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Twenty years after the dotcom crash, is tech’s bubble about to burst again? | Business

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‘Everybody loves a party … but, inevitably, after a big party there’s a hangover,” billionaire investor Stanley Druckenmiller said last week as stock markets seesawed amid fears that a new tech bubble was about to burst. “Right now, we’re in an absolute raging mania,” he said.

And at times it did look like a tech bubble was about to burst again. Last Tuesday, Tesla’s shares fell 21% and Elon Musk’s net worth plunged $16.3bn (£12.7m), the largest single-day wipeout ever for a member of the Bloomberg Billionaires Index. Amazon’s founder, Jeff Bezos, lost $7.9bn. The whiplash continued throughout the week but, for many market watchers, it is still too soon to call time on tech’s stellar rise.

The sums lost are mind-bending – Musk’s $16.3bn loss is the amount China (population 1.4 billion) set aside to tackle coronavirus in March. However, the losses have hardly dented the historic fortunes the “techno-crats” have built during the technology boom and, for now, tech’s dominance seems intact.

The US tech giants have been on a tear for a year and have only increased in value since coronavirus hit the US. Last Friday, Bloomberg pegged Bezos’s fortune at $184bn, up $69.3bn from the start of the year. Even with Tesla’s recent heavy losses, Musk’s fortune is up $64bn for the year, ending Friday at $91.5bn.

If this is a tech bubble, it is made of stronger stuff than the one that burst at the turn of the millennium. That bubble was epitomised by young startup companies such as Pets.com, which went out of business just nine months after its much-hyped share sale. This one is being inflated by some of the biggest, most profitable companies the world has ever seen.

Alan Patrick, co-founder of analytics firm DataSwarm, has seen his share of tech bubbles and, while he sees plenty of “froth” at the moment, he doesn’t yet consider this is a bubble about to pop. Even today, with tech stock prices still so high, he said, we may only be at the “foothill of bubble phase”.

Elon Musk lost $16.3bn off his net worth as tech stocks wobbled.



Elon Musk lost $16.3bn off his net worth as tech stocks wobbled. Photograph: Patrick Pleul/AP

“The rise has mainly been from companies that stand to profit hugely from a world that has a ‘phase shift’ to a more digital, less physical world – Zoom, Amazon, Microsoft, Netflix, Apple all benefit hugely, as do the Covid drug and healthcare companies whose shares have rocketed,” Patrick said.

One big difference between today’s tech titans and their dotcom predecessors is size. These are huge companies that, in the main, also make huge profits. Last month, Apple’s valuation passed $2tn, the first US company to pass that milestone. Earlier this month, Apple was worth more than all the companies listed on the FTSE 100 index of the UK’s biggest firms combined.

Business has boomed for Apple, Amazon, Facebook and Google even as the wider US economy has collapsed. Tech has been a safe haven, and an industry achieving growth, at a time when investors have struggled to find safety or growth elsewhere.

But just because the situation is different this time, it doesn’t mean there isn’t a tech bubble to burst. “All of the elements of a bubble environment remain in place,” the strategist Chris Senyek of Wolfe Research wrote in a research note last week. And that bubble, he argued, was most inflated in the Nasdaq 100, the tech-heavy stock index whose biggest components include Apple, Amazon, Microsoft, Alphabet (Google’s parent), Facebook, Netflix and Tesla.

Nasdaq composite index

Approximately 29 million people are still on unemployment benefits in the US, and there are signs that the economic bounce-back from the coronavirus lockdowns has slowed. And yet US stock markets have remained close to their heady highs as the Federal Reserve has put its weight behind them and kept interest rates at close to zero.

But for Senyek and others, the recent wobbles may signal trouble ahead. “Typically, bubbles are unwound when the Fed takes away the punchbowl. Obviously, this is very unlikely to happen any time soon. However, this bubble can still be unwound by sustained economic disappointments,” he wrote.

