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Digital Digest – 05 January

In this week’s digital digest we look at US investors swooping on British tech startups and Meta appealing the CMA’s decision over its acquisition of Giphy.  

We then take a look at big tech as Apple becomes the first $3 trillion company and we come to the end of an era as Blackberry switches off its software.

Closer To Home

US investors swoop on British tech start-ups ahead of national security overhaul

In 2021, US investment firms didn’t think twice about getting ahead of new national security laws that would come into effect in the new year. 130 British start-ups were taken over by American companies in 2021, 87 more than in 2020 and breaking the previous record of 105 in any one calendar year. 

One could say that these figures are a sign that the UK is one of the best environments in the world for tech start-ups, however it can also be argued that these start-ups are being acquired before they reach their full potential.

Under the new law ministers will be able to intervene in smaller deals than before, potentially providing a barrier to start-up takeovers. At present, the government will not intervene in takeovers of companies making less than a £70m turnover a year in most sectors. However, the new regulations require firms in various technology sectors to notify the government if a foreign entity is attempting a takeover.

Meta to appeal CMA’s ruling on Giphy acquisition

Following the Competition and Markets Authority’s (CMA) announcement in November 2021 that it would block Meta’s acquisition of Giphy, The Competition Appeal Tribunal has said that Meta has filed an appeal against the decision on six grounds.

The reason behind the CMA decision was that the sale would result in reduced competition between social media platforms as well as in display advertising, thereby harming social media users and businesses in the UK. It was concluded by the panel that Meta would increase its significant market power vis a vis other competitors by limiting their access to Giphy GIFs.

Meta’s appeal is not entirely surprising as the deal would essentially drive more traffic to Meta-owned sites such as WhatsApp and Instagram. However, should the appeal be unsuccessful and the deal ultimately fail, it could signal the end of Big Tech’s spending spree in the UK as the regulator ups the ante on ‘killer acquisitions’

Big Tech

Apple becomes first $3tn company after boost from pandemic demand

While Microsoft overtook it as the world’s most valuable company in October 2021, Apple’s valuation has risen by half a trillion dollars since mid-November. Tripling since 2018, Apple’s valuation rose by a total of $1tn in less than 16 months as it enjoyed a pandemic-induced boom.

As only one of six companies to be valued at over $1tn, Apple has cemented its place at the top of the valuation tree by successfully navigating a supply chain crisis. It has benefited greatly during the pandemic as customers upgraded their office supplies as a result of the shift to home working.

Apple is also thought to have benefited from Tesla’s success due to hope the smartphone manufacturer would enter the electric car company in the next five years. The booming valuation adds a feather to the cap of Apple CEO, Tim Cook, under whom the company’s valuation increased by $2.7tn in spite of early critics when he took the reins from the late Steve Jobs.

End of an era as BlackBerry software switches off

Support for the few remaining Blackberry phones has come to an end. The once prolific mobile phone developer experienced a sustained decline over the past decade as it struggled to keep up with Apple and Android. Having sold 50 million phones in 2011, the company saw its sales collapse and by 2016 the company accounted for 0% of the market share, selling just 207,900 units.

While other hardware developers innovated, utilising advancements such as touch screen technology and an ever increasing libraries of apps, Blackberry relied on its devoted users who appreciated its older style keyboard and interface. Blackberry eventually released a touchscreen model in 2013, but by this time the ship had sailed.

Blackberry as a company still operates, developing security software for cars and businesses while also licensing out the Blackberry name to other manufacturers, with another developer slated to release a licensed phone later this year, using the Blackberry name.

Also in the News:

  1. Unpredictable spend: could the subscription model be a way for marketers to buy creative? Creative platform Shuttlerock is attempting to shift the burden of compromise with its new subscription model. See here

  2. The 2021 media industry in charts: Ad spend bounces back, digital subs grow and press freedom declines. See here.

  3. Popcorn – the ‘Netflix of piracy’ – is dead, developers announce. See here

  4. Elizabeth Holmes, the founder of Theranos who has been convicted of 11 charges of fraud, is far from the only tech leader overpromising and underdelivering. See here

  5. Investors gear up for ‘gold rush’ in metaverse hardware as a boom is expected in ‘picks and shovels’ underpinning technologies such as headsets, sensors and chips. See here.

Worth a Read:

  1. Wired: Electric Vehicle Charging is the Next Billion-Dollar Market.

  2. The Drum: The future of marketing is building a privacy-safe world.

  3. FT: Tencent move to sell $3bn of Sea shares sends stock down sharply.

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