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May 22, 2019

Situational awareness: A federal judge in San Jose ruled against Qualcomm in a dispute with the Federal Trade Commission, finding Qualcomm broke antitrust laws and overcharged other firms for access to its patents, per WSJ.

Congrats to the St. Louis Blues, who defeated my beloved San Jose Sharks and will face the Boston Bruins with a shot to win their first Stanley Cup. (I wonder if Kendall Baker introduces Axios Sports with the latest in tech news.)

1 big thing: The new tech cold war with China

Illustration of two toy army men pointing guns at each other while frozen in ice cubs. One army man's hat bears the Chinese star, the other, American stripes.
Illustration: Aïda Amer/Axios

The march toward a tech Cold War between the U.S. and China is continuing, but both sides are ignoring the reality of just how much they need each other. The 2 nations certainly would like to be independent, but today neither one's vast tech economy can function without the other.

Between the lines: People think of China's internet as mostly separate from ours, not only because of the language/alphabet differences but also because of different laws, different culture and a separate set of dominant internet firms (like Baidu and Tencent).

  • Yes, but: That separation masks just how interconnected the 2 countries' technology industries are, particularly at the hardware level.

Why it matters: A continued trade impasse will likely mean lots of pain on both sides of the Pacific.

  • The U.S. relies to a vast degree on China to manufacture many key products.
  • China, on the other hand, depends on software and chips from the U.S. for its devices and data centers.

By the numbers: According to CompTIA, the U.S. exported $19.3 billion in tech products and services to China last year, accounting directly for more than 52,000 jobs.

  • And while China exports far more technology to the U.S. — an estimated $187.7 billion worth — those products include gear that is designed in the U.S., including Apple iPhones, Amazon Echos and Google Nest thermostats.

The latest: The Trump administration's ban on business with Huawei has highlighted those ties, with the global telecom industry facing a significant quandary.

  • The goal is to keep Huawei from being a part of 5G networks, but 5G is built on top of existing 4G gear.
  • And lots of networks outside the U.S. — and even some rural networks here — already include Huawei equipment. Ripping out that gear would cost a fortune and significantly delay the rollout of 5G.

At the same time, the trade war has sent U.S. companies scrambling to find other countries to produce their gear, hurting one of China's largest tech industries.

  • Already earlier this year, companies including Cisco, Nokia and GoPro, were looking to diversify their manufacturing to avoid being a casualty in the trade war. The shift is already taking a toll on Chinese tech manufacturers, I'm told.

Meanwhile, tensions continue to escalate.

  • The New York Times reported late Tuesday that the administration is considering whether to ban Hikvision, a giant Chinese manufacturer of video surveillance equipment, from buying U.S. components. Several other Chinese firms could also face a ban, per Bloomberg.
  • U.K.-based ARM is cutting Huawei off as well, according to the BBC. ARM's designs underlie most modern mobile chips, and without access to them, Huawei's plans to replace U.S.-made chips with its own could falter.

What they're saying: While U.S. tech giants are staying largely quiet on the latest escalation, leading trade groups representing those companies told Axios they are urging both sides to come to the negotiating table.

2. Apple revamps keyboard on MacBook Pro laptops

Apple's new MacBook Pro features a faster processor and a redesigned keyboard.
Photo: Apple

Aiming to address the single biggest criticism of its laptops, Apple debuted new MacBook Pros with what it says is an improved keyboard, along with faster processors.


  • The new 15-inch and 13-inch models have keyboards made with "new materials" that should help prevent keys from showing up twice or not at all. Apple declined to go into any further specifics.
  • The updated laptops also include faster processors and are priced the same as the models they replace.
  • Apple is also expanding its keyboard repair program to cover more laptops — including the just-introduced models — to extend beyond traditional warranty coverage.

Why it matters: The so-called butterfly keyboards had become a costly issue for Apple, both in terms of repairs, reputational erosion, and even customers delaying purchases to stick with older models with more reliable keyboards.

Full dislosure: Two of the keys on my MaBook Pro don't always show up and another one tends to show up twie.

3. Amazon turns warehouse work into a game

How do you get through a long, tedious task? Why, make a game out of it, of course.

Amazon has done just that, creating various video games allowing those in its warehouse to compete against one another, according to a report in the Washington Post. Fast Company managed to grab a blurry photo of one of the games during a recent visit to an Amazon warehouse.

Our thought bubble: Making a game out of work can add some levity, but isn't an answer to more serious issues around working conditions.

  • Plus, pitting workers against each other could end up more gladiatorial than fun.

4. Square takes on CBD business

Square is taking a baby step into the cannabis industry, with a pilot program processing payments for products containing cannabidiol, or CBD.

What's new: Confirming a report in The New Consumer, a Square representative said it's an invite-only beta program for now. It applies only to products with CBD, not those containing THC, the psychoactive component of marijuana.

Why it matters: One of the big hurdles in the canna-business is finding companies to help with the money, particularly as, broadly speaking, marijuana remains illegal at the federal level.

5. Take Note

On Tap

  • WSJ's Future of Everything conference continues in New York and Collision continues in Toronto.
  • FCC commissioner Geoffrey Starks will give his first speech since being confirmed as a commissioner, speaking at Georgetown University at the conference of the Partnership for Progress on the Digital Divide.

Trading Places

  • Vice Media hired former Mic publisher Cory Haik to be its chief digital officer. (Variety)


6. After you Login

This hide-the-ball trick play in college softball was evil genius. And won Trine University a trip to the Division III College World Series. (Hat tip to the aforementioned Kendall.)