Aug 25, 2020

Axios Login

By Ina Fried
Ina Fried

RNC Week: Join Axios co-founder Mike Allen tomorrow at 12:30pm ET for a live, virtual event on the future of the Republican Party, featuring U.S. Department of Housing and Urban Development Secretary Ben Carson and Miami Mayor Francis Suarez.

Situational awareness: Apple can't cut Epic Games off from developer tools but also doesn't have to immediately restore Epic's Fortnite to the App Store, a judge ruled late Monday. The developer access issue threatened to affect many other developers that use Epic's Unreal game engine.

Today's Login is 1,306 words, a 5-minute read.

1 big thing: What tech is (and isn't) selling during the pandemic

Illustration: Eniola Odetunde/Axios

Sales of PCs, webcams and other tech products that help people work, learn and play at home are up, while products designed for the highly mobile are losing ground.

The big picture: The pandemic has shifted where Americans spend their time — and, consequently, where they are spending their tech dollars.

What's happening: Home computers, and related accessories like web cams and external monitors, are flying off the shelves, as so much of our work and school lives have moved to remote setups that demand such hardware.

  • Laptops in general, and Chromebooks in particular, are in high demand given their popularity for students. Touchscreen models are especially sought after by parents of younger kids.
  • Even PC component sales are growing, as enthusiasts rediscover the satisfaction of building their own machine. "Consumers are looking for something to do," said NPD Group analyst Stephen Baker. "This had been a very steady market for many years but this type of growth is just astounding."

But those aren't the only products in high demand.

  • E-bike sales were growing before the pandemic but have spiked since March as people look for safer alternatives to shared options like public transit and ride sharing.
  • Printers, both laser and inkjet, have seen substantial growth this year, as have sales of ink cartridges, which had not previously been rising. Ink printers are up 12% and laser printers up 33% from a year ago, per NPD.
  • TVs, soundbars and other devices for home entertainment are also seeing strong demand.

Yes, but: Other categories are taking a hit.

Smartphone sales had already been slowing over the last few years, but that slump has become a sharp downturn during the pandemic.

  • Smartphones are still seeing heavy use even if people are using them more over WiFi and less over cellular networks.
  • But the upgrade cycle has been disrupted by factors including economic concerns and practicalities like people dropping their phones less often as they use them primarily at home.

Mobile accessories have taken a more direct hit — though some products remain strong sellers, per Chris Ahern, CEO of accessories maker Zagg Brands.

  • That includes anything that helps protect against germs, Ahern said, as well as — perhaps less expected — phone cases with built-in battery packs. That may be because people are holding on to their phones longer and need extra juice as their battery life flags over time.

Action camera maker GoPro is a surprising example of a firm that's seen sales rebound after an initial hit.

  • You might not expect many people to need a rugged waterproof camera during quarantine, but GoPro said it sold 750,000 cameras last quarter, 20% more than it had forecast in May.
  • The company is also benefiting from Zeus Mini, a recently introduced light that can illuminate video conference calls in addition to functioning as a head lamp or headlight alternative while camping.

Where it stands: The Consumer Technology Association (CTA) projects overall U.S. tech sales will drop 2.2% — the first yearly decline since 2009.

  • That's still better than most other sectors of the economy, which are seeing much larger drops.

What's next: Smart displays are one category that could be poised to take off.

  • Zoom is coming to Amazon's Echo displays as well as Facebook's Portal, which will also soon support Webex and is already seeing strong demand, with sales in May 10 times above those in mid-March.
  • And CTA predicts overall tech spending will rebound next year, rising an estimated 5.2%.
2. Facebook accelerates News tab launch abroad

Facebook is speeding the launch of its Facebook News tab in countries beyond the U.S., the company will announce Tuesday.

The big picture: Sources tell Axios' Sara Fischer that Facebook is working out deals to pay publishers in several countries to include their content in the News tab, just as the firm does in the U.S.

Yes, but: Australia won’t be getting Facebook News for the foreseeable future, a source confirms. Facebook is battling with Australian regulators who want to make it pay all publishers whose content gets shared on the platform.

