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Winner and loser of the week: counting the cost of trust

Winner and loser of the week: counting the cost of trust

Trust - what is that actually? A feeling? In any case, trust is a necessity in our society, especially when it comes to money. Our winners and losers of the week have built trust, but they have also suffered breaches of trust. And it was always about money - a lot of money.

After last week my dear colleague David already had problems deciding between all the winners and losers from our tech bubble, I'm not doing much better right now. Many annual financial statements and quarterly figures reached our press mailbox this week, including Apple with record figures or LG with a minus in the mobile sector. But we've also heard about new emojis for a more tolerant use of the net, or we've gotten excited about dents and bumps as a feature of a $1,500 mobile phone. So who's winning and who's losing this week? I have been looking for the lowest common denominator to make this decision, and that is, as you can already guess, trust.

Winner of the Week: Tesla gains confidence and sales

Elon Musk will be laughing all the way to the bank. His mission to grow Tesla into a billion-dollar company is progressing inexorably. The electric car company even overshot its target last year and recently announced a profit of $105 million in the last quarter of 2019 alone, which naturally created confidence in the stock market: the shares shot up by seven percent after the announcement of the successful year 2019.

AndroidPIT tesla model 3 side
Tesla Model 3: in 2020 it could be seen more often on the streets. / © AndroidPIT

Despite all the critics, Tesla is proving that the company is more in demand than ever. Now it expects to sell at least 500,000 cars in California in 2020. That's not unlikely, given that the mass production of the Tesla Model 3 has only really just started. In addition, Tesla was already able to increase its sales by 50 percent in 2019 compared to the previous year with 367,500 delivered EVs. One trusts in further customers.

Elon Musk is probably very interested in keeping the company's rapid growth going. If Musk maintains the company's current market value of $100 billion over the next six months, he will receive a $250 million share of the success. The 48-year-old is looking at $50 billion if he can generate a company value of a staggering $650 billion in the next nine years. Tesla and its mutual trust with customers and investors is overall my winner this week.

Loserof the Week: Apple's blind trust costs millions

Apple would also have deserved to stand in Tesla's place, had it not been for the bad news that arrived at the last second. Defeat in a patent dispute against the Technical University of California (Caltech). As much as $837.8 million is the cost Apple has to pay for blind trust to supplier Broadcom, which is said to have violated patent rights of Caltech. Broadcom's punishment is milder: the company is also expected to pay Caltech around $270 million dollars in additional damages. A billion-dollar breach of trust. The result of the legal dispute between Apple, Broadcom, and Caltech, which has lasted for about four years, makes the big Apple my loser of the week.

In concrete terms, the legal dispute was about the Wi-Fi standard 802.11n, which is probably only too well known to you and which was used on more and more devices from 2009 onwards. The successor to the 802.11g standard enabled us to achieve higher data rates with our devices thanks to MIMO modulation methods and the use of both 2.4 and 5 GHz frequency bands. The standard was replaced by the current 802.11ac standard as early as 2013 - annoying for Apple that it now has to deal with such legacy issues. At that time the standard from iPhone to Apple Watch and iMac to AirPods landed on almost all Apple products that contained Wi-Fi chips from supplier Broadcom - without user licenses.

But the verdict should only slightly dampen the joy in Apple's house, as 2019 was a brilliant year for the iPhone inventors: with record sales of $91.8 billion. Profits rose by a whopping nine percent compared to the previous year. Apple will probably pay the damages to Caltech out of petty cash - if they pay at all - because the company has appealed against the ruling together with Broadcom and despite the crisis, Apple continues to stand behind its valuable supplier. Now it is time to forget and build new trust.

Tell me, who were your winners and losers of the week?

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