The recent selloffs came after tech shares were driven to new highs by decisions by Apple, Tesla and others to split their stocks, a move that made them cheaper to buy but did nothing to change the fundamentals of their businesses. They were also pushed higher by a huge bet on tech by the Japanese conglomerate SoftBank that was tied to around $50bn worth of individual tech stocks.

The real problems may emerge only when the pandemic ends. Tech thrived as the world moved online, but will we ever want to Zoom again once it’s over? Yes, some fundamentals have changed – bricks-and-mortar shopping, deeply troubled before coronavirus, may never return to its old levels. But tech’s current dominance may also wane once the real world reopens.

Then there are the political headwinds. With coronavirus and the US elections dominating the headlines, tech’s growing monopolies have become a side issue. But if Europe and the US government have become increasingly concerned about Big Tech’s dominance, such concerns will only have been amplified by the lockdowns – and, post-virus and post-election, tech may finally face real political opposition.

DataSwarm’s Patrick said he would expect to see more classic bubble signs before any real blowout, such as “large numbers of consumers being sucked into investing – though that is starting, with new financial trading apps offering free share dealing and owning fractions of shares in companies”.

But he cautioned that in the current environment, anything was possible. There are too many factors that could lead to a stock market blowout, including a second wave of Covid infections, the possibility of more dire economic news or the outcome of the US election – arguably the most volatile in living memory.

“I don’t think there has been a time, probably since the end of the Cold War, when there are so many highly possible very large shocks that could stop the developing bubble in its track and crash it,” he said.

If and when that unwinding will happen is anyone’s guess. “I have no clue where the market is going to go in the near term. I don’t know whether it’s going to go up 10%, I don’t know whether it’s going to go down 10%,” Druckenmiller told CNBC.

“But I would say the next three to five years are going to be very, very challenging.”

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Moonpig confirms £1.2 billion float as London awaits more tech IPOs

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LONDON — Online card retailer Moonpig has confirmed that it plans to go public on the London Stock Exchange in a £1.2 billion ($1.6 billion) float next month after demand for its cards surged during the coronavirus pandemic.

Moonpig, which also operates the Greetz brand in the Netherlands, said Tuesday that it will list at least a quarter of the company on the exchange’s main market through an initial public offering.

U.S. investors BlackRock and Dragoneer have agreed to spend £130 million on Moonpig shares when shares start trading in February.

Moonpig Chief Executive Nickyl Raithatha is expected to make £11 million from the IPO, according to The Guardian newspaper, while chair Kate Swann is likely to make £7 million.

“As leaders of a market undergoing an accelerating shift online, we’re delighted to bring Moonpig Group to the public market. Our data-powered technology platform makes it incredibly easy for our customers to create more special moments for the people they care about,” said Raithatha in a statement.

Moonpig, which has around 450 employees, is expected to publish its full IPO prospectus next week.

Founded in 2000, Moonpig is the clear online market leader in cards, holding a 60% market share in the U.K among online card specialists in 2019, according to estimates by consulting firm OC&C.

The London-headquartered company announced its intention to float last week, saying that it had amassed 12.2 million active customers by Oct. 31.

The Moonpig website features over 20,000 cards and a range of gifts including flowers, mugs, and chocolates. Customers order 46 million cards a year and 7 million gifts, Moonpig said.

For the financial year ending Apr. 30, 2020, Moonpig Group’s revenue was £173.1 million, with £126.5 million contributed by the Moonpig segment and £46.6 million contributed by the Greetz segment. The company said its revenue grew 44% between the financial year of 2019 and 2020.

Moonpig is the first U.K. tech IPO of the year but there are a queue of other companies preparing to go public.

Food delivery service Deliveroo is reportedly planning to list in April at a valuation of between $8 billion and $13 billion, while currency exchange app Transferwise may also go public. Elsewhere, cybersecurity firm Darktrace and pension pot provider Pension Bee are also looking at potential stock market listings.

Many of the U.K.’s biggest tech firms have traditionally opted to list on the tech-focused Nasdaq market or the New York Stock Exchange in the U.S. However, the London Stock Exchange has been trying to convince them to list at home in recent years.


