran and Maria Armental in The Wall Street Journal. The company beat its own subscriber forecasts for the most recent quarter, “reassuring investors who were skittish about the streaming giant’s growth trajectory.” The company added 3.2 million international subscribers, more than the expected 2 million, and 370,000 U.S. subscribers, more than 20 percent ahead of its forecast of 300,000. The news “comes a quarter after it reported its weakest subscriber expansion in three years,” which led to a stock slump.
Companies: Weak sales, layoffs at Harley-Davidson
Harley-Davidson is slashing jobs and reorganizing operations “amid a sluggish U.S. motorcycle market,” said Rick Barrett in the Milwaukee Journal Sentinel. The motorcycle manufacturer, the U.S. market leader in sales, reported this week that U.S. sales fell 7.1 percent year over year during the third quarter. In response, the company plans to slow production and lay off some 225 salaried positions. “U.S. motorcycle sales have been soft in recent months, partly due to economic weakness in oil- and gas-producing states.” The company also faces increased competition from Japanese motorcycle manufacturers like Honda and Yamaha.
Telecom: Comcast penalized for improper billing
“Comcast is paying one of the biggest fines ever levied on a cable company,” said Brian Fung in The Washington Post. Comcast last week agreed to pay $2.3 million to the Federal Communications Commission after subscribers complained they’d been charged for premium channels, set-top boxes, and video-recording devices despite telling the company they didn’t want upgrades. Many customers discovered the extra charges when they checked their bills or received an email notification about the changes.
Your invention willbe stolen
“Your brilliant Kickstarter idea could be on sale in China before you’ve even finished funding it,” said Josh Horwitz in Qz.com. In December, Israeli entrepreneur Yekutiel Sherman launched a crowdfunding campaign for his invention, Stikbox, a smartphone case that unfolds into a selfie stick. Just one week later, Sherman found Chinese vendors selling his creation online, some even using the exact same product name. He’s not alone. Tight-knit networks of manufacturers and designers in Shenzhen, China’s gadget and electronics hub, regularly scour sites like Kickstarter and Amazon for up-andcoming products. They then work together to replicate designs and coordinate production, allowing them to churn out knockoffs with lightning speed. According to one venture capitalist who works in China: “If you have a simple product that has some market demand, you will get copied.”