  • Facebook is still in discussions with the Australian Competition and Consumer Commission about what a payout framework to publishers could look like.
  • Until the Australian rules are finalized, things could change, but statements from regulators suggest frustration in their negotiations with tech companies so far.

Details: Facebook is looking to accelerate the launch of Facebook News in multiple countries within the next 6–12 months, including the U.K., Germany, France, India and Brazil.

  • The tech giant is working closely with publishers of varying sizes and scope on tailoring the News tab to each country.
  • As in the U.S., not all participating publishers will necessarily be paid, and publishers that produce more content will likely receive bigger payouts.

Be smart: It's notable that the list includes France, the first country to ratify a new EU copyright law last year requiring tech firms to negotiate paying publishers for their content or risk being regulated.

The big picture: Facebook has come a long way from its initial stance of refusing to pay publishers or hire human editors just two years ago.

  • The company has worked aggressively to strengthen relationships with the news industry, which has long pushed regulators in Australia, Europe and elsewhere to scrutinize Facebook.
3. Pandemic reshapes Y Combinator startups

Illustration: Sarah Grillo/Axios

The latest startups from Silicon Valley accelerator Y Combinator that showed off their products at its demo day Monday are the first group to experience the entire three-month program under COVID-19's shadow, Axios' Kia Kokalitcheva reports.

What's new: The pandemic not only pushed the whole Y Combinator process fully online but in many cases also shaped the startups' choice of market and product, with many tackling suddenly booming areas like online education, e-commerce, and remote communications.

The big picture: It's not surprising to see so many companies building tools and services that are directly useful during the pandemic. Entrepreneurs are known to be easily inspired by a crisis or challenge, and YC's latest group is no exception.

For example:

  • Young kids' online education: Startups like Hellosaurus and Zipschool say they've built entertaining, yet educational video content for young children — a promise that's sure to appeal to exhausted parents.
  • E-commerce tools for small businesses: Companies like Hotplate, which lets chefs sell home-cooked meals online, and In Stock, which lets customers get products delivered from local retailers quickly, are tapping into the online shopping boom.
  • Remote work and socializing: Startups like workplace social network Mesh are building tools for the new era of remote work. Others, like video-chat startups Rally and Together Video Chat, are tackling remote socializing.
  • Online entertainment: Some startups are helping people like artists, entertainers and fitness instructors move their enterprises online. These include Jemi, which helps customers sell merchandise and virtual experiences like video chats to fans, and Reach.Live, which offers tools for running an online live content business.

Kia has more here.

Go deeper: The pandemic downturn might yield a new startup wave

4. Game engine maker Unity leads IPO rush

Illustration: Sarah Grillo/Axios

A host of niche technology firms announced plans to go public on Monday, led by Unity Software, a San Francisco-based company known for its popular video game engine, Kia and I report.

Why it matters: Unity’s move comes as its main rival, Unreal engine maker Epic Games, is under a cloud given its fight with Apple. It also comes amid the aforementioned run of tech IPO activity.

The big picture: In addition to Unity, enterprise tech firm Snowflake filed to go public, as did Sumo Logic and JFrog. Online project management service Asana, meanwhile, filed for a direct listing.

  • Despite Silicon Valley's spike in interest in the direct listing as an alternative to the traditional IPO, Asana will be only the third company to take that route after Spotify in 2018 and Slack last year.
5. Take Note

On Tap

Trading Places

  • Docusign named Microsoft veteran Kamal Hathi as chief technology officer. Hathi spent two decades at Microsoft in various roles and most recently has been chief product and technology officer at Trader Interactive.

ICYMI

  • As we said it would in yesterday's Login, TikTok officially sued the U.S government on Monday, challenging a proposed ban. (Axios)
  • Zoom had a widespread issue Monday morning that prevented some from initiating or logging into video chats and webinars. (Axios)
  • Apple acquired Spaces, a VR firm that recently pivoted to offering virtual reality video chat. (Axios)
  • Nintendo is reportedly planning to debut a more powerful Switch console that supports 4K resolution next year. (Bloomberg)
6. After you Login

Ikea tied into popular Nintendo game Animal Crossing for its latest catalog in Taiwan.

Ina Fried