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China’s pivot to Europe in light of the tech war with the U.S.

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SINGAPORE — China’s agreement with the European Union could pave the way for Beijing’s “dual circulation” strategy of being self-reliant in technology while still remaining a part of the global supply chain, an academic told CNBC.

Last year, the Chinese government came out with a batch of policy terms to bolster its economy, putting them under a vague umbrella term of “dual circulation.” The phrase refers broadly to two circles of economic activity — internal and external — with greater emphasis than before on business at home.

“Dual circulation is such an important point in the middle of this China-U.S. tech war,” said Winston Ma, an adjunct professor of law at New York University.

The two superpowers continue to fight for technological dominance and superiority. Reuters recently reported that in its final days, the Trump administration notified Huawei suppliers that it was revoking certain licenses to sell to the Chinese tech company. Huawei had been caught up in ongoing tensions between the U.S. and China as sanctions from Washington seriously hindered its ability to do business globally.

Ma told CNBC’s “Squawk Box Asia” on Tuesday that a EU-China investment treaty, if passed, may potentially give Beijing an option to circumvent the United States altogether.

“You can see this dual circulation is balanced by focusing on domestic innovation and at the same time to try and find somewhere, other than the U.S., to get to the external circulation such that the global supply chain, the global innovation dialogue can still happen in the middle of China-U.S. tension,” he said.

The European Union’s executive arm, the European Commission, last month announced an investment deal with Beijing that followed seven years of negotiations. The deal would still have to be approved by the European Parliament before implementation and lawmakers have already raised major concerns with the agreement. Ma expects it to be approved by this year.

Experts have said that tensions between the U.S. and China fosters disconnect between the technology development in both countries — the situation is frequently referred to as tech “decoupling.”

Ma said some of that split is already happening and pointed to China’s focus on bolstering its domestic semiconductor industry by putting funds into local research and development. Early last year, U.S. lawmakers also proposed funding to develop 5G alternatives to Huawei. “What we are really seeing is both countries are promoting innovation but promoting innovation in a way to be independent from each other. To that extent, the decoupling is really happening,” he added.

It is not clear that President-elect Joe Biden’s administration would reset relations with Beijing, according to Ma. “I would say there’s a lot of uncertainties,” he said.

While the Biden administration has the power to suspend U.S. sanctions already in place, Ma said they could also choose to keep them “and they can even put on more restrictions to these Chinese companies.”

Smartphone maker Xiaomi, for example, was recently added to a blacklist of alleged Chinese military companies by the Trump administration. Biden could potentially add the Chinese firm to the Entity List that can restrict American companies from exporting technology to Xiaomi, Ma said.


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Galaxy Buds Pro review: Samsung’s AirPods Pro-beating earbuds | Samsung

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Samsung’s latest Galaxy Buds Pro earbuds add noise-cancelling, virtual surround and improved sound, making them a challenger to Apple’s AirPods Pro.

At £219, they are the new top-of-the-range earbuds from Samsung, sitting above the £179 Galaxy Buds Live and £159 Galaxy Buds+.

The Buds Pro have silicone ear tips and a general shape similar to the Buds+ but look more like the Buds Live. They are stored in an excellent, compact, square charging case that easily fits into the money pocket of a pair of jeans.

Samsung Galaxy Buds Pro
The design of the Buds Pro is an amalgam of the company’s previous efforts. Photograph: Samuel Gibbs/The Guardian

The new earbuds are bigger and heavier than the Buds+ and do not twist to fit in the concha of your ear in quite the same way, protruding slightly further, but are still small compared with rivals. They do a good job of avoiding putting pressure on the delicate parts of the ear, held in place by the oval ear tips – of which there are three sizes in the box.

They were comfortable and stayed securely in my ears but you can twist a small lip of the earbud under the cartilage of your ear to lock them in place if needed. The earbuds are water resistant to IPX7 standards, which means they can be submerged in up to one metre of water for up to 30 minutes, making them some of the most water-resistant earbuds available.

