Apr 24, 2020

Axios Login

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Today's Login is 1,459 words, a 6-minute read.

1 big thing: Coronavirus rewrites tech's product plans

Illustration: Aïda Amer/Axios

Despite the tech industry's relative health during the pandemic, tech product roadmaps and schedules have been revisited, shaken up and in some cases completely rewritten thanks to the coronavirus.

What's happening: Both giants and startups are trying to focus on projects that are doable, relevant and critical. Those that don't meet any of these criteria are likely to fall by the wayside.

The big picture: Although tech may be the best-positioned industry of all for an era of remote work, and companies in Seattle and the San Francisco Bay Area were among the first to send workers home.

It's still too early to know the full impact, but early casualties have already begun to surface.

Videogame development, as a whole, has been dramatically slowed, as noted by the New York Times.

  • Despite huge demand, the industry depends on developers being able to work in close collaboration, in central environments with tons of computing power.
  • Sony, for example, is delaying the original May release of its highly anticipated "The Last of Us: Part II."

This is surely just the start. In a recent interview with Axios, Box CEO Aaron Levie said he made the call several weeks ago that the coronavirus' impact would be much greater than initially assumed.

  • "This is probably going to alter our entire year in terms of product strategy," he said, adding that he expected the rest of his peers were reaching the same conclusion.

Between the lines: Here are some of the factors that lead to products being scrapped or delayed.

  • Supply chain issues: The tech industry, especially hardware, evolved as a creature of the global economy, with design in one country and manufacturing in another. That approach was complicated by U.S.-China tensions before COVID-19, but the halt to international travel has made it even harder for companies to transition their designs into production.
  • Offices closed: Yes, many people can do most of their jobs remotely. But some key tasks are handled in labs that are better suited to rapid prototyping and collaborative creation.
  • Looming layoffs: Many startups are already announcing job cuts, while even giants like Google say they are slowing hiring. And job cuts have an impact beyond the workers who are cut, diverting management attention and increasing anxiety and distraction for the entire workforce.
  • Shrinking budgets: Tech companies aren't just trying to do more with fewer people, but they are also trying to do things cheaper. For many startups, it's about saving precious cash, while even large public companies are looking to make the bottom line better (or less bad) for Wall Street.
  • It's a pandemic: As has been frequently noted, but not always fully internalized, this crisis isn't just a matter of working from home. It's people trying to get work done while tending to their own health and their families' — often adding homeschool teacher and caregiver to their other job duties.
  • Lower demand for many products: While there is renewed interest in tech for the home office and living room, other categories are likely to take a major hit. GoPro is one example here: It's hard to imagine many people who can barely leave the house opting to buy a new action camera.

Yes, but: Overall product output will probably slow, but some efforts are being accelerated.

  • Facebook CEO Mark Zuckerberg said that today at 11am PT he will show off a number of new product updates he says will "help everyone feel more connected with each other even while we're apart."
2. Social media use spikes during pandemic
Reproduced from Nielsen; Chart: Axios Visuals

While usage of many mobile apps has remained neutral during the coronavirus pandemic, social media app usage has exploded during the lockdown, Axios' Sara Fischer reports, citing new data from Nielsen.

Why it matters: Before the coronavirus crisis, consumers and tech companies were both becoming more aware of the overuse of social media and actively trying to limit it. In a time when people can't connect with friends and family in person, companies have put these efforts on pause.

By the numbers: Prior to the pandemic hitting the U.S., social media usage for most of January, February and early March remained relatively flat at around 20% of total mobile app usage, according to Nielsen's data.

  • But beginning in mid-March, when statewide stay-at-home orders went into effect, social media app usage began to increase significantly, and now consumes around 25% of all mobile app usage for U.S. adults.
  • Usage of other media apps, like video, lifestyle and finance apps, has mostly remained the same, in part because consumers are now using other devices, like desktops and television screens, for more activities while home.

The bottom line: The coronavirus pandemic is deepening users' immersion in social media at a moment when society had just begun to question it.

3. Intel shares fall on guidance uncertainty

Intel reported strong quarterly earnings Thursday but its shares fell in after-hours trading amid concerns around its near-term outlook.

Why it matters: Investors are trying to figure out what to expect from the tech sector as the impact of the coronavirus and related shutdowns works its way through the economy. Some parts of the tech sector would appear to still be seeing strong demand amid the shift to remote work and e-commerce.

Details: Intel’s Q1 revenue and earnings per share were ahead of estimates, and its Q2 revenue forecast was slightly above prior expectations. But its profit outlook for the current quarter was weaker than expected and the chip giant declined to offer a full-year forecast.

Between the lines: Intel has also benefited some from supply chain disruptions.

  • In what was shaping up to be a very tough competitive battle with rival AMD, Intel had been struggling to meet demand for PC processors.
  • PC components and manufacturing slowed in Q1 as the coronavirus swept through China, and that gave Intel a bit more breathing room.
  • Also, with everyone working remotely, corporate customers now have an incentive to maintain or upgrade their largely Intel-based systems rather than pick now to shift toward a rival architecture.

Meanwhile: Intel investors were also digesting a fresh Bloomberg report that Apple has developed multiple in-house chips that could power future Macs, supplanting Intel chips.

Yes, but: Apple's planned shift to use its A-series processors for future Macs has been long reported, with earlier expectations the transition could have begun as early as this year. So, Intel may get more Apple business over the next 12 months than might have been expected.

4. Amazon workers plan sickout over working conditions

Illustration: Aïda Amer/Axios

Some warehouse workers at Amazon are expected to call in sick today as a protest against what they say are inadequate protections for employees and retribution from the company against those who speak out.

Why it matters: Amazon has become a critical source of goods amid a pandemic that has shut down much of traditional retail. However, critics say the company has not done enough to prevent the spread of COVID-19 among warehouse workers.

Driving the news:

  • An online protest is planned for 9am PT, including talks from two fired workers as well as other employees and outside experts discussing warehouse conditions.
  • Amazon confirmed a significant COVID-19 outbreak at a New Jersey warehouse, with Business Insider reporting that more than 30 workers have been infected.

Meanwhile: The Wall Street Journal reported Thursday that, contrary to its testimony before Congress, Amazon used data from third-party marketplace sellers to make decisions on what products to launch itself.

Take Note

On Tap

  • You made it! It's Friday. Time to leave the week behind and head into the ... just kidding theweekneverends.
  • Remember: Facebook plans at 11am PT to announce its latest COVID-19 efforts, as well as product updates designed to appeal to a society that is sheltering-in-place.

Trading Places

  • Expedia named vice chairman Peter Kern as its new CEO, with another longtime executive, Eric Hart, becoming CFO. The company also lined up $3.2 billion in stock and debt financing to deal with a travel industry decimated by the coronavirus.

ICYMI

  • An investigation by The Markup showed that Facebook had been letting advertisers target those who it thinks show an interest in pseudoscience, although Facebook says it has now discontinued that as a targetable category.
  • Google is slashing its marketing budget and freezing marketing hiring as it looks to trim costs to contain coronavirus impact. (Axios)
  • Verizon on Friday reported a slowdown in the first quarter, as it closed stores and saw a drop in consumers buying new phones. (Wall Street Journal)
  • Google last year explored but then dropped a feature to let people tip news publishers, bloggers and musicians. (TechCrunch)
  • Nintendo revealed that hackers gained access to some 160,000 user accounts and is disabling a legacy login feature for security purposes. (The Verge)
  • Hackers have used a security flaw in Apple's built-in email app to get into iPhones, cybersecurity researchers found. (Washington Post)
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