BlackBerry Pulls the Plug On Producing Phones, Plus The Deal With Social Media Marketing

morning-brew-new
“Our view is automated vehicles—autonomous vehicles—could have just as much of an impact on society as Henry Ford’s assembly line” — Ford CEO Mark Fields, speaking at a Bloomberg Markets Summit yesterday. Ford ain’t messing around with this self-driving car business.

Market Snapshot

  • U.S. markets finished higher on the backs of a massive rally from the energy sector after OPEC was finally able to reach an agreement on cutting oil production (more on that later)
  • National Beverage Corp.—the maker of the increasingly popular LaCroix Seltzer Water—plummeted 16% after activist short seller Glaucus Research questioned the company’s accounting practices
  • Deutsche Bank mercifully rallied yesterday after the troubled company sold an insurance unit and a German newspaper reported that the government was working on a bailout plan—which was quickly denied

BlackBerry Pulls the Plug

…And ends the era of its ailing smartphone business. Time to get nostalgic. Not too long ago (think 2011), BlackBerry, once dubbed “CrackBerry,” reigned supreme in the global smartphone market. The BlackBerry became a status symbol and sales climbed rapidly, peaking at 52.3 million handsets sold in 2011.

But then it fell…precipitously. Bested by Apple (shoutout to the OG iPhone in 2007) and other smartphone giants, BlackBerry hit rock bottom —and boy was it a long way down. Yesterday, after the company reported a measly 3.2 million handset sales last quarter, CEO John Chen announced that the Canadian company will stop making phones altogether, solely focusing on software and security services. BlackBerry’s game plan is now focused on emphasizing its lower cost, higher margin businesses, and investors took a liking to it: shares finished up 5% yesterday.

London’s Calling

…Apple will open a new HQ in London in 2021. The tech giant announced yesterday that it’s planning to combine its various London offices into one massive headquarters at one of London’s most historic landmarks. Nice, but that’s not all on the fruity front. Apple also announced a partnership with consulting firm Deloitte, with the two companies forming Enterprise Next. Through this service, Deloitte consultants will advise clients on using Apple devices. Think that’s a busy day? There’s more: Apple has also reportedly increased its component orders for the iPhone 7—a sign that the company is expecting strong sales. What a hump day.

Self-Driving Wizardry

…Isn’t just for cars. Otto, a self-driving truck startup, announced yesterday that it plans to offer freight-hauling services using autonomous trucks starting in 2017. Now there’s an idea. Uber seemed to dig it too: you might recall that Uber bought the startup this past summer in a deal worth up to $680 million. With Uber’s resources at its disposal, Otto has a much better chance of hitting its 2017 deadline—and with Otto and UberEats at its disposal, Uber’s forays beyond its core business of human transportation are looking pretty good.

OPEC Shocks the World

…But for real this time. The mega-powerful oil cartel was having a little get-together this week in Algeria (we hear it’s beautiful there this time of year). The topic at hand: should the 14 OPEC nations, which collectively produce around a third of all oil in the world, cut their production to raise prices? No one expected a cut to be agreed on—after all, OPEC’s last meeting in June ended without action. But yesterday, that changed in a big way: OPEC reached a surprise agreement that a production cut is necessary, with the details to be decided at the cartel’s next meeting in November. This is a big deal, since it’s the first time OPEC has admitted it’s got an oil problem since oil began its collapse in 2014 from $100 to its current $40-$50 range. Oil prices rose nearly 6% on the surprise agreement. We’ll see you in November when OPEC follows through (or doesn’t).

Other Stories

Economic Calendar

The Deal With Social Media Marketing

Social media sites were the previous big thing in advertising…and they’re still the next big thing. Although we here at the Brew occasionally rag on Twitter, we give credit where it’s due: according to the annual State of Retailing Online report, marketers are continuing to spend big bucks on social media advertising. The main takeaway? It looks like those annoying Facebook and Twitter ads aren’t going anywhere. Here are the findings:

  • 76% of marketers said they’ll spend more this year on social media marketing than last year, and 92% of retailers said they are currently investing in social media marketing to some degree—just behind those investing in good old fashioned email marketing.
  • When asked their fastest-growing marketing tactics, Facebook was the third most popular answer at 10%, only behind product listing ads (14%) and email (12%).
  • Don’t feel too bad for search engines like Google, Bing and Yahoo, though: 53% of marketers said they will increase spending on search engine optimization this year.
  • Why is social media beginning to surpass search engines? It’s all about new customers. Only 13% of retailers said search engine optimization is the best way to acquire new customers. Don’t believe us? Just Google it.

Interview Question of the Day

In a car race, the man who came two places in front of the last man finished one ahead of the man who came in fifth. How many contestants were there? (Answer)

Business Term of the Day

Kurtosis — A statistical measure that’s used to describe the distribution (skewness) of observed data around the mean, sometimes referred to as the volatility of volatility. It measures the combined weight of a distribution’s tails relative to the rest of the distribution. Kurtosis is used to describe trends in charts.

Food for Thought

Another reason to get excited for your next flight: longer walks. As planes get bigger and extra retail space becomes crucial, airport terminals are only getting longer. Worse yet, many of these airports are getting rid of those beloved speed boosters (moving walkways). Given Atlanta’s longest walk of 1.67 miles, maybe longer airports is America’s next great health trend.

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