Specifications

  • Water resistance: IPX7 (one metre up to 30 minutes)

  • Connectivity: Bluetooth 5.0, SBC, AAC, SSC

  • Battery life: five hours ANC on (up to 18 hours with case; 28 hours with ANC off)

  • Earbud dimensions: 19.5 x 20.5 x 20.8 mm

  • Earbud weight: 6.3g each

  • Driver size: 11mm woofer + 6.5mm tweeter

  • Charging case dimensions: 50 x 50.2 x 27.8 mm

  • Charging case weight: 44.9g

  • Case charging: USB-C, Qi wireless charging

Connectivity and controls

Samsung Galaxy Buds Pro
The Galaxy Wearable app on Android handles pairing, controls, updates and noise-cancelling settings. Photograph: Samuel Gibbs/The Guardian

The Buds Pro support Bluetooth 5 with both the universal SBC and AAC audio standards used by most devices. But they also support Samsung’s own “scalable audio codec”, which can provide higher-quality audio but only works with Samsung devices. They are compatible with all standard Bluetooth devices and support automatic pairing with Samsung and other Android devices via the Galaxy Wearable app plus Swift Pairing with Windows 10 PCs. Unlike their predecessors, the Buds Pro are not supported by the Galaxy Buds app on an iPhone, so iOS users can use the earbuds but will not be able to change settings or update them.

The earbuds only connect to one device at a time but support seamless switching (so you don’t have to manually disconnect) and a new auto-switch system that can be used with Samsung devices running OneUI 3.1 or higher such as the new Galaxy S21 series. Either earbud can be used on its own.

Connectivity to a Galaxy Z Fold 2, iPhone 12, MacBook Air M1 and other devices was excellent.

The exterior of the earbud is touch sensitive. Tap once for pause/play, twice and thrice for track skip. A tap-and-hold gesture can be set to control the volume (left for down, right for up), control noise-cancelling settings, activate the voice assistant or trigger Spotify on compatible phones. Take both earbuds out and the music pauses; take only one out and ambient sound mode activates on the other. The controls work well with good audible feedback.

Battery life

Samsung Galaxy Buds Pro
The compact case charges via USB-C or wireless charging. Photograph: Samuel Gibbs/The Guardian

The earbuds last for up to five hours with noise-cancelling active and can be charged 2.6 times in the case for a total of 18 hours. Turn off noise-cancelling and the earbuds last up to eight hours and up to 28 hours with the case. Five minutes charging will add up to one hour of playback.

The case is charged via a Qi wireless charging coil in its base or the USB-C socket in the back. A cable is included in the box but not a power adaptor.

Sustainability

Samsung does not provide an estimate of the number of full-charge cycles the batteries in the case or earbuds should last. Batteries in similar devices can typically last for 500 cycles while maintaining at least 80% of their original capacity.

Samsung does not sell individual replacement buds or cases. The Buds Pro are repairable but unlike previous Samsung earbuds the battery cannot be replaced, ultimately making them disposable.

The earbuds and case are made from 20% post-consumer recycled materials. Samsung operates recycling and trade-in schemes for smartphones but not for its earbuds. The company publishes annual sustainability reports but not impact assessments for individual products.

Excellent sound

Samsung Galaxy Buds Pro
The oval silicone ear tips create a good seal aiding in bass and sound quality. Photograph: Samuel Gibbs/The Guardian

The Buds Pro take the easy-listening, everyday sound of the Buds+ and improve the audio quality in all dimensions. They produce rich and well-controlled bass, warm mids and precise high notes that make them some of the best-sounding true wireless earbuds available.

They handle many music genres well, with a wider soundscape than most earbuds. Acoustic, guitar-based tracks such as the live version of the Eagles’ Hotel California sound warm, inviting and full of detail. There’s plenty of punch and raw energy in grunge or rock tracks, while high-tempo electronica sounds suitably energised. The earbuds do an admiral job of rendering really deep bass, while even orchestral scores such as Holst’s Planet suite sound grand and full of nuance.

