Week in a Nutshell #16

Welcome to the sixteenth episode of the 'Week in a Nutshell’ series,

It was a very busy week for the tech world. I believe the highlight of the week was the Tesla Powerwall announcement that confirmed Tesla's entrance to the energy sector.

Headlines:

  1. Tesla’s $3,000 Powerwall Will Let Households Run Entirely On Solar Energy
  2. Apple sold a whopping 61 million iPhones in Q2 2015, disappoints with 12 million iPads
  3. Twitter Collapses 18% In Wake Of Lackluster Q1 Revenue, User Growth
  4. A Founder of Secret, the Anonymous Social App, Is Shutting It Down
  5. Windows 10 can run reworked Android and iOS apps

Tesla’s $3,000 Powerwall Will Let Households Run Entirely On Solar Energy

Tesla, well known for its engineering and design state of the art electric cars, has recently announced Powerwall Home Battery system.

Source: Tesla

Powerwall, white box positioned left side of the image, charges itself using solar power and it has the capability to provide a power output of 7kwh for its residential model. Also, there will be another model that can provide 10kwh for houses that need more power during the day. It will also be possible to stack up to 9 Powerwalls if you still need more energy. 

When you think about your energy consumption at home during the day, you will observe there are 2 peak times; before going to work and after you get back home from work. Since the demand for energy goes up during these 2 time periods, energy companies tend to charge extra per electricity unit. Biggest advantage of Powerwall is it can store the solar power throughout the day and then provide that stored energy to you during these peak times so that you will benefit from cheaper electricity.

Tesla also announced the Powerpack model which mostly targets enterprise use cases. During the announcement, Powerpack is described as an infinitely scalable power network. Powerpack consists of battery blocks and it looks very similar to a network server. Powerpack can provide an power output that can be scaleable from 500 kwh to 10 Mwh and even higher. Elon Musk stated that Tesla's newest battery production factory, Gigafactory will be powered only by Powerpacks. What a compelling way to showcase your product!

After conquering many hearts with electric cars, now Elon Musk is leading Tesla to encouraging the world for a new transition to use renewable energy. 


Apple sold a whopping 61 million iPhones in Q2 2015, disappoints with 12 million iPads

Apple shared its Q1'2015 earnings on Monday last week.

Q1'2015 Revenue: $58 billion ( +27% growth vs. Q1'2014)
Q1'2015 Profit: $13.6 billion (+33% growth vs. Q'2014)

Apple holds $193.5 billion worth of cash and marketable security as the end of Q1'2015. To better understand how big this number is let's compare it with the GDPs of 2 European countries. According to 2013 statistics, GPD of Turkey and Greece were $822.1 billion and $242.2 billion respectively.

Q1'2015 iPhone sales: 61.2 million (+40% growth vs. 43.7 million in Q1'2014)
Q1'2015 Macbook sales:  4.56 million ( +11% growth vs. 4.1 million in Q1'2014)
Q1'2015 iPad sales: 12.6 million (-23% decrease vs. 16.3 million in Q1'2014)

Apple's iPhone sales growth in this quarter is truly extraordinary. Tim Cook stated that they noticed a higher rate of people switching to iPhone than they have experienced in previous cycles. This is a great sign of iPhone 6 and iPhone 6 Plus models are a great success and influencing end users to switch to iPhones from other mobile phone models.

iPad sales decline also continues and I believe this is a bit worrying for the tablet market. It is either a sign for tablet market saturation or there is a user segment whose needs are not satisfied with the existing iPad models due to pricing or functionality. I think Apple is getting ready to revive the iPad business by launching a new potentially 12" model to address the needs of the enterprises user segment. 12" model would create new use cases for iPads and generate sales. I'm looking forward to Apple's new iPad announcement event.


Twitter Collapses 18% In Wake Of Lackluster Q1 Revenue, User Growth

Twitter Q1'2015 financial report was leaked to press before the scheduled earnings call. Leaked information showed that the Twitter missed the Wall Street's financial expectations by far and this led a significant drop in its stock prices by approximately 20%.

Q1'2015 Revenue: $436 million (+74% growth vs. Q1'2014)
Q1'2015 Loss: $162 million (Q1'2014 Loss: $132.3 million)

Twitter's and Wall Street's Q1'2015 revenue expectation was $456.8 million so Twitter not only missed the Wall Street's expectation but also missed its own previous estimation. As a result of this Q1'2015 performance Twitter announced that the revenue estimations for the rest of 2015 will also be adjusted. For example, Wall Street expected a revenue of $538.2 million for Q2'2015 but Twitter adjusted its revenue estimation to a range between $470 and $485 million. In addition, Twitter stated that it is not expecting Q2'2015 to be a profitable quarter.

I think Twitter's value in our lives is unquestionable. However, I believe Twitter needs to stabilize its revenue streams and profit graph which is going up and down over the last few quarters in order to start getting along with Wall Street and the investors.


A Founder of Secret, the Anonymous Social App, Is Shutting It Down

Nearly 1.5 years ago, Secret was on a hot streak receiving serious investments around $8.6 million followed by a $25 million worth of funding. Secret was one of the first players if not the creator of the anonymous messaging mobile app vertical. However, continuously declining user activity put the dagger into the chest of Secret. One of the founders stated that Secret will be shut down in couple of weeks.

It seems like Secret couldn't turn the tide for the declining user growth and it couldn't compete with the competitors such as Yik Yak and Whisper in this market. Secret fell as quickly as it rose.

I read couple of tweets stating that Snapchat will be the next one to go down after Secret. I don't agree with this as their user growth still continues and they managed to create a revenue stream through ads. Snapchat has not officially released any insights about their advertising revenue however let's keep in mind that Snapchat's user base is dominated by the youth demographics and there are numerous brands that are highly motivated to reach out to that demographic.


Windows 10 can run reworked Android and iOS apps

I believe the biggest downside of having a Windows Phone for now is you will envy your friends playing with the latest mobile game on their smartphone which is currently unavailable for Windows Phone and as a Windows Phone user, you know that you will be the last to get that mobile app in your Windows Phone.

I believe this is a vicious circle that hurts the Windows Phone brand and sales performance. From an end user perspective, users end up not buying a Windows Phone knowing that they won't be able to find the latest / popular apps immediately in the Windows Phone app store. This leads to Windows Phone user base not growing to a certain threshold. From a mobile app developer perspective, developers want to publish their mobile app as soon as possible for the platform which has the biggest and most engaged user base. This is also one of the reasons why developers prioritize iOS over Android. Since Windows Phone lacks that significant user base, developers rank iOS and Android over Windows Phone. In other words, this a chicken and egg problem. 

Microsoft is taking a huge step to break that vicious cırcle. Last week Microsoft announced the launch of 2 software development kits for Windows 10 that would enable mobile app developers to port their iOS and Android apps to Windows 10 with ease. To make the announcement even more powerful, they stated that Windows Phone version for Candy Crush was actually ported from the iOS version using these 2 development kits.  

Non-native, hybrid and ported mobile apps often times have performance issues compared to the native apps. However, if these 2 development kits enable mobile app developers to overcome those performance issues than I believe Windows 10 might bring the best of iTunes App Store and Google Play Store into the Windows Phone app store really quick.


We came to the end of the sixteenth episode of ‘Week in a Nutshell’ series. If you enjoyed this post, I'd be happy if you could comment, share, like and/or recommend it. 

Thanks,
Birkan