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What's
Next: Apple at $1 trillion: Apple is leading Amazon, Microsoft and Alphabet in the
race to become the world's first trillion-dollar company, a distinction
that has become an obsession for Wall Street and the financial press,
if not for Silicon Valley.
Apple leads at $923 billion, but there are challenges ahead and behind:
iPhone sales, which account for 60% of revenue,
are extremely volatile. Meanwhile, Amazon,
at $786 billion, is growing so fast that it is currently on track to
eke out Apple later this year.
Apple will hold its annual Worldwide Developers Conference
next week in San Jose. The new slate of software and hardware will
likely determine whether or not Apple is first to cross the $1 trillion
threshold. We expect a heavy emphasis on artificial intelligence and
augmented reality, wearable technology and new apps and services.
In today's FT, Tim Bradshaw notes that
Apple's Services division -- iCloud, App Store, Apple Music, etc. --
"has been a model of consistency when placed next to the
feast-or-famine performance of the iPhone." But Services growth is
contingent on people using Apple hardware, and the latest iPhone and
Home Pod sales have disappointed.
The Big Picture: Apple and Amazon are headed
for a photo finish at the $1 trillion line. The innovations Apple rolls
out next week will be instrumental to its ability to maintain first
place and etch its name in the history books as the first
trillion-dollar company.
See you in San Jose ...
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PACIFIC
The Agenda
Welcome to PACIFIC. We're en route to Kara Swisher and Peter Kafka's Code
Media Conference in Palos Verdes, which is consistently one
of the newsiest -- and most enjoyable -- conferences of the year.
This year's speakers include Brad Smith, Sheryl Sandberg, James
Murdoch, Dara Khosrowshahi, Ev Spiegel, Daniel Ek, Brian Chesky,
Joe Tsai, Mary Meeker, Randall Stephenson and Senator Mark Warner,
among others.
Follow along here.
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Beijing Rising
China tariffs return
Last week, Steve Bannon told me that
Steven Mnuchin and "the Wall Street clique" had screwed up
President Trump's plan to impose steep tariffs on China. Today, it
looks like Trump has reversed course.
"The China tariffs are back on" by
CNNMoney's Donna Borak and
Nathaniel Meyersohn:
• The White House says it will "proceed with its proposal to
impose 25% tariffs on $50 billion worth of goods from China, and place
new limits on Chinese investments in US high-tech industries."
• "The White House said the president plans to take 'multiple
steps' to protect domestic technology and intellectual property from
certain 'discriminatory and burdensome trade practices by China.'"
• "Treasury Secretary Steven Mnuchin said a trade war with China
was 'on hold' less than 10 days ago. ... Commerce Secretary Wilbur Ross
is expected in Beijing on Saturday to help ease trade tensions."
The X Factor: Peter Navarro. President
Trump’s nationalist trade adviser now appears to have the edge over
Mnuchin, sources close to the administration tell me. The two men got
into an expletive-laden shouting
match at the Beijing talks earlier this month after Navarro
grew frustrated with Mnuchin for ceding so much ground to the Chinese.
The Big Picture: The Trump administration's
inability to come up with a consistent approach to China is prolonging
talks and negotiations, which works to China's advantage as it works to
become the world's dominant technological superpower by 2025.
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WHAT XI
JINPING IS READING
"Two of the
world's biggest brands are now Chinese" by CNNMoney's Alanna Petroff:
"A new list of the world's most valuable brands is out, and China
has claimed two of the top spots for the first time."
Tencent
is #5, Alibaba
is #9.
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