Occasionally, you can get hit with a little too much treble, such as overly prominent trumpets at higher volumes, but overall they sound really great, matching top rivals such as the Jabra Elite 85t. There’s a limited equaliser that can switch between preset modes such as “dynamic” or “bass boost” in the companion app.

Active noise cancelling

Samsung Galaxy Buds Pro
Mics on the outside, including inside a wind-noise reducing chamber, detect unwanted noise that is then cancelled out. Photograph: Samuel Gibbs/The Guardian

The Buds Pro have several active noise-cancelling and ambient sound modes. There are two levels of noise-cancelling available. On high, the noise-cancelling is effective at reducing low rumbles and some mid-frequency sounds but falls slightly short of the effectiveness of the Elite 85t and AirPods Pro. The Buds Pro were also affected to a greater extent by the fit of the earbuds – twisting and locking them in place against the inside of my ear significantly improved the amount of noise they blocked out.

The ambient sound mode, which pipes the noise of the outside world into your ears, has four levels and can be automatically triggered when the earbuds detect you speaking. It works pretty well for quick conversations or hearing announcements but doesn’t sound as natural as the best available.

The earbuds also have Dolby technology that tracks the movements of your head in relation to a phone or tablet to create a virtual surround sound Samsung calls 360 Audio. It only works with devices running Samsung’s latest software OneUI 3.1 but, unlike rival systems from Apple and others, it is able to create the virtual surround effect for any video, not only those with Dolby soundtracks, anchoring the sound to the screen. The effect is surprisingly good.

Observations

Samsung Galaxy Buds Pro
The case is easily pocketable, which helps keep the buds safe and charged. Photograph: Samuel Gibbs/The Guardian
  • You can set Samsung’s Bixby voice assistant to listen for the wakeword “Hey Bixby”.

  • Game Mode reduces latency for audio that is in sync with the action on screen for games with Samsung devices.

  • Call quality was reasonable: my voice was clear and background noise was minimised but I sounded a little distant and not as crisp as the best rivals.

  • Sneezing, blowing my nose and coughing triggered the auto-ambient sound mode when active.

Price

The Samsung Galaxy Buds Pro cost £219 and are available in black, silver or purple, shipping on 28 January.

For comparison, the Galaxy Buds Live have an RRP of £179, the Galaxy Buds+ cost £129, the Jabra Elite 85t cost £219.99, the Bose QC Earbuds cost £249.95, the Sony WF-1000XM3 cost £149 and the Apple AirPods Pro cost £249.

Verdict

The Galaxy Buds Pro are Samsung’s best true wireless earbuds yet.

They pack excellent sound with solid noise-cancelling into small and comfortable earbuds without stalks, which have good battery life and a great, compact case – a combination that’s still hard to find. They are also water-resistant to a high standard, which can’t be said for most competitors, and are made with recycled materials.

They are not cheap, costing £219, which puts them in the top end of the market, beating Apple’s AirPods Pro on sound but falling short of the Jabra Elite 85t on noise-cancelling. If other Samsung earbuds are any indication, you should be able to find them with a reasonable discount if you shop around in the near future.

Unlike previous Samsung earbuds, the batteries in the Buds Pro cannot be replaced, which is a disappointing step back and ultimately makes them disposable, similar to most other true wireless earbuds, losing them a star. Samsung does not recycle the earbuds either. They can be used with an iPhone but are not supported by the Galaxy Buds app, so you can’t change the settings or keep them up to date.

The Galaxy Buds Pro are Samsung’s true AirPods Pro-beaters for Android – an excellent set of premium everyday true wireless earbuds.

Pros: great sound, solid noise-cancelling, seamless switching, good controls, comfortable fit, excellent case, solid battery, no stalks, IPX7 water resistance, made of recycled materials.

Cons: expensive, battery cannot be replaced, some features restricted to Samsung devices, can only connect to one device at a time.

Samsung Galaxy Buds Pro
The earbuds clip into the case via magnets and the lid shuts with a satisfying snap. Photograph: Samuel Gibbs/The Guardian

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