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Transforming cost structures

Airbnb and SolarCity provide incentives for hosts to install solar systems

Airbnb partnered with SolarCity to offer financial incentives for hosts that install a solar system in their properties being rented. Hosts that install a solar energy system from SolarCity will receive a $1,000 cash back from the company. The offer is valid until the end of March next year, after which the incentive will drop to $750 for the rest of 2017. Homeowners with solar panels already installed and want to join Airbnb can also receive a $100 gift card from the company. The decision may appeal to travelers, particularly Millennials, interested in staying at an environment-friendly home. It could also help Airbnb establish itself as an environment-friendly company. The company published a study that says home sharing saves the environment billions of liters of water, tons of waste and large amounts of energy.

Key Takeaway: 

Airbnb and SolarCity have partnered together to offer incentives for hosts to purchase a solar system from SolarCity, which can help to position Airbnb as a sustainable company as well as attract Milennial renters that are interested in environment-friendly homes.

Publication: 
Publication Date: 
October 24, 2016

AT&T’s acquisition of Time Warner draws regulatory scrutiny

AT&T is set to acquire Time Warner for $85.4 billion, giving it control over the latter's massive content if the deal is approved by regulators. Time Warner owns HBO, CNN and TBS. The deal will give AT&T multiple sources of revenues including potentially subscription revenues and advertising fees. They could also earn from the data based on the content that customers consume. The deal has sparked criticism from regulators with US lawmakers calling for an antitrust hearing on the issue, reports The Washington Post. Some antitrust experts think the FCC should be involved in the deal as it can put the company's competitors at an unfair disadvantage in different ways, including favoring its content over competitors in its platforms, offering unlimited streaming of Time Warner content or overcharging competitors to gain access to its content. The acquisition could also encourage other buyouts, adding more consolidation to the industry. Other carriers Verizon and Comcast are also buying content as they can drive network revenues.

Key Takeaway: 

AT&T’s acquisition deal with Time Warner, producer of entertainment content such as HBO, CNN and TBS, for $85.4 billion received much regulatory scrutiny for antitrust concerns that the company can have massive control over the content that Time Warner creates, its revenues and distribution, which can be used to throttle competitors to favor its content and services.

Market Disruptions: 
Publication: 
Publication Date: 
October 24, 2016

Rise in EV adoption will drive new opportunities for utilities

A new report from Bloomberg New Energy Finance states that the electrification of transportation will present opportunities for utilities faced with stagnant load growth as well as increasing pressure to innovate with new business models that incorporate distributed and clean energy as a resource. It is estimated that electric vehicle adoption will have greater impact on utilities by 2030 as they will make up 3% of global energy demand. However, electric cars are not expected to be competitive to internal combustion engine vehicles until the mid-2020s. Utilities can provide specific rate plans designed for EV charging to cater to this new market, as well as new vehicle leases that take account negotiated electricity rates. They can also participate in the build-out of public and semi-public charging infrastructure. Autonomous cars and car sharing models can speed the integration of electric vehicles as demand response assets. Much opportunity is also in used batteries which is expected to hit the market in large quantities by mid-2020s. They will be used for grid storage, enabling more clean energy to be integrated to the grid, as well as introduce lower peak demand prices for public charging.

Key Takeaway: 

Rise in electric vehicle adoption driven by declining battery prices as well as autonomous and ride sharing models, will present opportunities for utilities to increase their bottomline as loads are expected to grow and enable them to venture into new business models such as new rate plans and vehicle lease structures.

Publication: 
Publication Date: 
October 19, 2016

New sensor for driverless cars is smaller and cheaper

Quanergy, a startup based in California, has created a lidar for self-driving cars that is not only half the size of existing lidars but also cheaper. Its small size and cost can make better driverless cars. Called the S3, the new lidar is smaller than a camera with a weight of less than 11 ounces. It is also more advanced - it can scan objects and areas in higher resolution and greater range than other lidars. At a commercial price point of $250, the S3 is 32 times less expensive than a traditional lidar, and can produce half a million point-cloud data points a second. The sensors will be used in prototype cars next year and in commercial vehicles by 2018.

Key Takeaway: 

A new lidar system invented by Quanergy, which is more advanced, half the size and 32 times cheaper than existing lidars, can enable new designs for autonomous cars and develop smarter, more cost efficient vehicles.

Publication: 
Publication Date: 
October 16, 2016

Samsung cancels production of the Note 7

Samsung has officially ended the production and sale of the Note 7 over concerns that the phones overheat and catch fire after the replacement phones it sent out encountered the same kind of problem. The company has already asked customers to stop using their Note 7 devices. This decision will cost Samsung billions of dollars in lost sales. The US Consumer Products Safety Commission, Federal Aviation Administration and major airlines in the world have also asked users to stop using their Note 7s. Aside from the negative publicity and loss of brand trust, longer term issues arise like whether there should be more product testing and safety procedures in place before a product is announced or released, and whether other products will encounter the same problem as the Note 7 phones.

Key Takeaway: 

After its replacement phones encountered similar issues of overheating and catching fire, Samsung has decided to stop producing and selling Note 7 devices, which can cost the company billions of dollars.

Publication: 
Publication Date: 
October 11, 2016

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